Trump Announces Trade Framework With UK, Lowering Barriers

US President Donald Trump announced a trade framework with the UK, hailing it as a “breakthrough” that will bring down barriers and expand market access for American goods.

Trump on Thursday said final details of the pact would still be negotiated over the “coming weeks” and statements from both governments made clear that many specifics were left to be resolved later.

Under the agreement, Trump said the UK would fast-track American goods through their customs process and reduce barriers on “billions of dollars” of agricultural, chemical, energy and industrial exports, including beef and ethanol.

The announcement is the first Trump made since imposing high tariffs on dozens of US trading partners. The president later paused those duties temporarily in order to allow nations to reach agreements with the US.

Speaking from the Oval Office, with UK Prime Minister Keir Starmer joining by speakerphone, Trump hailed the agreement as a “tremendous trade deal for both countries.” Starmer said it was a “a really fantastic, historic day” that coincided with the anniversary of the end of World War II in Europe.

Despite the invocations of the nations long shared histories, officials from both governments will still need to hammer out many specifics, a painstaking process that leaves open the possibility the agreement could later collapse

Bloomberg's Enda Curran and Joe Mayes reports.

The pact spurred cautious optimism on Wall Street, with stocks up and bonds down amid hopes that the agreement could be a blueprint.

Trump cheered the market reaction, and predicted investors would be even more encouraged if Congress passes a law extending his tax cuts, comments that spurred the S&P 500 Index to extend gains to session highs, climbing about 1.5%.

“If that happens, on top of all of these trade deals that we’re doing, this country will hit a point — you better go out and buy stocks now,” he said.

The British deal may provide clues for the shape of potential future agreements with other economies. The terms are limited in scope and they keep in place a 10% baseline tariff that Trump imposed in April on the UK and other nations.

But the agreement lowers US duties on British steel, aluminum and automobiles in return for increased market access for key American agricultural exports. British farmers will be given a tariff-free quota for 13,000 metric tons of beef. The UK will not weaken its food standards on American imports, its government said.

UK manufacturers would be allowed to send 100,000 cars into the US under a 10% tariff instead of a 27.5% rate, according to the British government.

Commerce Secretary Howard Lutnick told reporters that engines and plane parts from Rolls-Royce Holdings PLC will be able to enter the US market without tariffs and a British airline, which he did not name, will buy $10 billion worth of Boeing Co. planes.

The two sides differed on some key details, pointing to potentially thorny negotiations ahead.

The British government released a statement saying US tariffs on steel and aluminum from the UK will go to zero, but the White House put out its own description less than an hour later saying they “will negotiate an alternative arrangement” to the metals duties and that the agreement creates “a new trading union” on the materials.

Among the important issues that still need to be worked out: how or if the UK would alter its digital services tax, which impacts some major US tech companies.

The UK is not changing its tax under the deal, according to a statement from Starmer’s government. Instead, the nations “have agreed to work on a digital trade deal that will strip back paperwork for British firms trying to export to the US.”

Talks will also continue on the pharmaceutical industry and remaining levies, the UK said. The Trump administration will give the UK “preferential treatment” in any additional sectoral tariffs Trump decides to impose, which are expected to include drugs, lumber, copper, and semiconductors, among other products.

--------

Watch Bloomberg Radio LIVE on YouTube

Weekdays 7am-6pm ET

Follow us on X

Subscribe to our Podcasts:

Bloomberg Daybreak

Bloomberg Surveillance

Bloomberg Intelligence

Balance of Power

Bloomberg Businessweek

Listen on Apple CarPlay and Android Auto with the Bloomberg Business app:

Apple CarPlay

Android Auto

Visit our YouTube channels:

Bloomberg Podcasts

Bloomberg Television

Bloomberg Originals