AsianFin -- U.S. President Donald Trump announced on Thursday the administration has made its first trade deal with the trading partner since his sweeping worldwide reciprocal tariffs were imposed a month ago.

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Trump in Oval Office unveiled the outlines of a “historic agreement” with the United Kingdom on trade that remains short on details. “The final details are being written up,” Trump said. “In the coming weeks we’ll have it all very conclusive.”

Trump said the deal will involve billions of dollars of American exports including American beef, ethanol, and other agricultural products, and the U.K. will fast-track goods through its customs processes as the U.S. receives new market access for machinery and chemicals. The Kingdom will reduce or eliminate numerous non-tariff barriers that unfairly discriminated against American products, stated the president.

In the phone call to the Oval Office, the U.K. Prime Minister Keir Starmer called the announcement of the deal a "fantastic, historic day". This historic deal delivers for British business and British workers protecting thousands of British jobs in key sectors including car manufacturing and steel, said Starmer. “This is going to boost trade between and across our countries. It’s going to not only protect jobs, but create jobs, opening market access,” he said.

The baseline reciprocal tariff rate of 10%, which was announced on April 2, a date Trump proclaimed  “Liberation Day”, is still in effect, according to a fact sheet from the White House. That means the Trump administration will keep in place a 10% baseline U.S. tariff on U.K. imports. Meanwhile, the U.S. agreed to cut car tariffs on the U.K. to 10% from 25%.

Under the deal, the first 100,000 vehicles imported into the U.S. by UK car manufacturers each year are subject to the reciprocal rate of 10% and any additional vehicles each year are subject to 25% rates, according to the fact sheet.

The 10 Downing Street highlighted the deal with the U.S. saves thousands of jobs for British car makers and steel industry. It said car export tariffs will reduce from 27.5% to 10% - saving hundreds of millions a year for Jaguar Land Rover alone. This will apply to a quota of 100,000 UK cars, almost the total the UK exported last year.

The U.K. steel industry will no longer face tariffs thanks to Thursday’s deal, the U.K. government said, adding that Starmer negotiated the 25% auto tariff down to zero, meaning U.K. steelmakers can carry on exporting to the US.

The deal requires the U.S. to negotiate an alternative arrangement to the Section 232 tariffs on steel and aluminum, and it creates “a new trading union for steel and aluminum”, according to the White House. It said the deal will “significantly” expand U.S. market access in the UK, creating a “$5 billion opportunity for new exports” for U.S. farmers, ranchers, and producers, including more than $700 million in ethanol exports and $250 million in other agricultural products, like beef.

The U.K. in a press release described the deal as “a win for both nations” as they have agreed “new reciprocal market access on beef – with U.K. farmers given a quota for 13,000 metric tonnes.”  The document noted there will be no weakening of U.K. food standards on imports.

Besides, the U.K. will remove the tariff on ethanol – which is widely used in its manufacturing sector - coming into the country from the U.S., down to zero.

Asked why the U.S. first struck the trade deal with Britain, Trump said the U.K. “opens up a tremendous market for us.”   Pressed if that baseline tariff is a template for future trade deals, Trump replied, “No, no.” “That’s a low number, they made a good deal,” Trump said of the U.K.  

Trump suggested 10% will be the floor for his tariffs on other countries that seek trade agreements with the United States. “Some will be much higher because they have massive trade surpluses,” the president said.

U.S. Commerce Secretary Howard Lutnick told reporters in the Oval Office that the U.K. will still be under the 10% baseline tariff that Trump has applied to dozens of countries. However, tariffs on vehicles will fall from 25% to 10% to match that baseline. "They could send 100,000 cars into America and only pay a 10% tariff, and that protects their car industry," Lutnick said.

Lutnick also said the U.K. will announce that British companies are buying $10 billion worth of Boeing aircrafts.