Trump, Starmer formally confirm US-UK trade deal to avert the horrors of tariffs

The United States and the United Kingdom have formally confirmed the “breakthrough” trade deal between the two nations, slashing the major impact of US President Donald Trump’s Tariffs on the British economy. UK Prime Minister Keir Starmer said it was a “fantastic, historic day” as he announced the agreement, the first by the White House since Trump announced sweeping global tariffs last month.

While addressing the workers at the Jaguar Land Rover plant in Solihull, Starmer said that the agreement had saved jobs in the car and steel industries, which were under threat by the Trump tariffs. However, critics in the country argued that the trade deal between the two nations had failed to address many of the high tariffs that remain in place.

“The reality is that US tariffs on UK exports remain significantly higher than they were at the start of the year," John Denton, secretary general of the International Chamber of Commerce, told The Guardian. It was still unclear what would happen to industries not explicitly covered by the deal, such as pharmaceuticals.

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‘Preferential treatment,’ but is it enough?

As per the deal, the US has agreed to cut the 25 per cent tariff rate on British steel and aluminium exports to zero. The concession is being seen as a sign of relief for the British steel industry, which was on the verge of collapse. Apart from this, American tariffs on up to 100,000 British cars will also be reduced to 10 per cent, down from the 27.5 per cent rate Trump initially announced.

It is pertinent to note that the United States is the main export market for British cars. Meanwhile, Washington has also pledged to give “preferential treatment” to the UK’s pharmaceutical industry, which Trump has threatened with tariffs, although none have been set yet. “I know people along the way were urging me to walk away, to descend into a different kind of relationship. We didn’t,” the British prime minister replied to his critic.

“We did the hard yards. We stayed in the room. I’m pleased to say to the workforce here and through them to the country, how important I think this deal is," he added, concluding his remarks with the slogan, “Jobs won, not jobs done”. Peter Mandelson, the UK’s ambassador to the US, said a “technology partnership” would be negotiated “over the coming months”. US Vice President JD Vance is expected to play a key role in that regard.

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The phone call

The formal announcement of the deal was made in a choreographed phone call between Starmer and Trump, while the press gathered with the leaders on either end of the line. However, the deal is not free from criticism. Kemi Badenoch, the Conservative leader, criticised the deal, claiming that the UK has been “shafted” by Trump.

“When Labour negotiates, Britain loses. We cut our tariffs – America tripled theirs. Keir Starmer called this ‘historic.’ It’s not historic, we’ve just been shafted!” However, Andrew Griffith, the shadow trade secretary, said the reduction in tariffs would “be welcomed by exporting businesses".

A trade group representing Detroit automakers also criticised the deal, claiming it unfairly penalises American automakers who have partnered with Canada and Mexico. In a sharply worded statement, the American Automotive Policy Council (AAPC) said its members – including Ford, General Motors and Jeep-maker Stellantis – faced import tariffs of 25 per cent on cars assembled in Canada and Mexico.

“We are disappointed that the administration prioritised the UK ahead of our North American partners,” Blunt said. “Under this deal, it will now be cheaper to import a UK vehicle with very little US content than a USMCA-compliant vehicle from Mexico or Canada that is half American parts," he added.

Meanwhile, Starmer insisted that he has “not at all” been bounced into the deal but “didn’t know the exact day” it would be completed. “I wouldn’t be having my phone call with President Trump halfway through the second half of the Arsenal v PSG game had I planned it better. That’s the way it turned out, and that’s the discussion we were having late last night about how we proceeded with this deal,” he said.