Trump announces his first trade deal with the UK. Here's what's in it.
President Trump announced his first deal since launching a global trade war Thursday, unveiling a limited pact with the United Kingdom that would lower barriers on some goods like automobiles and agriculture while leaving many unanswered questions.
It's a "tremendous trade deal for both countries," Trump said Thursday in the Oval Office. "This is a fantastic, historic day," added UK Prime Minister Keir Starmer who joined the event over the phone.
"The final details are being written up" and will be concluded in the coming weeks, Trump added.
One key change not in the offing is any adjustment to the 10% baseline tariffs that Trump imposed on nearly every country in the world. Those are set to stay in place in this deal.
The core of the targeted deal is essentially a trade where the UK will get a lowering of duties on key sectors such as steel — US duties there on UK-made steel will drop from 25% to 0%. Car export tariffs are also set be reduced from 27.5% to 10%, according to a release from the UK.
Trump and his aides also summarizing the pact as allowing the UK to send 100,000 cars to the US with only a 10% tariff.
"We started at 10% and we ended at 10%," noted Commerce Secretary Howard Lutnick during the event.
Yet the unanswered questions were abundant. In one example, Trump focused heavily on US beef exports in his opening remarks but then seemed to indicated that the UK wouldn't be changing the beef standards that have been a far bigger hangup to trade than other issues like tariffs.
"I think they'll take what they want," Trump said of beef exports.
In return, Prime Minister Starmer is offering unspecified so far concessions on so-called digital service taxes that hit US tech companies as well as promises to open the UK markets more to things like US autos, ethanol, machinery, and agricultural products.
The deal also includes provisions, Trump said, around the fast tracking of exports as well as new economic security measure tied to national security. Secretary Lutnick added it is also set to include new purchases of airport engines by Boeing.
The digital elements of the pact came in for immediate praise with Tony Gulotta, a principal and business tax firm Ryan, touting the concessions on the UK's Digital Services Tax by saying 'this represents a win-win for both countries — removing a significant burden for American tech companies operating in the UK market while strengthening the overall trade relationship."
The announcement was also enough to push US stocks higher on Thursday as investors turned optimistic that Trump's trade war may be easing.
Read more: What Trump's tariffs mean for the economy and your wallet
But others were more cautious about the import of the announcement.
'I think it is going to be underwhelming as an opening salvo' predicted Henrietta Treyz of Veda Partners during a Yahoo Finance Live appearance.
She noted it was good for groups like UK auto makers but said 'there are much bigger pieces of this pie,' pointing to still outstanding deals on partners like South Korea, Japan, Canada, Mexico and India where deals there could be weeks or months away.
Overall, the UK has been spared the most intensive actions from Trump. A recent Yale Budget Lab report found that the UK economy is likely to be 0.2% bigger in the long run as a result of tariffs imposed so far while other nations like Canada and China are set to take a hit and turn negative.
Today's announcement could be the second trade win for Starmer after he inked a new trade agreement with India earlier this week.
Other reaction to the announcement from some in the financial community was skepticism about how far-reaching any agreement might be.
Dan Ives of Wedbush called the announcement "a baby step start of getting some deals/framework on the table," adding that 'the reality is that the market and especially tech investors will view this announcement as a yawner ... with the laser focus being China negotiations, India, and Vietnam.'
Terry Haines of Pangaea Policy added that, for markets, "the existence of today's deal matters more than any detail, because it confirms for jittery and impatient markets fundamental things" most importantly that Trump will move forward on deals.
Indeed, markets will have another round of trade talks to watch this weekend when two top Trump aides travel to Switzerland to begin those talks with China.
Trump also looked ahead to this weekend's China talks predicting "I think we will have a very good weekend" and offered optimism that progress would be possible there in the days ahead and of tariffs if those talks go well "you can't get any higher so you know it's coming down."
Ben Werschkul is a Washington correspondent for Yahoo Finance.
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