Trump Says The U.S. Doesn’t Need A Trade Deal But The U.K. And India Just Made One Without It!
In a world where global trade dynamics have been anything but stable, the United Kingdom and India just signed a landmark bilateral free trade deal and they did it without waiting for Washington’s blessing. As the U.S. doubles down on protectionism under President Donald Trump’s renewed directions, other nations are choosing to build bridges elsewhere.
On Tuesday, in what is being hailed as a “historic milestone,” the U.K. and India finalized a comprehensive trade deal that will gradually eliminate tariffs on a vast majority of goods traded between the two countries.
U.K. Prime Minister Kier Starmer, in his first major international economic move since assuming office, called the deal a cornerstone of his “Plan for Change,” promising that it will “grow the economy and deliver for British people and business.”
The details of the agreement reflect a deep and deliberate commitment to bolstering long-term economic cooperation. Tariffs on iconic U.K. exports like whisky and gin, which currently stand at a hefty 150%, will be slashed to 75% and eventually phased down to 40% within a decade. Automotive tariffs, some of which exceed 100%, will be reduced to just 10%. On the flip side, India will enjoy duty-free access on nearly all of its exports to the U.K. with 99.1% of items set to be tariff-free immediately once the agreement is enacted.
The British government estimates that the deal will increase bilateral trade by £25.5 billion ($34 billion), adding significant momentum to the existing £42.6 billion trade flow between the two nations as of 2024 — an increase of 8.3% over the previous year. Despite this progress, the U.K. currently runs a trade deficit of £8.4 billion with India, a gap this deal may help to rebalance over time.
Indian Prime Minister Narendra Modi celebrated the agreement as a “deepening” of the Comprehensive Strategic Partnership between the two countries.
Posting on X (formerly Twitter), he stated that the deal would catalyze “trade, investment, growth, job creation, and innovation in both our economies.” The agreement also includes a unique provision: a “double contribution convention” under which Indian workers temporarily posted to the U.K. will be exempt from national insurance payments for up to three years. This aligns with similar accords the U.K. has signed with South Korea, Japan, and Chile, and is a nod to the growing mobility of the skilled Indian workforce.
A Trade Deal Win Without Washington
The significance of the U.K.-India deal is amplified by its geopolitical context. It arrives amid heightened global trade tensions – tensions many trace back to the United States and its increasingly inward-looking policies under Donald Trump. The president, who is now back in the spotlight and wielding substantial influence over U.S. economic discourse, has made it clear that he views trade deals not as mutually beneficial arrangements but as strategic leverage.
“We don’t have to sign deals, they have to sign deals with us,” Trump proclaimed during a meeting with newly elected Canadian Prime Minister Mark Carney at the White House. “They want a piece of our market. We don’t want a piece of their market.” His statement directly contradicted the recent tone struck by U.S. Treasury Secretary Scott Bessent, who earlier stated that the U.S. was “very close to some deals,” implying a return to trade diplomacy.
Markets responded swiftly and predictably to Trump’s remarks with a dip that reflected investor anxiety over the return of transactional, zero-sum trade policy from the United States.
A Shift in Global Trade Routes
The India-U.K. agreement is just one of several recent moves signaling a reordering of the global trade map. ASEAN nations and China are set to meet on May 19 to renegotiate and enhance their current free trade arrangement, according to Malaysian Prime Minister Anwar Ibrahim. These talks aim to strengthen intra-Asian trade flows and could potentially expand China’s influence across Southeast Asia at a time when the U.S. is taking a backseat.
“The timing couldn’t be better,” said Keshav R. Murugesh, CEO of WNS and chairman of the Confederation of Indian Industry UK Business Forum. “The FTA enhances the economic resilience of both the U.K. and India by providing access to new markets and reducing vulnerability to external shocks. This is particularly important in a world where trade tensions are on the rise.”
Where Does That Leave the United States?
For now, the U.S. appears to be both everywhere and nowhere in global trade. While Treasury Secretary Bessent is preparing for crucial trade talks with Chinese Vice Premier He Lifeng in Switzerland, Trump’s comments are casting a long shadow. The contradiction between administration officials and Trump himself reflects an internal dissonance that weakens America’s negotiating posture and confuses allies.
In an interconnected world increasingly defined by complex supply chains and strategic partnerships, the refusal to engage or the insistence on dominance rather than cooperation could lead to long-term consequences.
Bilateral deals like the one between India and the U.K. demonstrate that economic power is shifting, and that countries are willing, even eager, to build a new global trade framework that doesn’t necessarily include the U.S.
The world is moving on. And in a global marketplace that thrives on certainty, collaboration, and open channels, Washington’s unpredictability may be its own worst enemy.
