Trump Unveils Landmark US-UK Trade Pact With Reduced Barriers, 10% Tariff On Cars

The deal lowers tariffs on UK automobiles and opens up the British market for US beef, ethanol, and industrial goods, but retains a 10% baseline tariff as Washington signals tougher trade posture.

Washington, May 8, 2025 —
US President Donald Trump on Thursday announced a new US-UK trade agreement, the first formal deal under his renewed administration’s trade doctrine. The agreement reduces non-tariff barriers on a range of US products while maintaining a 10% universal tariff on car imports — a signature Trump policy aimed at ensuring “reciprocity and fairness.”

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At a press conference in the Oval Office, Trump described the deal as “historic”, praising UK Prime Minister Keir Starmer for being a “strong ally” and “serious negotiator.” He later posted on Truth Social, calling the pact “the first historic trade deal since Liberation Day.”

Key Details of the Trade Deal

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• UK car tariffs reduced from 27.5% to 10%, capped at 100,000 vehicles per year.
• US exports of beef, ethanol, chemicals, and machinery to benefit from reduced British non-tariff barriers.
• Steel and aluminum tariffs eliminated on UK exports to the US.
• Expedited customs processing for US goods entering the UK market.
• Commerce Secretary Howard Lutnick confirmed that the 10% car tariff will remain the baseline for all nations, including the UK.

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The White House also released a visual chart showing projected tariff revenue increases and expanded access for American exporters, particularly in agriculture. Trump forecasted $6 billion in revenue from UK car imports and $5 billion in new export opportunities for US farmers and ranchers.

Economic Impact

Markets responded positively:

• Dow Jones rose 235 points (+0.57%)
• S&P 500 climbed 0.54%
• Nasdaq Composite increased 0.7%
• US dollar index rose 0.5%
• British pound gained slightly against the dollar

Trump emphasized that the deal underscores a shift in global trade principles, one where “respect, reciprocity, and serious negotiation” are prerequisites for market access to the US.

Industry Response

UK exported over £370 million ($492 million) worth of steel to the US in 2024, which will now benefit from zero tariffs. The automotive sector is expected to see notable gains under the quota system, although analysts warn of potential pushback from US carmakers.

In agriculture, US ranchers are expected to gain substantial foothold in the UK market, with beef and ethanol shipments set to rise dramatically.

Looking Ahead

President Trump signaled that this is only the beginning, saying,

“America is open for business to those who respect our values and bring real proposals to the table.”

He promised more bilateral trade agreements with like-minded nations under his “America First” 2.0 economic vision.

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Trump UK trade deal, US-UK agreement, Donald Trump tariffs, US car tariff, beef exports, ethanol exports, UK vehicle quota, trade policy, agriculture exports, 2025 trade news