- The US and UK sign a limited trade agreement, retaining 10% tariffs on British exports.
- The deal lowers US tariffs on British car exports and other goods.
- The digital services tax issue remains unresolved, potentially complicating future talks.
The US-UK trade deal announced by President Trump and Prime Minister Keir Starmer marks a notable but limited step in resolving tariff disputes, particularly for British car exports.
Despite both leaders touting the deal as a breakthrough, unresolved issues linger. The UK’s digital services tax remains a contentious point, with Washington seeking changes that London has not yet committed to.
US-UK Trade Deal: A Boost for Car Exports, But Key Issues Remain
The limited US-UK trade agreement is being framed as a victory by both Trump and Starmer, with both leaders emphasizing job creation and market access. Trump praised the deal as a crucial step in his ongoing efforts to restructure US trade relationships globally. Starmer highlighted the historical significance of the announcement, noting that it coincided with the anniversary of World War Two’s end in Europe.
However, the agreement leaves in place a 10% tariff on British exports, a notable exception that may temper some of the positive rhetoric. While British carmakers stand to benefit from reduced US duties, other industries may still face significant barriers, particularly given Trump’s aggressive tariff policies on sectors such as pharmaceuticals and semiconductors.
Another critical issue is the UK’s digital services tax, which targets major US tech firms and remains a sore point for Washington. Although not addressed in this agreement, US officials have signaled that they will revisit the issue, raising the possibility of further negotiations or potential retaliatory measures.
Meanwhile, Trump continues to position these trade deals as part of a broader effort to recalibrate the global trade system. With his trade representatives heading to Switzerland for talks with China, the outcome of those discussions could further shape US policy, impacting not just the UK but other major trading partners as well.
While the limited US-UK trade deal is being lauded as a breakthrough, unresolved issues like the digital services tax signal that tougher negotiations may lie ahead.
“This is going to boost trade between and across our countries, it’s going to not only protect jobs, but create jobs, opening market access.” — Keir Starmer
