The trade deal between the U.S. and the United Kingdom was announced on May 8, 2025. This deal maintains the 10% general tariff imposed by the U.S. on imports, while the UK has agreed to reduce its tariffs on U.S. products. Under the agreement, the U.S. will remove the 25% additional tariffs on UK imports such as automobiles, steel, and aluminum.
The UK has reduced its average tariff rate on U.S. goods from 5.1% to 1.8%. This deal will provide U.S. companies with easier access to the UK market. Additionally, the digital services tax on U.S. tech companies will be reduced, though a full agreement on this matter has not yet been reached.
Economically, U.S. stock markets rose following the announcement, with the S&P 500 index increasing by 1.3%. The Bank of England also lowered interest rates to 4.25%. Following the deal, Trump stated that he plans to make similar agreements with countries like China, India, and the European Union.
UK Prime Minister Keir Starmer emphasized that the agreement would strengthen the special relationship between the two countries and boost economic cooperation. This development is seen as a significant turning point for global trade and U.S. foreign trade policies.