Kristina Roberts
On May 8, 2025, U.S. President Donald Trump and British Prime Minister Keir Starmer announced a new trade deal between the two countries. However, this deal is limited, meaning it does not cover everything. The most important thing to know is that Trump’s 10% taxes (called tariffs) on British goods will remain. The deal does make it easier for some farm products to be traded and reduces high taxes on British cars sold in the U.S.
What the Deal Includes:
This agreement is just the first of many deals Trump wants to make with different countries. Earlier, he had put very high taxes on imports from many nations, including the European Union. His goal is to change global trade rules to help the U.S. economy and reduce America’s huge trade deficit (which is the difference between how much the U.S. buys from other countries and how much it sells to them).
What Trump Said:
Trump mentioned that this deal with the UK is not a model for other countries. He said, “Britain made a good deal,” but warned that other nations might face much higher tariffs if they don’t agree to his terms. He also pointed out that many countries sell more to the U.S. than they buy, which he wants to change.
Recent Tariff Changes:
In April 2025, Trump had introduced taxes as high as 50% on goods from 57 countries, including the EU. He later paused these taxes to give time for negotiations. At the same time, he added a 25% tax on imported cars and removed all exceptions on taxes for steel and aluminum. He also started new investigations into taxes on medicines, copper, wood, and computer chips.
Starmer’s Role:
British Prime Minister Keir Starmer spoke with Trump from a car factory in the West Midlands, UK. The deal helps British car companies by lowering U.S. taxes on their exports, which is good for UK jobs. However, many British businesses are unhappy because the 10% tariffs on other goods remain.
Why This Matters:
Trade deals affect prices of goods, jobs, and the economy. When taxes on imports are high, products become more expensive. This deal helps some industries, like farming and car manufacturing, but does not solve all trade problems between the U.S. and UK.
What Happens Next:
Trump is still negotiating with other countries to lower tariffs. The UK hopes this small deal will lead to bigger agreements in the future. However, with the 10% tariffs still in place, British companies will have to find ways to compete in the U.S. market despite the extra costs.
Impact on Consumers and Businesses:
The new trade deal could lead to mixed results for everyday people. On one hand, lower tariffs on British cars might make them slightly cheaper for American buyers. On the other hand, the 10% tariffs staying in place mean that other British products, like clothes or food, could still cost more in U.S. stores. British businesses exporting to America will have to decide whether to absorb the extra costs or pass them on to customers, which could affect sales. Smaller companies, especially, might struggle with the added expenses.
Global Reactions and Future Talks:
Other countries are closely watching this deal to see how Trump handles future negotiations. Some nations might be encouraged to make similar agreements to avoid higher tariffs, while others could resist, leading to more trade disputes. The UK government hopes this deal will strengthen its relationship with the U.S. and open doors for bigger trade talks later. However, with Trump’s focus on reducing the U.S. trade deficit, future discussions could be tough. The world will be waiting to see if this small deal leads to bigger changes or if trade tensions continue to grow.
