CliffNotes
- UK-US trade deal to be announced later today
- Deal expected to include reduction on tariffs
- Experts believe the deal will be a short term pause on tariffs not long term solution
UK-US trade deal to be announced today
What Happened
A UK-US trade deal is expected to be announced today, which will see tariffs reduced.
Currently, most goods imported to the US from the UK face a 10% tariff with higher rates on steel, aluminium, and cars. The UK also charges tariffs on some US goods.
The UK has been seeking a deal to lower the tariffs that US President Donald Trump introduced on almost every country last month – what the president dubbed ‘Liberation Day.’
Last night Trump posted on social media: “Big News Conference tomorrow morning at 10:00 A.M., The Oval Office, concerning a MAJOR TRADE DEAL WITH REPRESENTATIVES OF A BIG, AND HIGHLY RESPECTED, COUNTRY. THE FIRST OF MANY!!!”
Perspective
Though Trump has labelled it a “trade deal” it’s much more likely to be limited – and more of a specific deal to reduce tariffs on specific things.
Britain will want a reduction of tariffs on British steel and cars, whilst the US will want something on pharmaceuticals and technology.
A former member of the Bank of England’s Monetary Policy Committee says people shouldn’t expect too much today – as Donald Trump talked of a “trade deal” instead of a “trade agreement”.
“There’s a big difference between a trade deal and a trade agreement,” Jonathan Haskel tells BBC Radio 4’s Today programme.
“Trade deals are limited and short-term and partial, just covering a few items. Trade agreements are broad-based and long-term.”
He says the deal could just be a commitment to a “short-term change of policy” – for example, a pause in certain tariffs.
What Next
We won’t know too much until the official announcement.
Downing Street has confirmed the prime minister will make an announcement about the US-UK deal on tariffs “later today.”
A No 10 spokesperson says the US is an “indispensable ally for both our economic and national security” and “talks on a deal between our countries have been continuing at pace”.
“The prime minister will update later today,” they add.
Reaction From The Media
- The Guardian says Donald Trump is expected to announce the “framework of a trade agreement” with the UK, according to two people familiar with the matter, after teasing a major announcement with a “big and highly respected, country.”
- Sky’s deputy political editor Sam Coates says he understands a “heads of terms” agreement, essentially a preliminary arrangement, has been agreed which is a “substantive” step towards a full deal.
- CNBC says Britain, which runs a trade deficit with the U.S., was spared the higher “reciprocal” tariffs when Trump announced his “Liberation Day” duties, although it was still hit with the baseline 10% levy.
- The Spectator says the announcement will come at 3 p.m. UK time and could be worth billions in what would be an “unarguable win for Rachel Reeves and Keir Starmer.”