Donald Trump reduced prices on British metals and cars, but what is the importance of this trade agreement? Experts react

The American president described this as a great problem. The British Prime Minister said it was a fantastic historical day. It is sure, Keir Starmer and his team will have been delighted that the United Kingdom is online to negotiate adjustments to Donald Trumps, scanning prices announced on the Liberation Day just a few weeks ago. But what really means trade between the United Kingdom and the United States? We asked four economic experts to respond to the announcement of the Oval Office.

Victories for the United Kingdom are real, but limited

Maha Rafi Atal, Adam Smith Seinter Confer (Associate Professor) in Political Economy, University of Glasgow

The new commercial announcement of the United Kingdom-US is less a breakthrough than an act of careful partial, tactical and politically calculated balancing.

The key victories of the United Kingdom are real but limited. British metals and automobiles are relaxing, partly thanks to the acquisition of the British government of the SCUTHORPE steel installation, belonging to Chinese, eliminating a long -standing American objection. But even the car rates are only feared at the general basic line of 10% and not eliminated.

Agriculture and technology remain the real stress points. The United Kingdom has granted market access to American agricultural products, including beef, but especially without changing its food security standards. This bypass a national political fight and avoids undermining the arrangements of Northern Irish of the UKS or its alignment of the EU. However, if the American beef does not meet these standards, access to the market can be without meaning in the practice of setting up future pressure points.

Perhaps victory in the most notable United Kingdom: it retains its tax on digital services on American technology giants. This tax hits Silicon Valley, and the United States wanted it. Instead, the announcement denounces this to future talks holding the line for the moment, but not permanently ensuring it.

This is not the long-awaited British-American free trade agreement. It is not a treaty, not complete and not ratified. It is a limited arrangement at the executive level with more questions than answers and more negotiations to come.

Stronger links and seriously necessary growth to come

David Collins, professor of international economic law, City St Georges, University of London

This agreement is an excellent development which should help restore the trade relationship of the United Kingdom with what it was before President Trump took office for the second time. At the time of writing the editorial time, few details on the arrangement are known. But the 25% price on British steel and aluminum has been removed, as is the rate rate on most car exports from 27.5% to 10%

The lower car rate applies to the first 100,000 exported vehicles from the United Kingdom to the United States each year. About 101,000 was exported last year.

More details are promised in the coming days and weeks. Perhaps they will include an agreement that separates the United Kingdom from any restriction that the United States intends to impose on the film industry. In return, the United Kingdom could eliminate its tax on digital services in the United States (which I argue that it should never have imposed because it will only increase prices for consumers and will generate little income).

But on the whole, it seems clear that the Labor government has prioritized the UKS relationship with the EU, obviously seeking a link as close as possible without officially rejoicing. Thus, although this agreement with Trump is well below a complete free trade agreement, it is a welcome development which should strengthen Anglo-American links and bring very necessary economic growth to the two countries.

Political theater for both parties

Conor O'kane, lecturer in economics, University of Bournemouth

This announcement is a framework for a trade agreement rather than a real official agreement completed. Commercial transactions are detailed, complex and take several months to negotiate.

The United States and the United Kingdom are both countries with massive persistent structural deficits. It is very unlikely that what has been announced considerably modifies the dial on the structural deficit of countries or growth forecasts.

Jerome Powell, president of the United States Federal Reserve, recently warned that Donald Trumps Tariff Policy risked higher inflation and higher unemployment at the same time, which economists call stagflation. The presidents' announcement will prove a welcome distraction of Powells comments.

The agreement should perhaps be considered symbolic. Trumps Us Tariff Politics has been chaotic to date and his administration finally has something that they can point out as a victory in the aftermath of the Liberation Day.

Of course, a trade agreement is also good news for the Labor government after disappointing the local elections. Prime Minister Keir Starmer can claim economic credibility by first being online for a trade agreement, perhaps cement the special relationship.

Mini-tariffs on British cars. Balipadma / Shutterstock

However, is the United States a reliable partner to sign a commercial agreement? During his first mandate, Trump signed a free trade agreement with Mexico and Canada (the American-Mexico 2020 American agreement, or USMCA the successor to the Alena). At the time, he said that the agreement would be fantastic for everyone. But he then denied it.

There is also a broader strategic element. First of all, the United States wanted to obtain a trade agreement in place with the United Kingdom before what looks like a complete UE-UK trade agreement. Second, Trump considers the EU as an economic rival. By signing an agreement with the United Kingdom, it signals to other European countries the possibility of a potentially better commercial relationship with the United States outside the EU.

Deal leaves the door open for the European relationship

Sangeeta Khorana, professor of international trade policy, Aston University

The agreement is a tactical victory for the two countries. It facilitates commercial friction, supports key industries and establishes the framework of a broader British-American free trade agreement without having an impact on the economic reset of the UKS with the European Union.

The Ukus agreement, which suspends some of the recent prices, is specific to the sector and far from complete. It preserves British food safety and animal protection standards. And it protects the post-Brexit links of the EU while allowing the United Kingdom to cement its strategic partnership with Washington. Conferences will be launched on aerospace, advanced batteries, data flows and liberalization services within 12 months.

This is a timely coup, which comes so shortly after the agreement in India. The pact represents a strategic diplomatic gain which brings a relief of prices (and potentially associated uncertainty) for the main British industries, while preserving UKS regulatory alignment with the EU.

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