U.S.-U.K. trade deal the first since Trump tariffs announced

With the U.S. economy shrinking for the first time since the pandemic amid growing prices and stock market chaos, the trade deal announced today with the U.K. comes at a critical time for both countries.

"The agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come," President Donald Trump wrote on social media. "Because of our long time history and allegiance together, it is a great honour to have the United Kingdom as our FIRST announcement. Many other deals, which are in serious stages of negotiation, to follow!"

Though the trade deal is the first since Trump's tariffs hit markets, it's been in the works since Brexit and largely about other things.

The United Kingdom was not among the countries facing the big hikes. It has had baseline tariffs of 10% on its exports, as well as higher sectoral tariffs on exports of cars, steel and aluminum.

Trump retreated from his country-specific tariffs after markets plunged last month, pausing the hikes for 90 days, though he kept the 10% baseline in place, as well as those on autos, steel and aluminum — and extremely steep tariffs on China, where 145% tariffs have effectively stopped shipments. Economists have warned that the tariffs could lead to shortages of some goods and raise consumer prices for others.

The BBC has live coverage of the emerging details today. From the U.K. perspective, "the key diplomatic win is that an agreement on tariffs will keep the US sweet while leaving the door open to a deal with Europe – which would be much more economically significant for the UK. Economically, this US deal is likely to be relatively small." It's about the rolling back of some of the trade damage done by Donald Trump's original announcement."

As ever with deals like this, what are the trade-offs?

Many are keeping a keen eye on the digital services tax, which was introduced in the UK five years ago "to ensure…large multinational businesses…make a contribution to supporting vital public services".

It generates around £800m a year in revenue – is it reduced as part of this deal?

Previously:
• Visual gags in comedies: US vs UK
• Dark Toblerone discontinued in U.K.
• 8 years of austerity have turned the UK into a bleak Victorian dystopia, where pensioners without electricity die from fires ignited by their candles
• Spiders blamed after broken siren played creepy nursery rhymes randomly at night to UK townsfolk