Trump, Starmer Reach Tentative US/UK Trade Agreement

President Donald Trump announced Thursday that the United States and the United Kingdom have reached what he described as a significant trade agreement, suggesting a potential easing of steep tariffs that have strained global commerce.

The deal, which emerged from a late-night phone conversation Wednesday with UK Prime Minister Keir Starmer, remains provisional. Starmer, speaking during a call into the Oval Office Thursday, emphasized that certain elements still need to be finalized. Nevertheless, the agreement could serve as a model for future negotiations with other nations seeking relief from broad U.S. tariffs.

“The agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come,” Trump posted on Truth Social Thursday morning. “Because of our long time history and allegiance together, it is a great honor to have the United Kingdom as our FIRST announcement. Many other deals, which are in serious stages of negotiation, to follow!”

“This should be a very big and exciting day for the United States of America and the United Kingdom,” he added in a separate post.

Despite Trump’s enthusiastic characterization, the scope of the agreement is relatively limited for now. According to U.S. and UK officials who briefed CNN, the deal does not lift the 10% blanket tariff Trump imposed on almost all imports during his “Liberation Day” declaration on April 2. Instead, the agreement centers on selective reductions and future intentions.

In the Oval Office Thursday, Trump referred to the arrangement as a “huge deal,” though specific terms were sparse. Commerce Secretary Howard Lutnick elaborated that the UK will ease trade restrictions on several American agricultural and industrial products, including ethanol, beef, and machinery.

Lutnick also announced that the UK would now be allowed to export up to 100,000 vehicles annually to the U.S. under a reduced 10% tariff, down from the previous 25% levy on foreign automobiles. Additionally, the U.S. and UK will impose coordinated 25% tariffs on foreign steel and aluminum, effectively creating a free trade zone for those metals between the two countries. Pharmaceutical products will be exempt from tariffs entirely.

Both governments acknowledged that parts of the deal are still being negotiated. British Ambassador Peter Mandelson and Prime Minister Starmer reiterated that message Thursday, even as they praised the framework as a stepping stone toward a more expansive agreement.

Starmer has prioritized forging stronger trade ties with the U.S. and has consistently highlighted this effort during closed-door talks with Trump, including during his February visit to the White House. UK negotiators have in recent weeks adopted a more focused strategy, pushing the U.S. administration for specific concessions on market access and automotive and steel tariff relief.

The announcement sparked a mostly positive reaction from financial markets. The Dow Jones Industrial Average climbed nearly 400 points (0.9%), the S\&P 500 rose 0.8%, and the Nasdaq gained 1.1%. However, the FTSE 100 slipped 0.2%, reacting to both the trade news and a Bank of England rate cut earlier in the day.