Trump boasts of ‘great’ trade deal with U.K. but key issues unresolved, global uncertainty remains

President Donald Trump pitched his trade framework with the United Kingdom as a historic achievement, and the first step in his revolutionary effort to overhaul the global economy.

But as the president began revealing specifics of the deal, it became clear it fell short of the “full and comprehensive” agreement he had promised, or the U.S.-U.K. free-trade pact he pursued during his first term.

Trump had hoped the announcement — pegged to the 80th anniversary of the Allies’ Second World War victory in Europe — would reignite confidence in his economic agenda. He carefully stage managed the ceremony, posting hints to social media and having U.K. Prime Minister Keir Starmer dial in to the phone sitting on the Resolute Desk to herald the agreement.

Under the framework agreement, the U.K. is to buy more American beef and ethanol and streamline its customs process for goods from the United States. But Trump’s baseline 10 per cent tariffs against British goods are to stay in place, and he suggested that even higher import taxes would be charged on other countries trying to reach deals with the U.S.

The framework gives the U.S. increased market access and a faster customs process for exports to the U.K., while the U.K. will see limited relief on autos, steel and aluminum duties. Many other details were left to be negotiated later.

“From the point of view of markets generally, as well as those who are concerned about the U.S. economy, this is a nothingburger,” said Tim Meyer, an international trade law professor at Duke University School of Law. “There’s nothing really to see here. Obviously this is a framework, this is not actually an agreement.”

Starmer conceded the pair needed to “finish ironing out some of the details,” but hailed the understanding as “fantastic.” Trump brushed aside questions about whether he had over hyped the agreement, instead framing it as “a great deal for both parties.”

“Every country wants to be making deals,” he added.

Facing declining poll numbers, Trump has been eager to declare a win as his tariff agenda has destabilized global markets and raised the prospects of a recession. Trump argues that his efforts are worth short-term pain because they will will increase investment in the U.S.. But he is clearly seeking to show progress and calm economic anxiety.

Trump is moving “as fast as you can go without screwing it up. We’re not screwing it up, and you’re going to see deals,” White House trade adviser Peter Navarro said on Fox Business.

The president said the public should buy into the stock market because the U.S. was about to go up like a “rocket ship,” even as he dismissed reports of fewer container ships docking in the U.S. and companies warning of price increases if the tariffs remain.

Investors responded positively on Thursday, with almost every major corner of the stock market advancing.

But the deal punted on some of U.S. businesses’ biggest concerns in the trading relationship. The U.K. will maintain its digital services tax hitting major U.S. tech firms, with only a vague promise to work toward a future digital trade agreement.

“The U.K.’s digital services tax should be further discussed and addressed to ensure it is implemented in a manner that treats American service suppliers fairly,” said Christine Bliss, president of the Coalition of Services Industries, in a statement.

The two sides also left undecided how to handle Trump’s plans for sweeping pharmaceutical tariffs. And while the U.K. removed tariffs on some U.S. agricultural products, strict regulations on food standards have remained in place.

“So far, we’ve seen little signs of euphoria in U.K. financial markets, which tells you all you need to know about how investors are viewing the deal,” said Matthew Ryan, head of market strategy at Ebury, in an emailed statement. “This is also far from a full-blown trade agreement, which will likely take months, if not years, to be finalized, and it will still be some time before the finer details are ironed out.”

The U.S. and U.K. also gave conflicting information about key elements of the agreement, which went to final-hour negotiations.

The British government released a statement saying U.S. tariffs on steel and aluminum from the U.K. will go to zero, while 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 framework creates “a new trading union” on the materials.

The announcement does offer some suggestions of what will come in future negotiations. Trump decided to broker an agreement with a country that entered negotiations in response to his initial tariff announcement, rather than retaliating.

From the point of view of markets generally, as well as those who are concerned about the U.S. economy, this is a nothingburger

Meyer predicted that future deals will likely also be limited, saying: “we will see more announcement of frameworks.”

Trump kept the 10 per cent baseline tariff on the U.K. — the same rate he applied in his April 2 rollout, a warning shot to countries hoping to get below that figure. Investors hoping for a more substantial detante may also be disappointed.

The action “sets the tone for other trading partners to promote reciprocal trade with the United States,” the White House said in a statement.

As he discussed the terms, Trump asserted that “we are using tariffs now for our benefit” and made clear that they could be higher than 10 per cent for some countries. “They made a good deal,” he said of Britain. “Many, some, will be much higher.”

Yet Trump also signalled he’s willing to negotiate on sectoral levies designed to spur on-shoring of production of items like cars, metals and pharmaceutical drugs that he has deemed as critical to national security. That could upset some of the president’s more protectionist allies.

The deal’s concession on autos — applying a lower 10 per cent rate to as many as 100,000 vehicles shipped annually from the U.K. to the U.S. — and the pledge to lower steel and aluminum levies will raise other countries’ hopes that that Trump’s sectoral tariffs may be on the table.

That set “important precedents for the coming more consequential negotiations with Europe, Japan and Korea,” Brad Setser, a senior fellow at the Council on Foreign Relations, posted on X.

The administration is now preparing for the start of talks with China — the biggest target of Trump’s tariff onslaught — and also talking with other countries who saw higher tariffs deferred until at least July. The Trump administration has touted progress with India, and held high-level talks with Japan and South Korea. Reaching a pact with China is almost certain to prove the most challenging.

Bank of England Governor Andrew Bailey said he welcomed the U.S.-U.K. agreement but said the bigger prize would be a de-escalation between Washington and Beijing.

“I hope the U.K. agreement will be the first of many,” Bailey told reporters Thursday. “Whatever transpires between the U.S. and China will be an important part of this story.”

— With additional reporting from Jennifer A. Dlouhy and the Associated Press

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