Trump Reveals First Major Trade Deal With Britain
On Thursday, Donald Trump is expected to announce the biggest trade agreement of the new age between the United States and the United Kingdom. The deal had been struck and is going to provide a very strong foundation for the two countries to relate to each other in the years to come, he wrote on his social media platform.
Trump stated, “Because of our long-time friendship and loyalty to each other, it’s a great honor to have the United Kingdom as our first deal announcement.” He added that more deals with other countries are in progress and will be announced soon.Breaking Trade Deal
The official announcement is set to take place in the Oval Office later this afternoon. A senior British official confirmed that the U.S.-U.K. deal was completed this Thursday morning but refrained from giving any details. The official said only that the agreement is beneficial to both countries.
This will be the first trade deal to be announced since President Trump imposed heavy tariffs on almost all of America's trading partners. Those tariffs were frozen to give countries time to negotiate new trade agreements with the United States. While the details of the British-U.S. deal are still hazy, several matters have been discussed by the two sides as follows:
- Reducing duties on U.S. cars and agricultural goods sold in the U.K.
- Removing U.K. duties imposed upon American tech firms.
However, some issues and difficulties might still prevent the deal's finalization at this point. Trade lawyer Timothy C. Brightbill suggested that this could just be a preliminary agreement to launch discussions, with big-ticket items possibly including tariff levels themselves (taxes on imports), rules beyond tariffs, and digital trade, all areas that can be very complex and hard to resolve.U.S.-U.K. Trade Win
The Trump administration has sought rapid ratification of trade deals by countries. After slapping tariffs on many countries on April 2, Trump paused most of them for a period of 90 days as the U.S. bond market reacted very negatively, with the purpose of using the time to negotiate with other nations.Economic Power Shift
Meanwhile, one global tariff of 10% remains in place — including with Britain. Britain, however, may be excused from paying some higher "reciprocal" tariffs (tariffs imposed in retaliation) on account of the fact that the UK exports more from the U.S. than it does to it. The other side, of course, is that the UK now finds itself on the receiving end of a 25% tariff on foreign steel, aluminum, and cars Trump put in place — and British officials are asking the U.S. to lift those.
There has been an interest from Mr. Trump for years, in negotiating a trade deal with Britain. During his first term, his team worked on it, but they never finished the agreement. After Brexit, when the UK left the EU, British leaders viewed a trade deal with the United States as compensation for weak ties with Europe. The United Kingdom continued to push for such a deal even with President Biden, but very little progress was made.Starmer’s Surprise Win
Now as Trump has been returned to office, Prime Minister Starmer has gone all out to establish a fine working relationship with him. Starmer went to the Oval Office in February with the invitation from King Charles III asking Trump to come back to Britain for a rare second state visit.
Besides Britain, the Trump Administration is also close to finalizing agreements with India and Israel. Talks, in the meantime, continue with South Korea, Japan, Vietnam, and others. Yet Trump has lately made somewhat ambiguous claims about trade policy. Last Tuesday, he stated of trade agreements that the U.S. doesn't need them-the other countries need them. In a speech, Trump told his commerce secretary Howard Lutnick: "We don't have to sign deals. We could sign 25 right now if we wanted. But they have to sign with us."
Analysts think Trump might be aiming for smaller, quicker deals rather than the full, traditional trade deals, which take more than a year to finalize and require congressional approval. In his first term, he modified certain existing agreements such as those with South Korea and NAFTA. Yet also in his first term, he signed some "mini-deals," which encompassed fewer goods or sectors and, hence, were simpler to negotiate.
At the same time, the UK has also been negotiating with other countries. On Tuesday, Britain struck a fresh trade deal with India. That deal took nearly three years to negotiate and will lower tariffs between the two parties. British businesses will also have improved access to India’s insurance and banking industries.
All in all, although the final text of the U.S.-U.K. trade deal has yet to bemade public, it is being touted as a significant step to fortify relations between the two long-time allies. The initiative is an opportunity for both countries to help their economies, particularly as they try to put behind them recent global trade tensions.
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