United States President Donald Trump announced a new trade agreement with the United Kingdom on May 8, 2025.

He described it as a potential model for future agreements, including those with China.

This announcement coincides with ongoing trade negotiations between the US and Beijing.

Details of the US-UK trade deal are limited.

However, the White House indicated that the UK would reduce or eliminate non-tariff barriers on American goods and expand access for US agricultural exports.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ The pendulum of U.S. trade policy swings dramatically across administrations

Trump’s 145% tariffs on Chinese goods represent one of the most aggressive protectionist moves since the Smoot-Hawley Tariff Act of 1930, which raised tariffs significantly and triggered international retaliation 1.

The current approach contrasts sharply with the post-World War II trend toward trade liberalization that began with the Reciprocal Trade Agreements Act of 1934, which allowed presidents to negotiate tariff reductions of up to 50% 2.

This historical pattern shows how U.S. trade policy often oscillates between protectionism and liberalization, with each swing creating significant global economic ripples. For example, the Smoot-Hawley tariffs contributed to U.S. imports from Europe plummeting from $1.3 billion in 1929 to just $390 million by 1932 1.

The current UK deal, with its selective tariff reductions, demonstrates how even within a protectionist framework, bilateral exceptions can be carved out for strategic allies. This practice aligns with historical U.S. trade policy, such as the Roosevelt administration’s negotiation of agreements with 19 countries between 1934-1939 2.

2️⃣ Bilateral deals signal a fundamental shift from multilateral trade frameworks

Trump’s emphasis on the UK deal as a “model” for future agreements reflects a strategic pivot away from the multilateral trade system that the U.S. itself helped establish through institutions like GATT in 1947 and later the WTO 3.

This represents a return to a more transactional, country-by-country approach to trade, reminiscent of pre-WW2 trade negotiations when bilateral agreements were the norm rather than the exception 2.

The Biden administration had maintained most Trump-era tariffs on China while working within multilateral frameworks, but Trump’s renewed emphasis on bilateral deals signals a more fundamental challenge to the post-war trade architecture 4.