U.S., Britain strike first major trade deal of Trump tariff era
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British Prime Minister Keir Starmer and President Trump at the White House in February 2025. Photo: Carl Court - Pool/Getty Images
The U.S. and Britain agreed on the framework for a sweeping new trade deal, the first major pact since President Trump began a campaign of global tariffs.
Why it matters: It may serve as a model for the dozens of other countries negotiating with his administration.
Driving the news: Trump announced the deal in the Oval Office Thursday morning, with British Prime Minister Keir Starmer joining by speakerphone.
- The newly imposed 10% U.S. baseline tariff on imports from Britain will remain, while average British tariffs on imports from the U.S. will fall to 1.8% from 5.1%.
Catch up quick: The U.S. had a trade surplus with the U.K. of nearly $12 billion in 2024. It's one of the few major countries with which the U.S. doesn't run a deficit.
- The U.K.'s key exports to the U.S. include cars and pharmaceuticals, while it imports large quantities of crude oil and gas.
Between the lines: After Trump announced his sweeping global tariffs in early April, Starmer took a far less combative stance than some world leaders.
- Starmer reportedly said he believed it was not sensible to react by jumping into a trade war with the U.S.
- Trump spared Britain the worst of the tariffs imposed on other countries at the time, applying only a 10% baseline levy.
By the numbers: U.S. and European stocks mostly rose Thursday morning on optimism that the new deal opened a path to more down the road.
- The dollar — under pressure this year over fears about the U.S. as a safe haven for investment — strengthened broadly.
- "The timing of Trump's trade announcement adds to the positive momentum ahead of U.S.-China negotiations set for this weekend in Switzerland, which have already bolstered market sentiment," George Vessey, lead foreign exchange and macro strategist at Convera, wrote in a note.
What to watch: All eyes will turn now to those China talks. Treasury Secretary Scott Bessent called them an opportunity to de-escalate the tensions that led to a 145% tariff and an effective trade embargo.
- Meanwhile, with the U.K. deal done and China starting, there are still at least 16 major trading partners with whom to do deals.
Go deeper... No turning back: America's forever trade wars
Editor's note: This story has been updated with details of the trade deal.
