Update (1215ET): 

Summary… 

President Trump unveiled a U.S.-U.K. trade framework he called a “breakthrough,” designed to lower trade barriers and expand market access for American exports, especially in agriculture, energy, and industrial goods. While the full details remain under negotiation, the deal promises expedited customs clearance for U.S. products entering the U.K. and retains the existing 10% universal tariff rate, with carveouts for steel, aluminum, and automobiles (reduced to zero).

“It’s very conclusive and we think everyone’s going to be happy,” President Trump told reporters, adding, “Many countries want to make a deal, and many countries are very unhappy that we happened to choose this one.” 

Trump continued: “The deal includes billions of dollars of increased market access for American exports, especially in agriculture, dramatically increasing access for American beef, ethanol and virtually all of the products produced by our great farmers.” 

U.K. Prime Minister Keir Starmer told reporters via phone that the trade deal is job-protecting and job-creating. U.K. automakers can export 100,000 vehicles to the U.S. at a 10% tariff—down from the previous 25%. Additionally, Rolls-Royce parts will enter tariff-free. A news headline is expected later this afternoon from a major British airline that has committed to a $10 billion Boeing purchase. 

“This is going to boost trade between and across our countries,” Starmer said. 

Both Trump and Starmer pointed out that today is the 80th anniversary of the two countries celebrating the victory of World War II. 

After Trump, Commerce Secretary Howard Lutnick told reporters: “We’ve opened up new market access—ethanol, beef, machinery, all the agricultural products they’ve agreed to open their markets and that will add $5 billion of opportunity to American exporters.”

Here is UBS’ first take on the major trade announcement:  

President Trump has announced a trade agreement with the U.K., the first to be struck between the U.S. and a foreign country since tariffs were announced. Trump says the deal with the U.K. includes billions of dollars of increased market access for U.S. exports, most notably in agriculture.

The summary of the trade announcement via Bloomberg’s Top Live Blog: 

• Trump announces trade framework with U.K. that lowers barriers

• U.K. agrees to $10 billion Boeing procurement, Trump says

• U.K. tariffs on British steel and aluminum cut to zero,

• U.K. says China tariffs could be lowered if talks go well: Trump

In markets, the U.S. main equities jumped, with the S&P 500 up as much as 1.4%. The VIX sank to the 21-handle as Trump told reporters, “Better go by stocks now.” 

More market commentary from Bloomberg:

The S&P 500 is now up 1.4%. This isn’t the first time we’ve seen an advance in equities in the wake of a Trump call to buy. Remember on April 9, the president said “THIS IS A GREAT TIME TO BUY,” in a social media post. That came hours before he put a 90-day pause on “reciprocal” tariffs for everyone except China. Equities have basically not looked back since that pause – the S&P 500 is up almost 15% since April 8.

Looking ahead, U.S. Treasury Secretary Scott Bessent and his Chinese counterpart will begin the first round of trade talks in Switzerland on Saturday. 

Expect a lot more trade headlines over the weekend. 

Btw, BTC/USD > 100K. 

Rewatch Trump’s trade deal announcement. The streaming of the event was filmed by Right Side Broadcasting Network. 

 

*   *   *

Update (1255ET): 

Trump announced in the Oval Office that the U.S. and the U.K. have finalized a “great deal” on trade.

Highlights of Trump’s announcement (courtesy of Bloomberg):

• Trump says the UK will reduce or eliminate numerous non tariff barriers that discriminated against American products

• “Today’s agreement with the UK is the first in a series of agreements on trade,” Trump says

• “The final details are being written up. In the coming weeks we’ll have it very conclusive,” Trump says

• Tade deal will lead to the creation of an aluminum and steel trading zone, and a secure pharmaceutical supply chain, Trump says

Commerce Secretary Howard Lutnick spoke after Trump:

• Our 10% tariffs on the UK will stay on 

• Says the UK will purchase $10 billion in Boeing planes

Additional headlines from Bloomberg:

• From the UK trade deal, the U.S. will raise $6 billion in external revenue from 10% tariffs, $5 billion in new export opportunities

The UK government responds:

• US tariffs on automotives were immediately slashed from 27.5%, with steel and aluminium reduced to zero

• US trade deal gives unprecedented market access for British farmers with protections on food standards maintained

• We will also remove the tariff on ethanol coming into the UK from the us, down to zero

• We have agreed new reciprocal market access on beef, with UK farmers given a tariff free quota for 13,000 metric tonnes

Make it bigger…

.@POTUS: “I think that it’s a great deal for both parties… it opens up a tremendous market for us… this is a maxed out deal that we’re going to make bigger.” pic.twitter.com/6zRAwZrevy

— Rapid Response 47 (@RapidResponse47) May 8, 2025

 

*   *   *

Update (0859ET)

Ahead of the Trump administration’s big unveiling of a U.S.-U.K. trade deal, new reporting from CNN offers a more precise picture of what to expect. Citing sources familiar with the trade deal, the report suggests the agreement will be narrow in scope, packed with forward-looking commitments, and will not roll back existing 10% universal tariffs. 

Meanwhile, the Financial Times adds that the deal’s key focus areas will likely include automobiles and steel—two sectors at the center of trade tensions. 

US main equity indices slid a bit after the headlines hit, but overnight gains have largely been maintained amid elevated trade optimism from President Trump’s series of Truth Social posts. 

The official announcement is expected around 1000 A.M. ET.

 

*   *   *

Yet another signal that the trade war has hit its peak came overnight, as President Trump took to Truth Social to tease a “big news conference” Thursday morning, where he plans to unveil a “major deal.” As U.S. markets began coming online, Trump continued promoting what he called “a very big and exciting day” for U.S.-U.K. trade. 

Late Thursday night, the president wrote on Truth Social:

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!!!

Around 0542 ET, he posted again:

This should be a very big and exciting day for the United States of America and the United Kingdom. Press Conference at The Oval Office, 10 A.M. Thank you!

Trump continued in a separate post around 0608 ET:

The agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come. Because of our long time history and allegiance together, it is a great honor to have the United Kingdom as our FIRST announcement. Many other deals, which are in serious stages of negotiation, to follow!

Then followed by: 

“The Golden Age of America is coming!” 

A resolution to the US-UK trade spat would be the Trump administration’s first step in renegotiating trade worldwide. 

Last month, the U.S. imposed a 10% tariff on most imported goods from the UK as part of the baseline tariff it imposed on all nations. On March 12, the administration also imposed a 25% tariff on all steel and aluminum imports.

UK officials would most likely want to see the 25% tariffs on steel and aluminum completely removed. If this is part of the upcoming trade deal, the UK could then give concessions on a digital tax it levies on Silicon Valley tech giants.

Trump’s series of Truth Social posts provided fresh tailwinds for equity markets overnight in Europe. 

Goldman analyst Jasmin Schneider told clients:

Europe trading firmly in the green this morning (SXXP +70bps, SX5E +1.3%) on progress surrounding US-UK trade talks and some solid earnings on the tape. The big focus overnight on trade talks between the U.S. and UK: *TRUMP: TRADE DEAL ANNOUNCEMENT `THE FIRST OF MANY’. Trump is expected to announce a limited trade agreement with the UK later today (UKX +30bps), which may signal the direction of the U.S. president’s global trade war. Our EU Tariffs Exposed basket (GSXETRFS +1.2%) and UK Consumption names (GSXEUKCO +1.7%) trading well with the deal likely to focus on reducing tariffs on cars and steel, and may include discussions on tech, AI, and digital trade (BBG).

Across the Atlantic, equity futures are also higher, with hopes that the US-UK trade deal will be the first of many resolutions. 

Goldman analyst Rich Privorotsky’s take on the developing trade situation:

Will be watching to see what the shape of the UK deal looks like as it could serve as a global template. Into the weekend the market should grow hopeful for a temperature reduction in the China/U.S. escalation. Although I’m a long term bearish  on U.S./China trade relations, I’m of the opinion that U.S. corporates have a degree of urgency in reducing the 100%+ tariffs imposed (can’t replace supply quickly). Think the landing zone is something back to the 30-50% mark and that will be the travel and arrive event.

Looking ahead, U.S. Treasury Secretary Scott Bessent and his Chinese counterpart will discuss the framework for a trade deal on Saturday in Switzerland.

“The negotiations will begin on Saturday,” Bessent said in testimony before the House Financial Services Committee on Wednesday.

Goldman offered some good news last week: Peak trade war.

Goldman chief economist Jan Hatzius noted earlier this week: “The mood music with China has improved, and we expect the U.S. tariff rate on China to drop from around 160% to around 60% relatively soon. (China is likely to reduce tariffs on the U.S. by a similar amount.)”

Earlier this week, attendees at the Milken Institute Global Conference in Beverly Hills warmed up to Trump’s trade war but wanted to see near-term trade deals. KKR co-founder George Roberts told the audience: “Stay calm and carry on.”