President Donald Trump made the initial bilateral trade agreement known on May 8 since the so-called” Liberation Day” tariffs were unveiled on April 2. The United Kingdom’s agreement, which is referred to as an “economic success offer” rather than a free trade agreement (FTA ), provides a foretaste of what potential future trade agreements may look like, especially for close friends and trading partners like South Korea.
Importantly, the threshold tariff of 10 percent is still in place, which means there is good no reprieve for additional negotiating partners. Although the United Kingdom was not the subject of the mutual tariffs announced on April 2, the UK authorities made compromises that the United States felt were good enough to lead to an alternative arrangement for Part 232 tariffs on cars and material. Additionally, the two nations agreed to a quota system with base tariffs of 10 % and 25 % thereafter for the first 100, 000 UK vehicles that were sent to the US.
The agreement promotes the establishment of a , the United States , a quota at most favored nation ( MFN) rates for UK steel and aluminum, with the assumption that the United Kingdom  “meets US specifications on the security of the supply chains of steel and aluminum products” along with a commitment to continue negotiations. Due to the current other arrangements in place for the 232 tariffs that Asian metal exports to the United States are currently subject to, this could have consequences for Asian steel.
Any mention of service business taxes, including on , US films produced abroad, which President Trump has indicated he would destination, is a notable absence from the US-UK offer. He suggested that these issues may be handled differently at the US-UK business deal signing ceremony on May 8 at the . US studios spent$ 2.8 billion ($ 2.8 billion ) in the year 2024 on making blockbusters for the United Kingdom, including Barbie, Wicked, and other blockbusters. If the Trump administration pursues this expense in full, it might turn into a significant problem for the United States and other nations.
Without significant investment commitments, no deal would be perfect. The parent company of British Airways, which is responsible for the deal, announced the purchase of approximately$ 13 billion value of Boeing aircraft within the first day of the agreement, which Secretary of Commerce Howard Lutnick teased. Lutnick , who was speaking at the press event where the trade agreement was announced, stated  that the US had “agreed to allow Rolls-Royce engines and those kinds of airplane parts to come over tariff-free,” despite the complexity of such a deal’s formal text not being disclosed.
Beyond these points, the agreement does not mention Britain’s future status under AI export controls or access to chips ( the Joe Biden administration’s” AI diffusion rule,” which guarantees the country’s tier-one status, was rescinded shortly after the talks ), nor did US companies offer any chip or AI concessions in tandem. This contrasts favorably with Trump’s subsequent moves in the Middle East, where he also received significant concessions and concessions at the same time as company offers allowing countries to access advanced US silicon systems.
As the leader develops new deals, command over access to AI technologies and innovative chips may be a crucial component of the cloth as these agreements are made.
President Trump left the agreement with market development for US agricultural products in the UK, including$ 700 million for alcohol exports, along with commitments for provide chains on pharmaceuticals, and labor, climate, intellectual property, and commitments for supply expansion. One of the most important effects of a US-Korea agreement could be that the United Kingdom will remove its 20 % tariff on beef exports and replace it with a quota system for US goods of the product. This is a significant growth in Korea’s negotiation process, where the nation still imposes restrictions on the transfer of US beef jerky products and meat that isn’t older than 30 months.
In line with these points, UK laws still apply regarding substances and medicines. Premier Keir Starmer clarified  that UK foods standards would not be repealed, indicating that hormone-treated beef and chlorinated chicken will probably still be unsuitable for export. Additionally, the two nations agreed to work together on digital trade, which would mean that Korea’s docket could include issues relating to the US-Korea online platform.
Setting a precedence?
For whoever is waiting up future, the ins and outs of the UK offer mean a few things.
No purchase agreements, in essence, don’t seem to be sufficient to reform the 10 % base price. This is the lowest levie that could be levied on different nations for the near future. It is important to point out that the United Kingdom does not experience “reciprocal tariffs” in contrast to South Korea. The trade agreement, therefore, only provides limited information on how to lower U.S. tariffs from 25 % to the 10 % level.
Next, a bargain nearly certainly means that prominent business investments can be used as a negotiating tool for price reductions. The acting in this scene is magical: the adviser is standing before the cameras while the United Kingdom’s offer is being made in the Oval Office. Attention will be paid to high-level attention and apparent head devotion in order to make a bargain.
It’s even up for debate whether significant investments made prior to the bargaining days, such as Hyundai’s$ 21 billion bb, a March news about the country’s role in the Alaska LNG network, will be included in a business deal, or whether agreements will need to be made right away.
Last but not least, the English agreement included some carefully worded pledges that were scheduled to be resolved at a later time. Both nations were promised to continue” to identify” potential locations for business relations in one clause. There were no prior FTAs entered into the partnership between the United States and the United Kingdom. Both nations are given the option to cancel the contract with written notice. This makes the agreement distinct from the US-Korea FTA, which requires and, more importantly, does not appear to be legally binding.
Name is crucial. Since this is an “economic growth deal,” any kind of post-Brexit FTA would likely necessitate further discussion. The United Kingdom’s May 8 agreement did not specify how much of a bargain may abrogate or modify the KORUS FTA in South Korea. However, the signing of a European deal agreement indicates that things are beginning to advance and that Liberation Day may not be the be all that is possible.
The Korea Economic Institute of America, which previously published this article in its publication The Peninsula, has an economic policy analyst named Tom Ramage. With agreement, the content can be republished.