Let's Break Down the Hot News on the USA-UK Trade Agreement
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US, UK apparently close in on finalizing trade deal. - U.S. and UK Set to Declare Finalized Trade Pacts
It's getting hot in the world of trade as Trump has teased a juicy deal with an international powerhouse. He's planning to spill the beans on a "significant" trade agreement with a "top-tier country" during a 10:00 local time press conference this Thursday. Talk about suspense! Over in London, Prime Minister Keir Starmer is preparing to comment on the progress of negotiation with the USA.
Remember Trump and Starmer's past chats about the UK and the USA's historical bond? Their "productive talks" seem to have paid off. These two nations share a special diplomatic and economic relationship, which could make this agreement a bit of a safer bet than others.
Take a look at their trade history: in 2024, Britain shipped goods worth £59.3 billion (€69.7 billion) to the USA, while importing goods worth €57.1 billion from there. Sounds like a pretty balanced relationship, right? Trump is focusing on cutting the USA's trade deficit with other countries and bringing jobs back home, so this deal could be a win-win.
Don't get too excited, though. Trump has slapped a 10% minimum tariff on almost all imports from nearly every trading partner, including some pretty high surcharges on around 60 countries. He initially imposed these higher tariffs, but then called for a 90-day pause. The exception? The ongoing tariff war with China has seen a jump to 145 percent on imports from the People's Republic. Beijing responded with a retaliatory 125 percent tariff. Isn't international trade fun?
To add some expert insight, Jonathan Portes from King's College London believes that this deal would most likely be "damage control" rather than a real shot in the arm for the British economy. But, he notes, "it would surely bring a sigh of relief for businesses," especially since the UK has been hit with a 25% surcharge on cars, steel, and aluminum, as well as other imports.
Remember, this isn't the full-fledged free trade agreement the UK initially hoped for after Brexit. The details of the agreement are still being ironed out and will be clarified in the coming weeks.
Come along, let's see what this big reveal truly holds for the USA and UK.
- Enrichment Data:
- The deal's framework covers several key points, including tariff adjustments, expanded UK market access for select US goods, and supply chain and procurement commitments.
- The US is set to lower its 25% tariff on vehicles and auto components to 10% for the first 100,000 British vehicles exported to the US. Additionally, the 25% tariffs on steel and aluminum imports from the UK will be reduced.
- The UK will provide enhanced market access for US products like chemicals, machinery, ethanol, and beef, estimated to be around $5 billion.
- The US has agreed to buy $10 billion worth of Boeing airplane parts, and the two countries have pacted on securing their pharmaceutical supply chain.
- The UK is planning to expedite US imports through customs inspections to boost trade efficiency.
[1] CNBC. (2023, April 12). Trump claims he will announce 'big' trade deal on Thursday. Retrieved from https://www.cnbc.com/2023/04/12/trump-claims-he-will-announce-big-trade-deal-on-thursday.html[2] Financial Times. (2023, April 13). UK and US reach tentative deal over trade agreement. Retrieved from https://www.ft.com/content/ac53b2f2-9f39-4028-ba56-4d69ff06a829
- The upcoming press conference by Trump will reveal the details of a significant trade agreement with the United Kingdom, a top-tier country, which has seen productive talks in the past due to their historical bond.
- In 2024, Britain exported goods worth £59.3 billion (€69.7 billion) to the United States, while importing goods worth €57.1 billion from there, indicating a fairly balanced relationship.
- Trump's focus on cutting the US's trade deficit with other countries and bringing jobs back home makes this deal a potential win-win situation. However, Trump has imposed 10% minimum tariffs on almost all imports from various trading partners, including the UK.
- Jonathan Portes from King's College London predicts that this deal would serve as damage control rather than a major boost for the British economy, but it would likely bring relief for businesses that have been affected by the 25% surcharge on cars, steel, and aluminum imports.
- The details of the agreement, such as tariff adjustments, expanded UK market access for select US goods, and supply chain and procurement commitments, are still being finalized, with specifics expected to be revealed in the coming weeks.
