Donald Trump announces US-UK trade deal: US to cut tariffs on cars from 25% to 10%; UK to lower barriers on US exports

US President Donald Trump announced on Thursday (May 8) that his administration has reached a trade agreement with the United Kingdom—the first such deal since his sweeping tariffs were imposed on US trading partners. Speaking from the Oval Office, Trump called the deal a “maxed-out” agreement that will boost American exports and benefit both nations.

Key trade concessions

Under the trade deal, the UK will reduce non-tariff barriers on a range of US goods, including beef, ethanol fuel, machinery, and chemicals. However, the 10% baseline tariff the Trump administration has applied broadly remains in place, while tariffs on British vehicles entering the US will drop from 25% to 10%.

Commerce Secretary Howard Lutnick highlighted the economic gains during the Oval Office announcement:

“We’ve opened up new market access—ethanol, beef, machinery, all the agricultural products,” Lutnick said. “They’ve agreed to open their markets, and that will add $5 billion of opportunity to American exporters.”

Tariff shift for cars

Lutnick elaborated on the auto sector impact, saying: “They could send 100,000 cars into America and only pay a 10% tariff, and that protects their car industry.”

‘Maxed-out’ but flexible deal

Pressed by reporters about the scope of the agreement—after British Ambassador Peter Mandelson described it as “only a starting point”—Trump insisted the deal was comprehensive.

“This is a maxed-out deal that we’re going to make bigger and we make it bigger through growth,” Trump asserted. “There’ll be changes made, there’ll be adjustments made because we’re flexible… But it’s very conclusive, and we, we think everyone’s going to be happy.”

UK sees it as a platform

Earlier, Mandelson acknowledged the deal’s significance but positioned it as an opening step rather than a final achievement.

“The deal provides us with the platform, the springboard to what I think will be even more valuable for both our countries in the future,” Mandelson told reporters. He emphasised: “This is not the end—it’s just the beginning. There is more we can do in reducing tariffs and trade barriers so as to open up our markets to each other even more than we’re agreeing today.”