The United States and United Kingdom have signed a historic trade agreement that will create billions in new export opportunities for American farmers while maintaining tariffs on British goods.
At a Glance
- New U.S.-U.K. trade deal maintains 10% tariff on British imports while creating $5 billion in new export opportunities for American producers
- U.S. agricultural sector gains unprecedented access to U.K. markets for beef, ethanol, fruits, vegetables, and other products
- Agreement includes U.K. commitment to purchase $10 billion worth of Boeing aircraft with tariff-free Rolls-Royce engines
- Deal aims to reduce U.S. trade deficit, potentially adding a full percentage point to GDP
- Commerce Secretary Lutnick indicates this is the first of many upcoming trade agreements
Historic Deal Creates New Opportunities for American Exporters
The Department of Commerce and the U.S. Trade Representative have announced a groundbreaking trade agreement with the United Kingdom that maintains protective tariffs while opening new markets for American goods. The deal keeps in place the 10% reciprocal tariff rate on British imports that was established on Liberation Day but creates significant new export opportunities for U.S. producers. According to the Commerce Department, the agreement removes longstanding U.K. market barriers, potentially generating $5 billion in new U.S. exports.
American farmers stand to benefit substantially from the agreement, which provides unprecedented access to British markets for U.S. ethanol, beef, fruits, vegetables, animal feed, tobacco, shellfish, chemicals, and textiles. The deal establishes quotas for British automobile exports, limiting U.K. car manufacturers to 100,000 vehicles per year at the 10% tariff rate, with a higher 25% rate applying to any vehicles beyond that threshold.
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Boeing Sales and National Security Benefits
A key component of the agreement is a provision allowing British-made Rolls-Royce engines to enter the United States tariff-free. In return, the United Kingdom plans to purchase approximately $10 billion worth of Boeing jets, creating a significant boost for the American aerospace industry. The Commerce Department emphasized that the deal supports shared national security interests by forming a new union for steel and aluminum and securing supply chains for pharmaceutical products.
“This deal marks a new era in our relationship with the United Kingdom, our great ally,” said Secretary Lutnick. “And more importantly this deal opens up an enormous multibillion dollar export opportunity for hardworking Americans. While groundbreaking, this deal is the first of many as President Trump continues to deliver on his promises to the American people.”
According to Commerce Secretary Howard Lutnick, tariff revenues have already increased by 45% year over year since the administration took office, with a current run rate of $125 billion. This new deal is expected to further boost those numbers while reducing America’s reliance on Chinese supply chains.
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Economic Impact and Future Trade Plans
The administration views the U.K. deal as part of a broader strategy to reduce America’s trade deficit. Secretary Lutnick stated that cutting the trade deficit by 25% could add a full percentage point to U.S. GDP growth. This approach aligns with the administration’s focus on targeting trade agreements with larger countries that have substantial economic leverage, rather than pursuing deals with smaller nations that have limited impact on the American economy.
The U.S.-U.K. trade agreement comes amid a reported surge in domestic investment, with companies like Apple, Nvidia, Hyundai, and Merck committing billions of dollars to American operations. Secretary Lutnick characterized this influx as part of a trillion-dollar wave of investment in the United States. He also indicated that additional trade agreements are in the pipeline, with more announcements expected in the coming weeks as the administration continues its economic agenda.
