President Trump of the United States announced a trade agreement between the US and the UK, suggested imposing high tariffs on imported semiconductors, and criticized the policies of his predecessors.

On May 8, 2025, President Trump of the United States announced at the White House that he had reached a historic trade agreement with the United Kingdom, covering industries like automobiles, steel and aluminum, agriculture, and aerospace. This marks the first major trade agreement of Trump's second term. Trump criticized the former president for allowing chip production to be outsourced to Taiwan and hinted at possibly imposing tariffs ranging from 50% to 100% on imported chips. He emphasized that the U.S. is drawing major chip companies back, investing billions of dollars, and maintaining a strong tariff policy against other countries.

US and UK Reach Historic Trade Agreement

President Trump and UK Prime Minister Keir Starmer jointly announced on May 8 that both parties have completed a 25-year trade agreement. According to the agreement details released by the White House, the UK will significantly reduce tariffs and non-tariff barriers on American goods and expand market access for US beef, ethanol, agricultural products, machinery, and aerospace products. The US, in turn, agreed to lower import tariffs on UK cars from the original 27.5% to 10%, applicable to up to 100,000 vehicles per year.

Additionally, the UK will purchase $10 billion worth of Boeing airplanes, while the US will provide tariff-free treatment for Rolls-Royce aircraft engines and components exported from the UK. Both parties also agreed to form a new trade partnership in the steel and aluminum sectors and to collaborate on pharmaceuticals, technology, and national security supply chains.

Trump stated at the press conference: "This is a thorough and all-encompassing agreement that will solidify the US-UK relationship for many years to come. This is the first in a series of trade agreements we will announce."

Trump Criticizes Former Presidents for Offshoring the Chip Industry

While announcing the agreement, Trump also commented on the current state of the US semiconductor industry. He noted that the US once held a monopoly in chip manufacturing, dominating the global market alongside companies like Intel. However, due to poor decisions by past presidents, the industry was offshored, and most chip production eventually moved to Taiwan.

Trump said, "We once monopolized the chip market, and everything was made in America. But several presidents didn't know what they were doing, and the industry was stolen away."

He further stated that if the US government had imposed high tariffs on foreign-made chips at the time, the situation would have been different. "If we could have said back then, 'Okay, if you want to move production back to Taiwan, that's fine, but if you want to sell those chips back to the US, we would have imposed a 50% or 100% tariff,' those companies would never have left the US."

Hints at High Tariffs on Imported Chips

Trump's remarks have been interpreted as a preview of the upcoming semiconductor tariff policy. According to an announcement from the US Department of Commerce, the public comment period for the trade investigation on imported semiconductors ended on May 7, and the Trump administration will decide whether to impose new tariffs on imported chips based on the investigation results.

While Trump did not explicitly announce the tariff rates at the press conference, he repeatedly mentioned figures of "50% or 100%," indicating a preference for high tariff policies. He emphasized, "We are using tariffs to benefit America, and we have now reached nearly $10 trillion in investment, an unprecedented achievement."

Emphasizing the Return and Investment of the US Chip Industry

Trump also pointed out that although the US once lost its dominance in the chip industry, several large chip companies have now announced their return to the US and are making significant investments. He stated, "These companies are coming back now, albeit 40 years late. Today, the world's largest chip manufacturers are investing in the US, with one investing $300 billion, another $500 billion, and another $200 billion."

He added that these investments will allow the US to regain a "very substantial share" in the global chip market and emphasized that this is one of the results of his administration's push for reindustrialization and economic security policies.

Maintaining a Tough Stance on Tariff Policies with Other Countries

In addition to his remarks on the chip industry, Trump reiterated his tough stance on other trade partners. He stated that for countries that have not yet reached an agreement with the US, a 25% tariff will remain in effect until negotiations are completed. He noted, "Our Treasury Secretary and Commerce Secretary are dividing up the countries they are responsible for, and as soon as the press conference ends, they will return to the negotiating table."

Trump also mentioned trade negotiations with China, emphasizing that lowering tariffs will not be a precondition for negotiations. He said, "We will not offer tariff reductions as leverage to bring Beijing back to the negotiating table."

References

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