A partial victory for Starmer only

It was the second major trade deal in just three days for British Prime Minister Keir Starmer. First, with India. And on Thursday, the big prize: the United States. Starmer was caught following Arsenal's match against Paris Saint-Germain when he received a call from President Donald Trump warning him he was about to announce it. The French won, but the British prime minister achieved a more significant triumph the following day: the first major trade agreement with the Americans to reduce the tariffs announced on "Liberation Day." A very timely diplomatic victory for a Labour leader weakened by the rise of the far right in the last local elections, and significant support for his policy of rapprochement—some would say genuflection—with the United States. The historic "special relationship" between Washington and London is more consolidated than ever. Moreover, on a day marked by the symbolism of the alliance between the two nations, the 80th anniversary of the end of World War II in Europe. The economic benefits of the agreement, in any case, may be much more limited.

The pact has raised great expectations around the world, with attempts to interpret it as a guide for future US pacts with other countries. The end of multilateralism and the confirmation of a new economic order based on bilateral trade agreements between the United States and the rest of the world are now in black and white. The next step could be an agreement with China, a country with which Washington will open high-level negotiations in Switzerland this weekend. That same Friday, Trump proposed a radical reduction in export duties to the Asian giant from 145% to 80%.

British leader secures first major trade deal with US, with limited benefits

In general terms, the agreement with London seems to indicate that the new basis for trade relations with the United States will be 10% tariffs on sales of products to that country. If not even the United Kingdom has managed to reduce these tariffs to zero, it is highly unlikely that any other country will. But the United Kingdom's situation with respect to the United States is very unique and therefore not easily replicated in negotiations with other countries.

The “special relationship” The pact represents a timely diplomatic victory for a Labour leader weakened by the rise of the far right in the recent local elections.

To begin with, the United Kingdom maintains a trade deficit with the United States, from which it buys numerous manufactured, agricultural, and livestock products. It also spends 2.3% of its GDP on defense spending. It also has a leader who has managed to win Donald Trump's favor. Even so, the agreement signed between the two countries is not entirely favorable to the United Kingdom.

On the day the pact was announced, Keir Starmer emphasized that thousands of jobs have been saved in the British automotive industry thanks to the reduction of tariffs on cars from 27.5% to 10% for a quota of 100,000 vehicles per year (the current export level). Furthermore, tariffs on aluminum and steel are reduced from the current 25%. In return, the British commit to buying Boeing aircraft and giving American farmers greater access to their market. Washington has also agreed to allow duty-free imports of Rolls-Royce aircraft engines. In any case, a minimum tariff of 10% remains in place on most products, a measure that London has unsuccessfully tried to withdraw.

The British negotiating team believes they will be able to reduce the base tariff of 10% in the near future, although the United States has made it clear in recent weeks that it does not intend to go below that minimum. Negotiations are continuing, and they hope to make progress on further sectoral cuts. These will be modest reductions, in any case, analysts point out.

'The new normal' The agreement indicates that the minimum tariff of 10% will become the new normal on a global scale.

As Bank of England Governor Andrew Bailey noted this Friday, tariffs are falling but remain above the level before Trump took office, averaging 2.4%. “Of course, this is good news, but we must also keep in mind that tariffs remain higher than they were when all this started,” Bailey emphasized. This is an unthinkable scenario just a year ago.