Trump announces UK trade framework, full deal remains elusive

President Trump unveiled the framework trade agreement with the United Kingdom on Thursday, describing it as a milestone in his mission to reshape the global economy. The announcement ceremony was meticulously orchestrated, featuring British Prime Minister Keir Starmer, who joined via phone call with the White House during the event organized on the 80th anniversary of the Allied victory in World War II.

Contrary to earlier announcements, the agreement is not the "full and comprehensive" deal that Trump promised, nor is it the free trade agreement he sought during his first term, according to Bloomberg. The framework agreement provides the United States with increased market access and a faster customs process for exports to the United Kingdom, while the United Kingdom obtained limited tariff relief on cars, steel, and aluminum.

From the point of view of markets generally, as well as those who are concerned about the US economy, this is a nothingburger, stated Tim Meyer, a professor of international trade law at Duke University School of Law.

He added, "There’s nothing really to see here. Obviously this is a framework, this is not actually an agreement."

Prime Minister Starmer acknowledged that both sides need to "finish ironing out some of the details," but called the agreement "fantastic." Trump, on the other hand, downplayed questions about whether he was overly praising the deal, presenting it as a "great deal for both parties" and adding that "every country wants to be making deals."

The agreement overlooks some of the biggest concerns of American companies regarding trade relations. The United Kingdom will retain its digital services tax, which affects major American tech companies, with only a vague promise to work on a future digital trade agreement. Christine Bliss, president of the Coalition of Services Industries, stated in a statement that "The UK’s digital services tax should be further discussed and addressed to ensure it is implemented in a manner that treats American service suppliers fairly."

Both parties also left unresolved the issue of Trump's plans to impose broad tariffs on pharmaceutical products. Although the United Kingdom lifted tariffs on certain American agricultural products, strict food standards regulations remained in place.

"So far, we’ve seen little signs of euphoria in UK 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. "This is also far from a full-blown trade agreement, which will likely take months, if not years, to be finalised, and it will still be some time before the finer details are ironed out."

The United States and the United Kingdom also presented conflicting information regarding key elements of the agreement. The British government issued a statement that U.S. tariffs on steel and aluminum from the United Kingdom will be lifted, while the White House published its description less than an hour later, stating the parties "will negotiate an alternative arrangement" for metal tariffs.

Despite these uncertainties, investors reacted positively, and almost all major segments of the stock market recorded gains. Trump maintained a 10% base tariff rate for the United Kingdom—the same as in his initial announcement on April 2, which serves as a warning for countries hoping to lower this number.

The White House stated in a declaration that this action "sets the tone for other trading partners to promote reciprocal trade with the United States." Discussing the terms, Trump emphasized that "we are using tariffs now for our benefit" and made it clear that for some countries, they may be higher than 10 percent. "They made a good deal," he said about the British. "Many, some, will be much higher."