US, UK announce trade deal but 10 per cent duties stay

US President Donald Trump and UK Prime Minister Keir Starmer have announced a limited bilateral trade deal that leaves in place Trump's 10 per cent tariffs on UK exports, modestly expands agricultural access for both countries and lowers prohibitive US duties on UK car exports.

The preliminary agreement is the first of dozens of tariff-lowering deals that Trump is trying to land in coming weeks after blitzing the global economy with steep new import taxes in a bid to reshape global trade in US favour and shrink a $US1.2 trillion ($A1.9 trillion) US goods trade deficit.

Trump called the UK deal a template for other negotiations, saying that the United Kingdom "made a good deal" and that many other trading partners may end up with much higher final tariffs because of their large US trade surpluses.

In April, Trump imposed reciprocal duties of up to 50 per cent on goods from 57 trading partners including the European Union, pausing them days later to allow time for negotiations.

At the same time, he heaped new 25 per cent tariffs on car imports and ended all exemptions on steel and aluminium duties, announcing new tariff probes on pharmaceuticals, copper, lumber and semiconductors.

At a White House press conference with Starmer patched in on a speaker phone, the two leaders heralded the plan as a "breakthrough deal" that lowers average UK tariffs on US goods to 1.8 per cent from 5.1 per cent.

"It opens up a tremendous market for us," Trump said.

"This is a really fantastic, historic day," Starmer said by teleconference.

"This is going to boost trade between and across our countries, it's going to not only protect jobs but create jobs, opening market access."

The United States has been under pressure from investors to strike deals to de-escalate its tariff war after Trump's often chaotic policymaking upended global trade with friends and foe alike, threatening to stoke inflation and start a recession.

His biggest challenge, however, is resolving a virtual trade embargo between the US and China, with tariffs of 145 per cent and 125 per cent, respectively on each side.

US and Chinese officials are due to hold talks in Switzerland on Saturday.

Trump said these talks would be substantive - more than an ice-breaker -and that he knows that those tariff levels will be "coming down".

UK ambassador to the US Peter Mandelson said the deal was only a first step in efforts by the two countries to reduce tariffs and trade barriers, adding: "It's not a still picture here. It's a movie. It continues."

The deal will reduce US tariffs on UK car imports to 10 per cent from the current 27.5 per cent according to a UK statement.

The lower rate will apply to a quota of 100,000 UK vehicles, almost the total exported to the US last year.

US tariffs on imports from the struggling UK steel industry will fall to zero from 25 per cent while UK tariffs on US ethanol will fall to zero from 19 per cent.

Both sides have agreed to new reciprocal market access on beef, with UK farmers given a tariff-free quota for 13,000 metric tonnes.

UK beef farmers join a group of select countries such as Australia which have a similar arrangement.

There will be no weakening of UK food standards on imports.

Crucially there will be no weakening of UK food standards on US beef imports, which was an election manifesto pledge for the Labour government.

That means US beef bred with growth hormones still will not be allowed in.

US Agriculture Secretary Brooke Rollins said the deal would "exponentially increase" US beef exports to the UK.

But much depends on whether US beef could compete with the local beef on price and find favour with British consumers.

Currently 100 per cent of the fresh beef sold by the UK's two biggest supermarket chains Tesco and Sainsbury's is British and Irish.

Commerce Secretary Howard Lutnick said that the deal would create $5 billion in potential new annual export opportunities for American producers, while the new tariffs that stay in place would generate $6 billion in annual US revenue.

The US agreed to give the UK preferential treatment in any further tariffs imposed under Section 232 national security investigations, which include ongoing probes of pharmaceutical and semiconductor imports.

Initial news of an announcement sent shares in luxury car maker Aston Martin up 10 per cent while UK retailers with operations in the US, including JD Sports and Primark owner AB Foods, also rose.