The U.S. and U.K. are reportedly close to finalizing a trade agreement. This would be the first such pact since the U.S. implemented stringent reciprocal tariffs in April.
What Happened: The New York Times reported the development on Wednesday after President Donald Trump hinted to reporters on Tuesday during his meeting with Canadian Prime Minister Mark Carney, about ‘a very, very big announcement' this week before he leaves for the Middle East.
He did not reveal any specifics but said the announcement is “positive.” The publication noted that it remains uncertain whether a final deal with the U.K. will be signed or if a framework for future negotiations will be established.
Meanwhile, the U.K.'s Department for Business and Trade confirmed to CNBC that discussions on an economic agreement between the two nations are ongoing, but did not comment on the details or set any timelines. The spokesperson highlighted Britain’s steady approach to the talks and their goal to find a resolution that would ease pressure on British businesses and consumers.
Despite being subjected to a baseline 10% levy, Britain, which has a trade deficit with the U.S., was exempted from the higher reciprocal tariffs when President Trump announced his “Liberation Day” duties.
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Why It Matters: This potential trade deal comes in the backdrop of a global tariff chaos. Prior to this, the U.S. Vice President JD Vance expressed optimism about a possible trade agreement with the U.K.
Meanwhile, the U.K. and India finalized a landmark free trade agreement amid the tariff turmoil. However, in a sudden shift, President Trump stated amid mounting pressure that the U.S. doesn’t need to sign trade deals, contradicting earlier statements from his administration.
Notably, in February, British Prime Minister Kier Starmer met President Trump at the Oval Office, wherein Trump stated that the two got along “famously” and described the U.S.-U.K. relationship as “tremendous.”
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