The UK-US Trade Deal Is In—And So Is Your New 10% Tax

A historic handshake or the start of a American consumption tax? Either way, Americans will pay for the billionaire tax relief

Start with nothing, ask for everything, and end up with something you never had to begin with. Sounds familiar? That’s the strategy Vladimir Putin perfected in negotiations. Now, the Trump administration is running a near-identical playbook to push through its 10% universal tariff goal.

The United Kingdom is the first to partly fold. I’m not entirely sure whether to blame Prime Minister Keir Starmer for accepting 10% tariffs in certain sectors—or applaud him for securing a deal before anyone else. It’s probably both. Given the circumstances, he did what he had to do for his country.

A full-blown cooperation between the EU, Canada, and the UK to counter Trump’s tariffs? Almost impossible. There’s politics. There’s theatrics. And then there’s Donald Trump. Add to that the dependency on America that’s been built up over decades. If Western democracies can’t coordinate a pushback against Washington, a global response is even less likely. That’s the weakness Trump has spotted—and for what it’s worth, he’s starting to exploit it.

Britain calling its deal a “historic moment” is the clearest evidence yet that the strategy is working exactly as intended.

What’s in the UK-US Trade Deal?

The UK and US have reached a preliminary trade agreement that, while not a comprehensive free trade deal, includes several significant provisions:

• Automotive Tariffs: Tariffs on British car exports to the US will be reduced from 27.5% to 10% for up to 100,000 vehicles annually. Exports beyond this quota will face the higher tariff.

• Steel and Aluminum: US tariffs on UK steel and aluminum exports, previously set at 25%, will be eliminated, providing relief to British metal industries. This was a pragmatic decision by the Trump administration; keeping those tariffs would have severely hurt American manufacturers and triggered unmanageable national security consequences.

• Agricultural Products: The UK will lower tariffs on US beef and ethanol imports, enhancing market access for American farmers.

• Digital Services Tax: The UK's 2% digital services tax on revenues of large tech companies like Amazon and Google remains unchanged, despite US pressure to remove it.

• Pharmaceuticals: While no immediate changes were made, the deal allows for future negotiations on pharmaceutical tariffs, aiming for preferential treatment for UK exports in this sector.

• Aerospace Components: The US has agreed to exempt UK aerospace parts, including Rolls-Royce engines, from tariffs, benefiting the UK's aerospace industry.

While this agreement marks progress in UK-US trade relations, several contentious issues, such as digital trade rules and broader tariff reductions, remain unresolved and will likely be addressed in future negotiations. But this deal is just the opening act in a much larger drama playing out on the global economic stage.

Why Is Trump Pushing for a 10% Universal Tariff?

He won’t manage to slap a 10% tariff on every single dollar of imports coming into the U.S., but the goal is to get as close to that as possible. In 2024, the United States imported $4.1 trillion worth of goods and services. A 10% tariff on even $2 to $3 trillion of that would generate between $200 and $300 billion in revenue.

Why does that matter? Because the 2017 Trump tax cuts are set to expire at the end of this year, and extending them will cost around $450 billion per year. Now you see the play. Impose 10% tariffs on as much as possible, and you instantly create a revenue baseline—maybe $200 billion, maybe a bit more or less. That makes the GOP’s job of finding the remaining funds easier and lowers the political pressure to raise the debt ceiling and pile on more debt.

But let’s not pretend this is a win for everyone. Those tariffs aren’t paid by foreign governments or big corporations—they’re paid by the end consumer. For every product brought into America, the importer’s cost of goods sold jumps by 10%. And guess who picks up that tab? The American buyer. This is nothing more than a consumption tax disguised as tough trade policy.

And we haven’t even started talking about the retaliatory tariffs that will inevitably follow once the U.S. locks in this 10% universal tariff. Countries will strike back with their own tariffs on American goods, making exports more expensive and less competitive. That, too, will eventually land back on U.S. consumers—fewer exports mean weaker industries at home and even higher prices on imported alternatives. In other words, it’s a little extra fuel thrown under an already simmering inflation problem.

In plain terms, it’s a +10% tax on ordinary people so billionaires can keep their tax breaks, their yachts, and their private jets. Disposable incomes will shrink, but the champagne will keep flowing at the top.