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By Gabe Whisnant
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President Donald Trump and U.K. Prime Minister Keir Starmer on Thursday announced plans for a bilateral trade deal that could mark a turning point in transatlantic economic relations.
The agreement, though not yet finalized, would reduce U.S. tariffs on U.K. autos, steel, and aluminum while opening the British market to more American beef, ethanol, and agricultural exports. It would also streamline the U.K.'s customs process for goods entering from the United States.
From London, Prime Minister Starmer described the announcement as a meaningful gesture on the anniversary of Victory in Europe (VE) Day.
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"To be able to announce this great deal on the same day 80 years forward, almost at the same hour and as we were 80 years ago with the U.K. and the U.S. standing side by side, I think is incredibly important," Starmer said in a call with Trump.
Why It Matters
The deal, still being finalized, symbolically reaffirms Trump's ability to negotiate with allies even after a turbulent period of trade tensions. His sweeping tariffs on foreign goods have raised fears of global economic instability and inflation, but the proposed U.K. pact signals a potential shift in strategy.
What to Know
Speaking from the Oval Office, Trump emphasized the significance of the agreement while acknowledging that details are still being worked out.
"The final details are being written up," Trump told reporters. "In the coming weeks, we'll have it all very conclusive."
According to Commerce Secretary Howard Lutnick, the U.S. will maintain a baseline 10 percent tariff, but key changes will apply to the U.K. Trump's steep 27.5 percent tariff on U.K. autos will be lowered to 10 percent for a quota of 100,000 vehicles, and tariffs on steel and aluminum will drop from 25 percent to zero. Lutnick described the deal as tailored and limited, preserving leverage for future negotiations.
Trump warned that the 10 percent rate should not be seen as a precedent for other countries.
"That's a low number," he said, suggesting that higher rates would remain part of his broader trade agenda. Economists have cautioned that such protectionist policies could dampen global growth.
Later, at a Jaguar Land Rover plant, Starmer addressed workers, highlighting the deal's potential to safeguard thousands of jobs in the U.K. auto industry.
"This is just the start," he told the crowd. "We are hammering out further details to reduce barriers to trade with the United States and across the world."
Negotiations for a U.S.-U.K. trade pact have been underway since Britain voted to leave the European Union in 2016. Talks began in earnest under Trump's first term but slowed under President Joe Biden. They resumed when Trump returned to office in January and have gained momentum in recent weeks.
For the U.K., a key priority has been eliminating the tariffs Trump imposed on steel, aluminum, and autos as part of his 2024 tariff overhaul. The U.S. is Britain's largest car export market, accounting for over a quarter of U.K. auto exports last year.
British negotiators also sought relief for pharmaceutical exports, while the U.S. pushed for greater access to the British agricultural market. Starmer's government has resisted calls to lower food standards, maintaining bans on chlorine-washed chicken and hormone-treated beef.
Still, Trump expressed confidence that the U.K. would expand its purchases of U.S. goods.
"I think that the United Kingdom, like every other country, they want to ... go shopping in the United States of America," he said.
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Trump touted the agreement as one of several trade deals in the pipeline.
"Many other deals, which are in serious stages of negotiation, [are] to follow!" he promised.
The U.S. ran an $11.9 billion trade surplus with the U.K. in 2024, with British imports accounting for just 2% of total U.S. goods imports. Nonetheless, the U.K. remains heavily reliant on the U.S. as its top trading partner—especially in services.
"Talks with the U.S. have been ongoing," Starmer added at a defense conference in London. "And you'll hear more from me about that later today."
What People Are Saying
A UK official told Reuters that the United States and the United Kingdom have more serious work to do, "This is not a finished, classic 'bells and whistles' free trade agreement. It started off as a tactical response to President Trump's tariffs, but actually morphed into a more substantive trade deal. And it will be built on. ... We've done the Oval Office, now we've got more serious work to do."
Commerce Secretary Howard Lutnick posted on X, formerly Twitter, "What a historic day. President Trump promised to restore fair and balance in trade and we are delivering. Now, the sixth largest economy in the world is open for business to our producers. There's so much more to come."
What's Next
Though largely symbolic, the agreement offers political and economic wins for both leaders and reflects a thaw in trade tensions as both sides seek stability amid broader global uncertainty.
Reporting by the Associated Press contributed to this story.
Update: 5/8/25, 6:44 p.m. ET: This article has been updated with additional information and remarks.
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