On May 8, 2025, the United States and the United Kingdom announced a new trade deal, a significant step in reshaping their economic ties. This agreement, struck on the 80th anniversary of World War II’s Victory Day, aims to boost trade while addressing America’s trade deficit. The UK government calls it a job-saving pact that strengthens industry.
The deal sets a 10% US tariff on most UK goods, down from potentially higher rates. According to The White House (https://www.whitehouse.gov/), while the US-UK trade was valued at $148 billion in 2024, this trade deal creates $5 billion in export opportunities for US farmers, ranchers, and producers, particularly for ethanol and agricultural products like beef. The UK secures reduced US tariffs on cars, dropping from 27.5% to 10% for the first 100,000 vehicles, as well as a new trading union for steel and aluminum.
For the US, the deal boosts agriculture and generates $6 billion in tariff revenue, says The White House. However, the 10% tariff may raise consumer costs. The UK gains relief for its automotive and steel sectors, with Jaguar Land Rover saving millions. Yet, pharmaceuticals and films remain excluded. The economic boost may be small, with the UK GDP growth estimated at 1 – 1.9% for 2025 through 2026.
The deal coincides with tense US-China trade talks. The White House notes upcoming discussions in Switzerland, where US tariffs on Chinese goods hit 145%, and China’s retaliatory tariffs reach 125%. Unlike the UK deal, progress with China remains uncertain, with no confirmed concessions.
This pact marks a pragmatic start, but unresolved issues linger. Can the US and UK build on this, or will global trade tensions overshadow their gains? The world is watching.
Follow us on all social media platforms @dailyquery for news and analyses around the globe.
