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Starmer says UK-US trade deal a 'fantastic, historic day'

Starmer’s UK-US Trade Deal: A Win for UK Retailers and Traders

Prime minister Keir Starmer speaks on the phone to US president Donald Trump at a car factory in the West Midlands on May 08, 2025 in Solihull, England.

Photo by Alberto Pezzali - WPA Pool/Getty Images

Prime minister Keir Starmer said Thursday it was a "really fantastic, historic day," after he agreed a US-UK trade deal with president Donald Trump.

The agreement lifts tariffs on UK steel and aluminium products and slashes levies on British car exports from 27.5 per cent to 10 per cent, Downing Street said.


"This is a really fantastic, historic day," Starmer said, appearing by video link to join Trump in the White House during simultaneous news conferences in Britain and Washington.

"It's going to not only protect jobs, but create jobs, opening market access," Starmer added, paying "tribute" to both negotiating teams.

The UK government said in a statement that the cut in car tariffs would save Jaguar Land Rover "hundreds of millions" of pounds a year.

The reduction will apply to a quota of 100,000 UK cars, almost the total Britain exported last year, the government added.

"That is a huge and important reduction," Starmer said during a visit to a Jaguar Land Rover factory in the central Midlands area of England.

The deal also includes new reciprocal market access on beef, with UK farmers given a tariff free quota for 13,000 metric tonnes, the British government said.

It added that the agreement does not dilute British food standards. The UK government has repeatedly said it would not allow chlorinated US chicken into the country.

The deal also does not see the UK government make any changes to the digital services tax paid by US tech giants.

Britain is still subject to 10 per cent tariffs on most goods as part of the so-called "reciprocal" basic rate imposed on countries by Trump in early April.

There are some exemptions, such as on pharmaceuticals,

No. 10 said its negotiators would continue to work to see the remaining tariffs lifted and ensure it is exempt from any future levies on pharmaceuticals.

The UK government said Britain would get "preferential treatment" in any further tariffs announced by Trump.

"This is just the start," Starmer told reporters.

"We're more ambitious for what the UK and the US can do together," he added.

Britain and the US have been negotiating the deal for several weeks.

Starmer said he learnt that Trump had given it his approval when he called him on Wednesday night as he watched Arsenal's loss to Paris Saint-Germain in the Champions League.

The deal, which follows a landmark free trade agreement with India on Tuesday, was largely welcomed by British businesses and industries such as auto manufacturing and steel production. They said it would provide some relief to companies impacted by the tariffs without giving too much away in return.

The future of steel in Britain has been in doubt, with the government stepping in to keep blast furnaces running, while car manufacturers have also spoken up about the threats of tariffs to their business plans.

The Society of Motor Manufacturers and Traders said the deal was "great news for industry" and would provide "much needed relief".

The National Farmers Union largely welcomed it, thanking Starmer's government for not lowering agricultural standards in a deal that provides reciprocal market access for beef.

What is in the new US-UK trade deal?

The "breakthrough" US-UK trade deal is the first agreement to be unveiled since Trump slapped steep tariffs on allies and adversaries alike on 2 April.

Here is what we know about the new trade deal for goods:

'Increased market access'

The 10 percent "baseline" tariff imposed on most US trading partners in early April remains in effect for most goods, with the largest reductions in trade barriers coming on items recently subjected to new sector-specific tariffs of 25 percent.

The new deal includes "billions of dollars of increased market access for American exports," Trump said during the Oval Office announcement, which was attended by Peter Mandelson, the British ambassador to the United States.

The agreement will bring in an additional $6 billion to the Treasury Department's coffers from new tariff revenue, the White House said in a statement.

The deal is sure to be closely scrutinised ahead of the Trump administration's self-imposed July deadline for talks, with some nations facing a far higher rate of tariffs if no deal is struck.

"This was the lowest hanging fruit available to the administration," Josh Lipsky, chair of international economics at the Atlantic Council, told AFP.

"It sends the message that negotiations are going to be complicated going forward, because the UK situation is unique in many ways and will be hard to replicate for other countries," he added.

Boost for British auto sector

The British automotive industry is a clear winner.

The sector, which employs a quarter of a million people in the UK, was facing 27.5 per cent tariffs before this announcement, according to a statement from prime minister Keir Starmer's office.

Under the deal announced Thursday, car export tariffs will be slashed to 10 per cent on the first 100,000 cars shipped from Britain to the US, with any additional exports taxed at 25 per cent.

The 100,000 figure is "almost the total" the UK exported to the US last year, the British prime minister's office said.

Steel and aluminum

Another key development in the deal is the agreement from the US to eliminate its recently-imposed levies of 25 per cent on UK-made steel and aluminum, according to the British government.

The new agreement "furthers shared national security interests, creating a new union for steel and aluminum," the US Commerce Department said, without confirming the zero per cent tariff rate.

The White House did not immediately respond to a request for comment on the elimination of all steel and aluminum tariffs.

Agriculture

Trump said the new agreement would create a new $5 billion "opportunity" for US farmers, ranchers and producers, including $700 million in ethanol exports, and $250 million in other agricultural exports, including beef.

Agricultural exports from the US have long been a key sticking point in trade negotiations, with British farmers - and consumers - voicing concerns about chlorine-washed chicken, and hormone treated beef from the US.

The two countries have agreed to "new reciprocal market access for beef - with UK farmers given a tariff free quote for 13,000 metric tonnes," according to the British prime minister's office.

The agreement will "exponentially increase our beef exports," US Agriculture Secretary Brooke Rollins told reporters.

Despite the new and expanded US access to British markets, "there will be no weakening of UK food standards," Downing Street said.

What is excluded?

Trump's threats to impose pharmaceutical tariffs have not been covered by this arrangement, other than a commitment from the White House to create "a secure supply chain for pharmaceutical products."

"I think that it tells people that in terms of negotiation, what's on the table is what is actually implemented, not what's being threatened," said Lipsky from the Atlantic Council.

Another key area not covered by the agreement is digital services, with the White House keen to tackle a recent digital services tax imposed by Britain on US tech giants like Google and Meta.

"Instead the two nations have agreed to work on a digital trade deal that will strip back paperwork for British firms trying to export to the US," Downing Street said.

"The 'full and comprehensive' trade deal between the US and the UK announced in a rush today by president Donald Trump and PM Keir Starmer is no such thing," Capital Economics chief North America economist Paul Ashworth wrote in a note to clients.

"As Trump admitted in his press conference, the 'final details' still need to be 'written up in the coming weeks.'"