[LONDON] Prime Minister Keir Starmer reached an agreement with US President Donald Trump to implement trading terms disclosed last month to slash US tariffs on key British exports and raise UK quotas on certain American agricultural products.
Trump and Starmer on Monday (Jun 16) presented a document signed at the Group of Seven meeting in Kananaskis, Canada, agreeing to move forward on measures easing trade of cars, agricultural and aerospace products – but falling short of an immediate cut to steel tariffs, a key British ask.
“The UK is very well protected,” Trump told reporters. “Because I like them, that’s why, that’s their ultimate protection.”
Trump signed an executive order on Monday that also exempts the UK’s civil aerospace aircraft sector from Trump’s baseline 10 per cent country-by-country tariffs, a significant tariff relief measure for a sector closely intertwined with the US industry. UK auto exports will see US tariffs slashed to 10 per cent from 27.5 per cent later in June on an annual quota of 100,000 vehicles.
On steel, the US agreed to exempt the UK up to a certain quota that has not yet been set. Commerce Secretary Howard Lutnick will determine the quota of products that can enter the US without being subject to the 25 per cent tariffs, a White House official said.
The UK in turn committed to “working to meet American requirements on the security of the supply chains of steel and aluminium” including on the “nature of ownership” of relevant steel plants, according to the document. That confirms reports of US concerns about the foreign ownership of British Steel, which runs Britain’s last remaining blast furnaces that make steel from raw materials. While the UK government has taken effective control of the manufacturer, its legal owner remains China’s Jingye Group.
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In an awkward moment, the US president dropped part of the document as he opened a folder to show it to reporters. Starmer retrieved the pages from the ground, before Trump went on to erroneously describe it as a “trade agreement with the European Union”, the bloc which the UK left five years ago.
The deal is the first sealed by Trump following his decision to ratchet up tariffs against countries worldwide. While the US president has also secured a trade framework with China that lowered escalating tariffs, agreements with other trading partners have proved more elusive.
His administration will tout the UK agreement as a signal that his tariff war is bearing fruit, after winning UK concessions on agriculture. The pair agreed to reciprocal access to 13,000 metric tonnes of beef for both US and British farmers, though the UK says any US imports will need to meet its food safety standards.
For Starmer, sheltering key industries from more aggressive tariffs before other countries strike their own deals with the US is a vindication of his diplomatic approach of refusing to overtly criticise Trump. But the absence of steel for now is a major blow, with a UK official saying tariffs remained at 25 per cent, despite last month’s framework document laying out plans to drop them to zero. BLOOMBERG
