US-UK trade agreement announced: Trump at the White House calls out "Buy stocks now"

Source: Techub Info

Today we focus on a hot news story sweeping the globe — the United States and the United Kingdom have reached a highly anticipated framework for a trade agreement. This not only marks a new level in the economic and trade relations between the two countries but also ignites the market's investment enthusiasm.

U.S. President Donald Trump said in a high-profile manner at the White House: "You'd better buy stocks now!" He noted that congressional bills and trade deals will propel the U.S. economy "to a critical juncture" and that it is an urgent moment to invest. Buoyed by this, the S&P 500 (SPY) extended gains, rising 1.4% at one point to close at $565.06, up about 0.7% from the previous day's close of $561.15. However, Trump also took the opportunity to criticize Fed Chairman Jerome Powell, calling him a "big late Powell" and complaining that "interest rates are being cut all over the world, and only he is dragging his feet".

In addition, his strong remarks regarding Mattel have attracted attention, warning that if Mattel relocates production, it will face a 100% tariff, causing Mattel's stock price to plummet by 5.3% at one point. Trump also revealed that the United States is procuring a brand new air traffic control system to pave the way for infrastructure upgrades. Below, we provide an in-depth analysis of the background and market impact of the UK-US agreement.

The US and UK Reach Trade Framework, Trump Announces It Grandly

On the evening of May 8, Beijing time, U.S. President Trump announced the preliminary framework of the trade agreement with the United Kingdom in the Oval Office of the White House.

He stated that this agreement will significantly expand the market access for American products, especially in the agricultural sector. American beef, ethanol, and "almost all the products produced by our great farmers" will have broader export opportunities. Trump emphasized that the UK will reduce or eliminate a number of non-tariff barriers and simplify the customs clearance process for American products, ensuring that export approvals are "very, very fast, without cumbersome procedures."

In addition, the agreement opens new markets for American chemicals, machinery, and other industrial products. Trump stated that the UK will be included in a framework consistent with the US economic security system, and the details of the agreement will be finalized in the coming weeks. He also posted on the Truth Social platform, saying: "This is a comprehensive and complete agreement that will solidify US-UK relations and lay the foundation for many years to come. It is a tremendous honor to have the UK as the first announced partner! More agreements are under negotiation, stay tuned!"

UK Prime Minister Starmer participated in the event via remote connection, stating: "We have built an exciting platform for future cooperation." Starmer referred to this agreement as a "true tribute" to the long history of cooperation between the UK and the US.

Background of the Agreement: From Tariff Disputes to Win-Win Cooperation

In April of this year, Trump announced a 10% "reciprocal tariff" on almost all countries worldwide, with the UK facing a 10% baseline tariff and 25% tariffs on steel and automobiles. Following market turbulence and criticism of this policy, Trump quickly adjusted his strategy, introducing a 90-day "tariff suspension period," during which a uniform 10% tariff would be levied on the affected countries. The UK-US agreement is seen as the first major achievement after this shift in policy.

Trump stated that the agreement brings the UK under the "security umbrella" of the United States, providing significant economic benefits to both countries. U.S. Secretary of Commerce Ross further revealed that the agreement will open new markets for American ethanol, beef, and other products, expected to generate billions of dollars in profits for exporters while supporting thousands of jobs in the steel and aluminum industries of both countries. He also mentioned that a UK airline will purchase Boeing aircraft worth $10 billion, and the U.S. has agreed to waive tariffs on Rolls-Royce jet engines and parts.

Market Enthusiastic Response: US Stocks Surge

After the agreement was announced, the market quickly reacted. The three major U.S. stock indices showed a slight upward trend as Trump elaborated on the details of the agreement. Subsequently, when reporters asked about U.S.-China trade relations, Trump expressed an optimistic attitude and urged investors to "buy stocks now," stating that if the trade agreement and tax reduction measures were successfully implemented, the stock market would see a greater increase. This statement directly ignited market enthusiasm, causing the three major indices to surge to the day's high. Boeing's stock price rose sharply due to favorable news regarding airline orders, reflecting strong investor confidence in the agreement.

In the commodity market, gold prices have generally plummeted, while crude oil prices have rebounded from a low, approaching $60 per barrel.

Future Outlook: Opportunities and Challenges Coexist

Although this is just a framework agreement and details are yet to be finalized, its importance cannot be ignored. Lutnick stated that the agreement creates $5 billion in opportunities for U.S. exporters in the fields of ethanol, beef, machinery, and agricultural products. For the UK, the agreement is expected to alleviate the tariff pressures it faces and provide breathing room for the steel and automotive industries. However, UK officials caution that this is not a complete free trade agreement, and negotiations in certain areas may face complex challenges.

The world's attention is focused on this agreement, as it provides clues about the Trump administration's strategy in trade negotiations—whether the baseline tariffs will continue and whether other countries can reach similar agreements. In the coming weeks, the disclosure of the details of the agreement will further reveal its far-reaching impact.

The conclusion of the framework of the US-UK trade agreement is an important collaboration between the two countries amid global trade uncertainties. As Trump said, this agreement "benefits both countries," injecting vitality into both economies and bringing positive signals to the global market. We will continue to monitor the progress of this event and provide everyone with the latest updates!

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