Here come the "deals"
This isn't a trade war—it's a war on trade.
A few hours ago US President Trump inked a trade deal with the UK—the first since 'Liberation Day'—containing the following terms:
- US tariffs on British steel and aluminium will be cut from 25% to zero.
- US tariffs on an annual quota of 100,000 British cars will be cut from 27.5% to 10%.
- The UK will lower its overall tariffs from an average of 5.1% to 1.8%.
- The 10% 'Liberation Day' tariffs on everything else will remain in place.
Trump tweeted the deal in the form of a low-quality screen grab:
That was followed up with a fact sheet containing three headings and a few dot points, although the only tariff rates quoted were the country's respective average agricultural tariff rates, stated as 9.2% (UK) and 5% (US).
Now, I'm not quite sure from where the Trump administration got the 5.1% total average figure, or the 9.2% and 5% agricultural figures. But I suspect it's from the bottom of these World Trade Organisation (WTO) country reports (UK, US) that display each country's simple average tariff rates in 2022.
Not with each other, mind you; with the world. If the administration had bothered to go beyond the top Google result, they would have discovered that the latest WTO data show that in 2024 the UK's average tariff rate with the US was just 3.3%. On a trade-weighted basis it was just 0.9%—i.e. lower than the "deal" that Trump just signed.
UK agricultural goods are indeed tariffed at a higher rate—9.8% on a simple average basis—but the UK imports very few agricultural goods from the US (~$1 billion, or less than 1% of trade). That's mostly because of differing food standards: as in Australia, the UK doesn't take kindly to things like chlorinated chicken and growth hormones in its beef, and those food standards won't be weakened as a result of this deal.
In other words, it's unlikely that the 9.2% agricultural tariff was the barrier preventing US exporters from accessing the UK market, so even if it's lowered it's not clear that US farmers will benefit at all.
So, what are the key takeaways here?
