President Donald Trump has announced a new trade deal between the United States and the United Kingdom, marking what he described as a “historic day” for the transatlantic alliance. The agreement, unveiled on the 80th anniversary of VE Day, is the first major trade accord since the president introduced sweeping tariffs on dozens of trading partners earlier this year.
Speaking at a press conference in the Oval Office, Trump said the deal would “remake the global trading system” and strengthen economic ties between two of the world’s largest economies, even as final details are still being completed.
Prime Minister Keir Starmer hailed the announcement as a major diplomatic achievement, calling the agreement “an incredible platform for the future”. Starmer noted the symbolic timing of the deal, aligning it with the 80th anniversary of Victory in Europe Day, when Winston Churchill announced the end of World War II in Europe. The Prime Minister emphasised the deep-rooted alliance between the UK and the US in defence, intelligence and now, increasingly, in trade and technology.
“There are no two countries closer than the US and the UK in areas like defence and intelligence sharing,” Starmer said. “Now, trade and economic policy have joined that list.”
The agreement includes provisions to lower tariffs and expand bilateral trade in key sectors. The US has agreed to cut tariffs on UK-made cars to 10%, while the UK will continue purchasing Boeing aircraft worth $10 billion. The deal also grants tariff-free access for UK-made Rolls-Royce jet engines and includes favourable terms for US exports such as ethanol, beef, and industrial machinery.
Howard Lutnick, a senior member of the US trade negotiating team, described the UK as a “huge market” and said the agreement would be worth £5 billion to US companies. He said the deal aims to reduce red tape and streamline customs procedures.
Trump praised the negotiating teams on both sides and thanked Starmer for his partnership, describing the UK as “right at the top” of America’s closest allies. He added that “many meetings” were planned with other nations in the weeks ahead to expand on the new framework.
Steel was also highlighted as a key part of the agreement. Trump said the aim was to ease restrictions and reinvigorate trade in the sector, adding, “We will become strong when trade in steel is uneased.”
The announcement comes after months of volatility in global markets following Trump’s April 2 “Liberation Day” tariff announcement. While the US has since delayed the imposition of its harshest reciprocal tariffs until July, the baseline 10% tariff on imports and the 145% levy on Chinese goods remain in place.
The UK was spared the worst of the tariff increases due to its favourable trade balance with the US, importing more American goods than it exports.
Despite the upbeat tone, experts have urged caution in interpreting the agreement as a fully finalised trade deal. Simon Gleeson, head of the US corporate desk at tax and advisory firm Blick Rothenberg, said the deal “appears more like a statement of intent and tariff mitigation rather than the much longed-for signed declaration”.
“Industries like steel, aluminium and car manufacturing show how narrow today’s focus has been—£59.3 billion compared with £137.0 billion in services,” he said.
Gleeson added that volatile market conditions and bond market uncertainty may have helped to bring “sense and sensibility” to the negotiating table, noting that the tone had shifted from strong rhetoric to a more constructive outlook.
The UK government said it remains committed to building on the agreement and creating a modern, balanced trade relationship with the US. A government spokesperson said: “This agreement reinforces our strong economic and strategic partnership and lays the groundwork for deeper cooperation in the years ahead.”
As both nations move forward, the announcement has been widely seen as a timely reaffirmation of the “special relationship” between Britain and the United States—one that could shape a new chapter in global trade.