President Donald Trump is scheduled to announce the framework for a trade agreement between the US and the UK on Thursday, according to people familiar with the plan.
On Wednesday, Trump said he was preparing to announce “a major trade deal with representatives of a large and respected country.” In a post about the Truth Society, he promised it would be “the first of many.”
Investors have been waiting for Trump to ease his world trade war amid fears that long-term uncertainty about tariffs could seriously damage the world’s biggest economy.
The agreement with the UK would mark Trump’s first trade deal as he imposed tariffs on dozens of countries on April 2, a move called the “liberation date.” Separately, Trump has introduced custom-made tariffs on certain US imports such as cars and steel.
Trump has accused other countries of exploiting the United States through trade and throwing his tariffs to bring his tariffs back to the United States if necessary. He also wants to use tariffs to fund future tax cuts.
What is possible with the US-UK trade agreement?
At this time, most imports from the UK to the US face 10% tariffs. The UK, like other countries, was hit by a 25% tariff on steel and aluminum exports to the US and a 25% tariff on automobiles and auto parts.
The broad overview of the proposed transaction has been clear for some time. Significant cuts in US tariffs on steel and automobiles in the hopes of Trump’s general tariffs being maintained at 10%.
The UK is expected to reduce 2% digital services tax on US tech companies, 10% tariff on automobile imports, and changes in duties on US agricultural products.
However, Jonathan Haskell, a former member of the Bank of England’s Monetary Policy Committee, told the BBC:
He suggested that today’s announcement is likely to be a transaction, and could merely be an exemption from certain trade barriers introduced by Trump last month.
But on Thursday morning, Trump said he was “a complete and comprehensive one that solidifies U.S.-U. ties with the UK for years to come.”
Both governments are likely to present the contract announced today as a significant victory, but essentially returning to the status quo and removing the newly imposed tariff barrier.
It is still unclear how much the agreement will contribute to economic production in both countries.
What does the US and the UK trade?
In 2023, the UK had a comprehensive trade surplus with the US. The UK reported surplus of goods and services of £71.4 billion ($95 billion). But most of that headroom came from service.
On the product side, the UK exported 15.3% of its products to the US in 2023, bringing it to about 60 billion pounds ($800 billion).
Machinery and transport equipment accounted for the largest share of £27 billion ($36 billion) and £14 billion ($19 billion) of chemicals ahead of the market.
Conversely, the US exported $77.2 billion in goods to the UK in 2023. Ten percent of all British imported goods came from the US that year.
Machinery and transport equipment accounted for the largest share of nearly £20 billion ($27 billion), fuel.
On the services side, the US exported $760 billion to the UK in 2023 through advertising and banking services, and $170 billion to the UK. These are not affected by customs duties.
Could US deals serve as a blueprint for other US negotiations?
Trump’s top negotiators have been engaged in a surge in meetings with trade partners since the April 2nd release of the president’s “liberation day.”
Trump delayed the implementation of “mutual” tariffs in most countries by April 9th by the 90th, but he raised them to 145% for China. Beijing slapped 125% tariffs on US goods.
The mutual tariffs, which had varying from 10% to 39%, were designed to clash with countries where Washington has major trade obstacles or impose heavy tariffs on US goods.
Although the UK was not among the countries hit by these mutual tariffs, today’s announcement could set precedents for other bilateral trade transactions.
On Tuesday, Trump said he will consider potential trade agreements over the next two weeks to decide how much he will accept. Last week he said, “We [already] It has potential trade deals between Korea and Japan.”
After his 90-day refusal, sudden mutual tariffs are scheduled to be imposed on US trading partners in early July, with representatives of the country racing to avoid the nausea of full-scale trade with the world’s first economy.
What stages of cooperation has the United States reached with other countries?
China
The total commodity trade between the US and China was estimated at $58.24 billion in 2024, according to data from the US Trade Representative.
US goods exports to China totaled $143.5 billion, while US imports from China totaled $438.9 billion. As a result, the US trade deficit with China was $295.4 billion last year, 5.8% ($16.3 billion) from 2023.
US Treasury Secretary Scott Bescent will meet with China’s deputy prime minister this weekend in Switzerland.
The meeting will take place in Geneva and is expected to address Trump’s decision to end a wide range of tariffs, certain product obligations, export controls and “minimum” exemptions on low-value imports.
China’s Commerce Department said last week it was “evaluating” the offer from Washington. The Geneva Conference will be the first between the two since Trump’s trade tariffs were announced in April.
On Tuesday, Bescent told Fox News: [the US and China] They have a common interest that is not sustainable. 145% and 125% correspond to embargo. I don’t want to separate it. What we want is fair trade. ”
Trump accused China of manipulating currency to make exports cheaper. He also accused Beijing of adopting what he says is a practice of collaborating in the market, including direct government support for Chinese companies, tax credits and priority loans.
european union
In 2023, the EU exported 520 billion euros worth of goods to the US, imported 344 billion euros worth of goods from the US, and supported 157 billion euros ($17.7 billion) to the EU, which amounted to a commodity trade surplus.
After Trump temporarily dropped 20% mutual tariffs in the EU in April, the EU suspended retaliation duties at 21 billion euros ($24 billion) until July 14th.
Since then, Brussels has said it wants to increase US goods imports by 500 billion euros ($57 billion) to address the “problems” of trade relations.
Maros Sefcovic, the EU’s top negotiator, recently told the Financial Times that the bloc has “developed” in attacking deals.
However, Sefcovic suggested that the EU would not accept an indefinite 10% tariff on exports as a fair resolution in trade negotiations. He added that his “ambition” is still to hit a “balanced fair” deal with the White House.
He also said that his US counterparts should consider US services exported to the EU.
The EU experienced a 100 billion euro ($123 billion) trade deficit in the US in 2023 from a service perspective. Brussels exported 319 billion euros ($361 billion) to the United States that year, and imported 427 billion euros ($483 billion).
Taking this into consideration, the US trade deficit will be around EUR 500 billion ($57 billion) with the EU.
The $57 billion US deficit could close quickly, Sefcovic added, along with a deal to buy more US gas and produce. Consultations are currently continuing.
India
In the first three months of 2025, India exported $27.7 billion in goods (mainly pharmaceutical and engineering products) to the US and imported $10.5 billion in goods (mainly aircraft and medical products).
On Tuesday, Trump said India agreed to drop “nothing” all tariffs on US imports. New Delhi has not yet issued an official statement confirming Trump’s remarks.
At a White House event alongside Canadian Prime Minister Mark Kearney, Trump said: “India has the highest tariffs in the world. We’re not going to hold back on that. They agreed to drop it.
India is reportedly proposing to eliminate some US import duties, including steel, auto parts and drugs, as part of an ongoing bilateral trade talk with Washington.
India currently imposes tariffs on US imports ranging from 5% to 30%, depending on product category.
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