Pressmediaofindia
Related Articles
09-05-2025
LONDON: The United States and Britain will announce a deal to lower tariffs on some goods on Thursday, the first such agreement since US President Donald Trump sparked a global trade war with universal levies.
In posts on Truth Social, Trump said he would hold an Oval Office news conference at 10 am on Thursday about a “full and comprehensive” trade agreement with Britain.
Prime Minister Keir Starmer, who describes the US as an indispensable ally, is due to provide an update later on Thursday. The deal is likely to be narrow, with Britain securing lower tariffs on cars and steel, the two sectors hardest hit.
“Because of our long time history and allegiance together, it is a great honor to have the United Kingdom as our FIRST announcement,” Trump said. “Many other deals, which are in serious stages of negotiation, to follow!”
The United States has been under pressure from investors to strike deals to de-escalate its tariff war after Trump’s often chaotic policymaking upended global trade with friends and foe alike, threatening to stoke inflation and start a recession.
Top US officials have engaged in a flurry of meetings with trading partners since the president on April 2 imposed a 10% tariff on most countries, along with higher tariff rates for many trading partners that were then suspended for 90 days.
The US has also imposed 25% tariffs on autos, steel and aluminium, 25% tariffs on Canada and Mexico, and 145% tariffs on China. US and Chinese officials are due to hold talks in Switzerland on Saturday.
Starmer, who has struggled in government since he was elected last July with his centre-left Labour Party, has struck up a warm relationship with Trump and his government will celebrate becoming the first country to agree a deal.
ritain’s car industry exports luxury brands to the US and the 25% tariffs had hit the industry hard. Jaguar Land Rover paused shipments of its cars to the US for a month while it considered how to mitigate the impact. Shares in Aston Martin, opens new tab, which said it would split the cost of tariffs with its customers and limit shipments to the US, rose 8% on Thursday.
A British official had said that the scope of any agreement was likely to be narrow, with Britain expected to secure lower tariffs on a tranche of steel and autos exports.
In return, Britain is likely to agree to lower its own tariffs on US cars and cut a digital sales tax that affects US tech giants. It had refused to lower its food standards, which are closely aligned with the European Union, however Britain’s farming trade union has said that some US producers do meet British standards by not using growth hormones or antimicrobial washes, and could be given greater market access. Starmer’s government has been walking a tightrope on trade, seeking as an independent country after Brexit to build new ties with the US, China and the EU without moving so far towards one bloc that it angers the others.
There are also political threats on the domestic front.
Polling shows the government remains deeply unpopular after it cut support for pensioner’s energy bills and hiked taxes on households and companies, making any move to cut taxes on multi-national tech companies a big risk.
Britain’s digital service tax, levied at 2% of UK revenue for online marketplaces, search engines and social media platforms, was introduced in 2020 in response to an outcry about tax avoidance by big tech.
It was expected to raise about 800 million pounds ($1.1 billion) this year, with more than 90% coming from five big tech firms, according to a 2023 report by lawmakers.
The status of the 10% “baseline” tariff imposed by Trump on most countries including Britain, or any threatened tariffs on the pharmaceutical industry, was unclear. (Int’l News Desk)
