U.S. Announces Trade Deal With U.K

Source Credit : CNBC

On Thursday, the United Kingdom and the United States reached a significant trade agreement. However, it seems that this deal is not entirely free of tariffs. This agreement marks the first trade deal made by the United States since President Donald Trump introduced his reciprocal tariffs on countries worldwide last month.

The United Kingdom holds a unique position among a select few countries where the U.S. enjoys a trade surplus in goods, indicating that the U.S. exports more to the U.K. than it imports. This advantageous position has placed the country at the forefront of negotiations with the Trump administration to broker a trade agreement.

According to the agreement, the United Kingdom is permitted to export up to 100,000 vehicles annually at a 10% tariff rate. Any vehicles exceeding this limit will be subject to a 25% duty. Additionally, British steelmakers and the aluminum industry will now be able to export their products tariff-free, a significant reduction from the 25% rate imposed by the United States in February.

Nevertheless, all other goods imported to the United States from the United Kingdom will continue to be subject to a 10% baseline tariff. President Trump has stated that this tariff is the lowest country-specific tariff that will be imposed on trading partners.

Trump has also indicated that the agreement is expected to be uncommon, given the balanced trading relationship and strong political connections between the two countries. This suggests that no country is likely to be exempt from tariffs during his second term in office.

Asked if the 10% baseline tariff is a template for future trade deals, Trump said: “That’s a low number.”

“They made a good deal,” he added. “Some will be much higher because they have massive trade surpluses.”