Trump's 'Earth-Shattering' US-UK Trade Deal Unveiled
US and UK finalize the 'Earth-Shattering' trade deal, cutting tariffs and boosting ties. Learn how it affects stock markets and sectors like steel and autos.
Washington and London have finalized a trade agreement, the first major deal since President Donald Trump paused broad tariffs in April. Announced on May 8, 2025, the pact lowers tariffs on key goods, aiming to deepen economic ties between the United States and United Kingdom.
The agreement focuses on sectors like steel, autos, and agriculture. The UK secures reduced tariffs on its car and steel exports, vital for its manufacturing base. In exchange, the US gains better access for its food and agricultural products, though UK standards still block items like chlorine-washed chicken.
Stock markets showed mixed reactions. The FTSE 100 slipped 0.4% on May 7, with losses in healthcare and real estate overshadowing trade optimism. US markets had varied responses, as analysts noted the deal’s narrow scope, given the US trade surplus with the UK.
Prime Minister Keir Starmer called the deal a victory for British exporters, crediting his diplomatic efforts. Unlike the EU, the UK avoided retaliatory tariffs, gaining leverage in talks. The agreement could guide future US deals with countries like Japan and India.
Some investors remain unimpressed. Social media posts labeled the deal underwhelming, citing minimal concessions and ongoing 10% tariffs on UK goods. Economists see long-term potential but caution that immediate market gains may be modest.
The deal aligns with global trade shifts. The UK recently inked a trade pact with India, boosting its whisky and car exports, while the US and China plan discussions to reduce tensions. These moves reflect a race to secure bilateral agreements before tariff deadlines.
While the US-UK deal signals stronger ties, it has not ignited the market surge some expected. Investors are watching for more details and broader trade policies to assess its full impact.
