Trump Announces 'Breakthrough' Trade Deal With the U.K.

What Happened?

President Donald Trump announced on Thursday that his administration has struck a ‘breakthrough’ deal to reduce trade levies with the United Kingdom.

The announcement, made during a news conference in the Oval Office, marks the first bilateral agreement unveiled since Trump imposed sweeping tariffs.

Trump told reporters the deal significantly expands access for U.S. agricultural products, creating a $5 billion opportunity for U.S. farmers, ranchers, and producers.

The deal includes more than $700 million in ethanol exports and $250 million in other agricultural products, like beef, according to a White House fact sheet.

It will also cut tariffs on the first 100,000 U.K. vehicles imported into the U.S. annually by U.K. car manufacturers to 10%.

Current 25% tariffs imposed globally on steel and aluminum imports could effectively be modified by creating a new trading union with the U.K.

The 10% baseline tariff originally announced on 'Liberation Day' will remain in effect.

Why it Matters

Following his 'breakthrough' announcement, Trump did not spare his criticism of Federal Reserve Chair Jerome Powell over the lack of interest rate cuts.

When asked if he’d ever call a meeting with Powell, Trump responded, 'I could call him for a meeting, but it’s like talking to a wall.'

The Fed kept its benchmark interest rate unchanged on Wednesday following its latest decision that pointed to the increased 'uncertainty about the economic outlook.'

May's meeting marked what experts call an unusual period amid Trump's latest moves that have shaped global markets.

Powell addressed tariff-related concerns surrounding the Trump administration as the ones who hold the tools to resolve this issue.

The Dow Jones gained over 500 points on Thursday following Trump's trade announcement with the U.K.

He expects U.S. negotiators to have a 'good weekend' with China during opening trade discussions.

It's a potential sign that China and the U.S. could soon reach an agreement to de-escalate their ongoing trade war and restore confidence to global markets.

How it Affects You

Trump looks to reverse the negative trends that have heavily impacted the U.S. economy.

Although Trump acknowledged his sweeping tariffs have imposed economic risk, he opposed rushing deals to appease nervous investors.

The U.S. and China still hold high trade levies that many fear could spike a 2025 recession.

The U.K. deal is one of many that Trump aims to get done to restore U.S. consumer confidence to high-functioning standards.

Those standards could be just what the Federal Reserve needs to decide on further interest rate cuts that have long been awaited.