TLDR
- Trump will announce a “major trade deal” with a “highly respected country,” likely the UK
- This would be the first trade deal since imposing “reciprocal” tariffs in early April
- US-China trade officials are meeting in Switzerland this weekend for discussions
- Stock futures rose on the trade deal news and potential AI chip restriction relaxation
- Bitcoin approaching $100,000 milestone, up 3% to $99,300
President Donald Trump is expected to announce a trade deal with the United Kingdom today, marking the first trade agreement since his administration imposed sweeping tariffs against all trading partners in early April. The announcement was teased by Trump on Truth Social, where he mentioned a “major trade deal with representatives of a big, and highly respected, country.”
The press conference is scheduled for 10:00 am in the Oval Office. While specific details remain unclear, the UK currently faces a universal 10% tariff on its exports to the US.
This would be the first break in Trump’s trade policy since what some have called “Liberation Day” tariffs were implemented. The UK also faces the sectoral 25% levy on steel, aluminum, and autos that the administration has placed on various countries.
Market analysts are watching closely to see if this deal provides a template for future negotiations. According to Deutsche Bank macro strategist Jim Reid, “Given that full trade deals take years to negotiate, this will likely be a framework.”
Reid noted that it will be interesting to see “whether the 10% baseline tariff stays as that will provide an important template for negotiations with other countries and a good guide to the long-term tariff strategy of the US.”
Markets React Positively
Stock futures rose on Thursday following news of the potential trade agreement. Futures tracking the Dow Jones Industrial Average were up 295 points, or 0.7%.
S&P 500 futures rose 0.9%. Contracts tied to the tech-heavy Nasdaq 100 jumped 1.3%.
The three major US indexes ended Wednesday in positive territory. This came on news that US and Chinese officials will meet to discuss trade. It was also boosted by reports that Trump could relax restrictions on artificial-intelligence chips.
Bond yields increased in early trading. The yield on the benchmark 10-year US Treasury note climbed 2 basis points to 4.298%. Two-year yields rose 3 basis points to 3.816%.
Bitcoin prices moved closer to the $100,000 milestone. The cryptocurrency jumped 3% to $99,300 early in the day. The US Dollar Index was up 0.5%.
Foreign companies continue to feel the impact of the tariffs. Ford is among the latest to pull its guidance and warn of a major hit to its business due to the trade policies.
Federal Reserve Chair Jerome Powell emphasized on Wednesday that while sentiment has deteriorated, the tariff “shock hasn’t hit yet.” The central bank continued to hold interest rates steady while it awaits further data on the effects of Trump’s trade policies.
Trump has made it clear that his administration is in no rush to make deals. After meeting with Canadian Prime Minister Mark Carney on Tuesday, he stated, “We don’t have to sign deals. They have to sign deals with us.”
The President has also maintained his hard stance on China. He declared Wednesday he would not pull back tariffs on Chinese goods to bring China to the negotiating table, countering speculation that he might lower the hefty 145% tariffs.
Despite this, top US officials, including Treasury Secretary Scott Bessent and trade representative Jamieson Greer, are scheduled to meet with their Chinese counterparts in Switzerland this weekend to hold trade discussions.
Trump has suggested that tariffs on imports from China will eventually be softened, saying, “At some point, I’m going to lower them, because otherwise, you could never do business with them.”
China has reportedly compiled a list of US goods exempt from its 125% tariffs, aiming to ease trade tensions without making public concessions.
Trump has also hinted that duties on pharmaceutical imports may be announced over the next couple of weeks, potentially creating another headwind for that sector.
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