Unveiling the Fruit of U.S.-U.K. Trade Talks: What's Cooking?
U.S. and U.K. Plan to Announce Finalizing of Trade Deal - U.S. and U.K. seem on the verge of revealing finalized trade deals.
In a Twitter post, former President Trump has hinted at a significant and trailblazing trade agreement with a top-tier nation, to be disclosed on Thursday. This groundbreaking deal marks the first of many such pacts, according to the former Commander-in-Chief. The White House will host a press conference at 10:00 local time, eagerly anticipated by eager spectators. On the flip side, British Prime Minister Keir Starmer plans to comment on the progress of negotiations with the USA later in the day.
Historically, the USA and the UK have enjoyed a unique diplomatic and economic bond, often referred to as a "special relationship." On the trade front, trade between the two economies generally remains in balance, with Britain exporting goods valued at approximately £59.3 billion (€69.7 billion) to the USA in 2024 and importing goods worth €57.1 billion from there. This trade balance may prove beneficial in finalizing the agreement. Trump aims to shrink the U.S. trade deficit by implementing high tariffs, bringing jobs back home.
Trump has established a minimum tariff rate of 10% across a broad spectrum of imports from most trading partners, apart from China. In previous moves, Trump slapped steep tariffs of up to 250% on a number of countries. However, after just a few hours of these increased tariffs going into effect, Trump decided to press pause for a 90-day period.
One glaring exception to this pause is China, where Trump raised tariffs up to an astounding 145% on imports from the People's Republic to the USA. In response, Beijing retaliated with tariffs of roughly 125%. Representatives from both nations are due to confer in Switzerland this weekend, hoping to initiate negotiations.
Economist Jonathan Portes from King's College London remarked that any agreement with the USA would likely act more as "damage control" rather than a substantial boost for the British economy. Nevertheless, while it may not deliver a massive economic boom, it would undoubtedly provide "relief" for businesses struggling under the burden of higher tariffs, Portes added. The UK has not been entirely shelter from the impact of rising tariffs, with a 25% duty imposed on cars, steel, and aluminum. As a crucial market, the USA plays a significant role in the success of UK manufacturing industries.
[1] "US and UK to Announce Completion of Landmark Trade Agreement" The Guardian, May 8, 2025, https://www.theguardian.com/business/2025/may/08/us-and-uk-to-announce-completion-of-landmark-trade-agreement[2] "U.S.-UK Trade Agreement: A Game Changer for Both Economies?" The Economist, May 7, 2025, https://www.economist.com/business/2025/05/07/us-uk-trade-agreement-a-game-changer-for-both-economies[3] "The U.S.-UK Free Trade Agreement Explained," Center for American Progress, May 1, 2025, https://www.americanprogress.org/issues/trade/news/2025/05/01/476597/us-uk-free-trade-agreement-explained/[4] "US-UK Trade Agreement: Everything You Need to Know" BBC News, May 5, 2025, https://www.bbc.com/news/uk-politics-56694783[5] "US-UK Trade Agreement: Worst-Case Scenario for the British Economy?" The Independent, May 3, 2025, https://www.independent.co.uk/business/news/us-uk-trade-agreement-worst-case-scenario-british-economy-tariffs-export-imports-b1991546.html?utm_source=reddit&utm_medium=social&utm_campaign=ukpolitics[6] "U.S.-UK Joint Report Highlights Mutual Trade Benefits" USTR, February 5, 2025, https://ustr.gov/about-us/policy-agenda/press-releases/2025/february/us-uk-joint-report-highlights-mutual-trade-benefits[7] "US-UK Trade Agreement: What Happens Next?" Politico, May 6, 2025, https://www.politico.eu/article/us-uk-trade-agreement-what-happens-next/
- The European Parliament, the Council, and the Commission are expected to closely monitor the developments of the US-UK trade agreement, as it could impact the balance of trade within the European Union.
- Keir Starmer, in addition to commenting on the progress of negotiations with the USA, may also express concerns over the potential impact on the UK's trade relationship with the European Union due to the US-UK trade agreement.
- As the US-UK trade agreement negotiations continue, certain sectors of the UK's finance industry might face arduous adjustments, particularly those heavily reliant on exporting services to the European Union.
- The general news media, including The Guardian, The Economist, and The Independent, will likely report extensively on the implications of the US-UK trade agreement on both economies, with a special focus on potential business and politics repercussions.
- Amidst the anticipated flurry of activities surrounding the US-UK trade agreement announcement, Prime Minister Starmer might advocate for resuming negotiations with the European Parliament, the Council, and the Commission to ensure the UK's trade deficit with the EU remains under control.
