Tariffs: Trump announces "total and comprehensive" trade deal with the UK

The announcement was expected. The US president confirmed on his Truth Social network this Thursday that he had reached a "total and complete" trade agreement on customs duties with the United Kingdom, specifying that it was "the first of many others." "The agreement with the United Kingdom is total and complete, it will cement the relationship between the United States and the United Kingdom for many years to come," he wrote. "Because of our long history and loyalty, it is a great honor to have the United Kingdom as our FIRST announcement. Many other agreements, which are in serious stages of negotiation, will follow!" he added.

On his Truth Social account, the White House tenant announced on Wednesday, May 7, a "major press conference (Thursday) morning at 10 a.m. (4 p.m. in Paris), in the Oval Office, concerning an important trade agreement with representatives of a great and highly respected country."

British Prime Minister Keir Starmer is expected to "speak later" on Thursday regarding trade negotiations between the two countries, a Downing Street spokesperson said early Thursday morning.

London has been in talks with the Americans for several weeks in the hope of reducing customs surcharges applied to the country's exports (10% on all products and 25% on steel, aluminum and automobiles).

Such an agreement is the first since the billionaire imposed massive tariffs on US imports worldwide, before largely backtracking in the face of the upheaval in the international economic order. The United States is holding similar talks with several other countries. The opening of talks with China this weekend in Switzerland is highly anticipated.

Despite the announcement of a "total and complete" agreement, several analysts and economists believe that it will only be a limited-scope arrangement. Stressing that "it takes years to negotiate comprehensive trade agreements," Deutsche Bank analysts were instead considering the announcement of "a framework" for negotiations. Jonathan Portes, an economist at King's College London, told AFP that he sees nothing more than "a damage-limitation exercise" and certainly not "a real boost to the British economy." Although, he acknowledges, "it will clearly be a relief for businesses."

Taxed at a rate of 25%, prestigious British car manufacturers such as Bentley, Aston Martin and Jaguar are at the forefront: the United States will be their largest non-EU market in 2024 (9 billion pounds, 27.4% of exports).

The British government's concessions will be closely scrutinized, particularly if it has agreed to ease its digital tax—which targets American giants and raises £800 million a year—at the very same time it is cutting social benefits to balance its budget. Labour has never denied the presence on the negotiating table of this highly symbolic tax, especially for Donald Trump, whose major American tech bosses have become close allies.

Sky News claims London has offered concessions on agriculture. "I will always act in our national interest, for workers, businesses and families," Keir Starmer promised on Thursday, two days after announcing a trade deal with India.

The United Kingdom, which has regained its trade autonomy since leaving the EU in 2020, has always been careful to spare the unpredictable American president in its comments, just as it has refrained from threatening Washington with any response to its tariffs. The country is benefiting from the fact that bilateral trade in goods remained balanced in 2024, according to official statistics, with the United Kingdom importing £57.1 billion worth of American goods and exporting £59.3 billion worth.

The trade balance, however, largely tilts in London's favor in services, with the country exporting £137 billion to the United States last year, compared to £61.2 billion in imports. But this sector remains, for now, on the margins of the trade war. While the United States is the United Kingdom's second-largest trading partner, it remains far behind the EU, which accounts for 40% of their trade.

British Chancellor of the Exchequer Rachel Reeves recently emphasized the value of the trade relationship with Brussels, stressing that it was "arguably even more important" than with the United States. London will host the presidents of the EU institutions on May 19, the first summit of this type since Brexit.

Updated at 1:45 p.m. with more details