US-UK deal: The opening shot for America's global trade strategy

On May 8, President Donald Trump and UK Prime Minister Keir Starmer jointly announced a landmark bilateral trade agreement, the first signed under the Trump administration’s “Negotiate Bilaterally – High Tariffs” trade strategy, which aims to reshape the world trade order and put pressure on other major economies .

The agreement is not only symbolic in the US-UK alliance, but also lays the foundation for subsequent negotiations with countries such as China, Japan, South Korea and India...

Ambassador Hoang Anh Tuan - Consul General of Vietnam in San Francisco (Former Deputy Secretary General of ASEAN).

Many key strategies

According to the announcement, many key strategies and trade balance-related issues between the UK and the US have been agreed upon.

Specifically, the US agreed to reduce tariffs on cars imported from the UK from 27.5% to 10% on 100,000 cars per year - nearly all the cars the country exported last year. In 2024, the US imported $474 billion worth of auto products, including $220 billion worth of passenger cars. Of that, the UK exported nearly 90,000 cars to the US in 2024.

However, cars exceeding the quota will still be subject to a 25% tax. This is a balanced move, opening up the UK while protecting the domestic auto industry.

A month ago, after the Trump administration announced new tariffs, British luxury carmaker Jaguar Land Rover announced a temporary halt to exports to the US market. Public opinion said that the US tariff policy was a heavy blow to car manufacturers originating or currently manufacturing from factories located in the UK such as Jaguar Land Rover, BMW and Aston Martin - brands that have achieved great success in the US market.

A key issue also mentioned in the trade agreement is that the UK will expand its $5 billion agricultural and beef export market to the US.

The two sides have agreed on “reciprocal” market access for beef, with British farmers being granted a duty-free quota for 13,000 tonnes of beef entering the US, while US quality standards for food imported from the UK and vice versa remain in place.

US President Donald Trump and British Prime Minister Keir Starmer. (Photo: Reuters)

According to US Secretary of Commerce Howard Lutnick, the agreement will create new export opportunities worth about 5 billion USD for the US, while the new tariffs announced before and still maintained after the agreement will generate 6 billion USD in revenue for the Government budget.

Under the new deal, the US will also reduce tariffs on steel imports from the UK from 25%, which have been in place since 2018, to zero, while the UK will reduce tariffs on US ethanol from 19% to zero. This could help boost UK ethanol exports to the US by $700 million.

The US and UK have agreed to form a steel-aluminum alliance to jointly impose a 25% tax on similar products from countries suspected of dumping.

The two countries will agree to zero tariffs on essential pharmaceutical products, creating a solid foundation for a shared medical supply chain. Although the details are yet to be finalized, this is a positive sign for the pharmaceutical industries of both countries.

The US and UK also commit to high standards on intellectual property and the environment. The agreement sets out strict obligations on intellectual property protection, labor rights and environmental standards. This reflects the efforts of both countries to combine free trade with responsibility for sustainable development.

In particular, the US also said it would prioritize access to aerospace components from the UK.

US manufacturers, particularly in the aerospace industry, will have easier access to high-quality components from the UK – a country with strengths in this industry. This is a strategic move to strengthen the US competitive advantage in high-tech industries.

Britain is expected to announce a $10 billion deal to buy Boeing aircraft assembled in the United States in exchange for the US waiving tariffs on Rolls-Royce aircraft engines imported from the UK. This news sent Rolls-Royce shares soaring in trading on the London Stock Exchange on May 8.

Pressure on many economies

British Prime Minister Keir Starmer called the trade deal with the US “a historic day”, while US President Donald Trump said: this is “a groundbreaking trade deal with the UK”.

However, the US still maintains a basic 10% tariff on British goods, a move that shows that the US no longer supports unconditional free trade.

In return, the UK pledged to remove technical and administrative barriers that have hindered US goods, especially in the agricultural and processed food sectors. This is a significant concession, paving the way for US businesses to expand their market share in the UK.

The US-UK trade deal is not only a diplomatically symbolic event, but also an official declaration of the return of the “two-way negotiation, high tariffs” strategy pursued by President Trump. While Prime Minister Starmer has achieved an economic step forward in the post-Brexit context, Mr. Trump has also achieved a political victory - creating pressure that spreads to other major economies.

The UK being the first country to sign a bilateral agreement with the Trump administration sets an important precedent. Other countries, especially those threatened with higher tariffs, will be forced to adjust their negotiating positions if they want to maintain access to the US market.

America's trading partners — from Asia to Europe — are now forced to choose between early negotiations or accepting heavier tariffs.

The US-UK agreement is therefore not simply an economic agreement, but a tool to reshape the global trade landscape in the coming decade.

Ambassador Hoang Anh Tuan

Source: https://vtcnews.vn/thoa-thuan-my-anh-phat-sung-mo-man-cho-chien-luoc-thuong-mai-toan-cau-cua-my-ar942338.html