In May 2025, the United States announced two separate trade agreements: an economic cooperation framework with the United Kingdom and a preliminary trade arrangement with China. The U.S. government states that both agreements are aimed at promoting two-way trade, reducing trade barriers and strengthening strategic cooperation.
On May 8, in a joint statement, President Donald J. Trump and British Prime Minister Keir Starmer presented the so-called Economic Prosperity Deal (SPD), a framework document designed to deepen economic relations between the two countries. The agreement includes plans to reduce reciprocal import tariffs. For example, a previous twenty percent tariff on U.S. beef exports to the United Kingdom will be eliminated, within an annual quota of thirteen thousand tons. At the same time, British auto exports to the United States will be allowed at a ten percent tariff, subject to a maximum of one hundred thousand vehicles per year. Also, the United Kingdom is opening an import quota of 1.4 billion liters for U.S. ethanol.
In addition to tariff measures, both countries express their intention to remove barriers outside of tariff policy. They indicate their intention to cooperate on market access for agricultural products, expanding mutual recognition of technical standards and promoting digital trade. Furthermore, the framework includes agreements on cooperation around economic security. This focuses on joint action against disruptive market practices by third countries, strengthening supply chains in sectors such as steel and aluminum, and improving customs cooperation to prevent tariff evasion.
Although the SPD does not currently have a legally binding status, both sides have announced that they will continue negotiations on issues such as intellectual property, labor rights, environmental policies and technological cooperation.
A few days later, the United States and China reached a tentative trade settlement after talks in Geneva. The negotiations were led on the U.S. side by Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, while Vice Premier He Lifeng led the Chinese negotiating team. At the heart of this agreement is a temporary reduction of import tariffs between the two countries. For a period of ninety days, most import tariffs will be reduced by 115 percent, while maintaining a base level of 10 percent. China has agreed to withdraw the retaliatory tariffs it introduced on April 4. The United States is doing the same with additional tariffs that went into effect in early April, but is retaining previous levies, including those under Section 301.
A key part of the agreement involves addressing the fentanyl crisis in the United States. The Chinese government has promised to take measures to stop the export of fentanyl precursors to North America. Talks on this subject took place with a vice minister of public security from China. Both countries additionally stated their intention to work to reduce the US trade deficit with China, estimated at $295.4 billion in 2024. The agreement also provides for the establishment of a bilateral mechanism for continued negotiations.
Both agreements are presented as preliminary steps, with the goal of building broader trade agreements in the coming months. Analysts point out that the effects will only become clear once concrete legal obligations are established. The non-binding nature of the agreement with the United Kingdom means that additional negotiations will be necessary to formalize the proposals. They also point to the fact that existing base tariffs of 10 percent will remain in place, which could affect future trade flows.
The economic impact of both agreements will only become visible in the longer term, depending on the elaboration and implementation of the agreements reached. The governments involved have indicated that further talks are planned, with a view to more comprehensive, binding agreements in the near future.
