President Donald Trump announced a major trade deal with the United Kingdom, calling it the “FIRST of MANY!!!” in a social media post. The announcement, which is set to be formally revealed in the Oval Office, caused financial markets to rise sharply, with Dow futures showing a significant increase.
Despite Trump’s enthusiastic statements, the deal seems much less impactful than he has suggested. While Trump described the agreement as “full and comprehensive,” sources in both the US and UK governments told CNN and NPR it has a narrow focus and depends heavily on promises for the future.
Despite this, Trump posted, “Big News Conference tomorrow morning at 10:00 A.M., The Oval Office, concerning a MAJOR TRADE DEAL WITH REPRESENTATIVES OF A BIG, AND HIGHLY RESPECTED, COUNTRY. THE FIRST OF MANY!!!” on Truth Social.
Trump gets UK to sign deal, but how big is it?
The existing 10% tariff that Trump placed on nearly all imported goods remains unchanged. Similarly, the high tariffs on cars and steel have already hurt UK exports and will only see a small reduction. This contradicts Trump’s earlier claims, meaning the deal is unlikely to bring a major economic benefit to either country right away.
The agreement is essentially a preliminary document that outlines the general framework for a future deal, rather than a fully detailed trade pact. More negotiations will be needed to work out the specifics. The limited nature of the deal surprised some UK officials, who had seen recent talks as productive but not close to reaching a full agreement.
The UK has been eager for a broad deal, especially one that improves market access and lowers tariffs in important industries. In exchange for some tariff reductions, the UK has offered to ease taxes on large US tech companies related to digital services.
The announcement comes at a time of widespread economic and geopolitical uncertainty. Trump’s 10% tariff on most imports, along with even higher tariffs on certain goods like cars and steel (set at 25%), has already caused major economic disruptions. These problems have been made worse by extremely high tariffs on Chinese goods. A temporary 90-day hold on some of these country-specific tariffs, put in place in April after markets dropped sharply, has added to the confusion.
Trump has said he will not extend this pause, meaning tariffs could be reinstated or adjusted within weeks for countries that do not reach agreements. With so many countries involved, finalizing multiple deals in such a short time will be very difficult.
Despite the UK deal being limited, it could serve as a model for similar agreements with other nations. The US administration is currently in trade talks with several countries, including India, South Korea, and Japan. Additionally, upcoming US-China trade discussions scheduled for Geneva this weekend could be a key chance to reduce tensions between the two economic powers, though Trump has said he will not reduce existing tariffs on Chinese goods before the talks.
Treasury Secretary Scott Bessent called the meetings an important step toward easing tensions, but the actual results are still unclear. Given Trump’s past actions, such as suddenly abandoning the USMCA trade deal, his trade policies could change without much warning. In short, the current situation is unstable, balancing between the possibility of reduced trade tensions and the ongoing risk of further economic turmoil caused by unpredictable trade policies.
Published: May 8, 2025 11:25 am