Source: Techub Info
Today, we focus on a globally sweeping hot news - the United States and the United Kingdom have reached a notable trade agreement framework. This not only marks a new stage in the economic and trade relations between the two countries but also ignites market investment enthusiasm.
U.S. President Trump boldly stated at the White House: "Everyone should buy stocks right now!" He pointed out that congressional bills and trade agreements will push the U.S. economy to a "critical point", and now is an urgent moment for investment. Boosted by this, the S&P 500 index (SPY) expanded its gains, rising 1.4% at one point, closing at $565.06, up about 0.7% from the previous day's closing price of $561.15. However, Trump also took the opportunity to criticize Federal Reserve Chairman Powell, calling him "Late Powell" and complaining that "the whole world is cutting interest rates, and only he is dragging behind".
Additionally, his tough stance on Mattel drew attention, warning that Mattel would face 100% tariffs if it moves production, causing Mattel's stock price to plummet 5.3% at one point. Trump also revealed that the U.S. is purchasing a brand new air traffic control system, paving the way for infrastructure upgrades. Below, we will provide an in-depth interpretation of the UK-US agreement's background and market impact.
UK and US Reach Trade Framework, Trump Announces Boldly
On the evening of May 8th Beijing time, U.S. President Trump announced the preliminary framework of a trade agreement with the UK in the White House Oval Office.
He stated that this agreement will significantly expand market access for U.S. products, especially in agriculture, with U.S. beef, ethanol, and "almost all products our great farmers produce" gaining broader export opportunities. Trump emphasized that the UK will reduce or eliminate multiple non-tariff barriers and simplify customs clearance for U.S. products, ensuring export approvals are "very, very fast, without complicated procedures".
Moreover, the agreement opens new markets for U.S. chemical products, machinery, and other industrial goods. Trump stated that the UK will be integrated into a framework consistent with U.S. economic security, with agreement details to be finalized in the coming weeks. He also posted on Truth Social: "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 great honor to have the UK as the first announcement target! More agreements are being negotiated, stay tuned!"
UK Prime Minister Starmer participated remotely, stating: "We have built an exciting platform for future cooperation." Starmer said the agreement is a "true tribute" to the long-standing cooperation history between the US and UK.
Agreement Background: From Tariff Disputes to Cooperative Win-Win
In April this year, Trump had announced a 10% "reciprocal tariff" on almost all global countries, with the UK facing a 10% base tariff and 25% tariffs on steel and automobiles. After this policy caused market turmoil and criticism, Trump quickly adjusted his strategy, introducing a 90-day "tariff suspension period" with a uniform 10% tariff on affected countries. This UK-US agreement is seen as the first major achievement following this policy shift.
Trump stated that the agreement brings the UK under the U.S. "security umbrella", bringing significant economic benefits to both countries. U.S. Secretary of Commerce Roudenick further revealed that the agreement will open new markets for U.S. ethanol, beef, and other products, expected to bring billions in export revenue and support saving thousands of jobs in steel and aluminum industries. He also mentioned that a UK airline will purchase Boeing aircraft worth $10 billion, and the U.S. will agree to waive tariffs on Rolls-Royce jet engines and parts.
Market Enthusiastic Response: U.S. Stocks Surge Straight Up
After the agreement's announcement, the market responded quickly. The U.S. stock market's three major indices showed slight fluctuations while Trump elaborated on the agreement details. Later, when asked about U.S.-China trade relations, Trump expressed optimism and urged investors to "buy stocks right now", saying that if trade agreements and tax cuts are successfully implemented, the stock market will see even greater rises. This statement directly ignited market enthusiasm, with the three major indices surging to the day's high point. Boeing's stock price significantly rose due to the positive aviation order news, reflecting investors' strong confidence in the agreement.
In the commodity market, gold prices generally dropped, while crude oil prices rebounded at the low end, approaching $60 per barrel.
Future Outlook: Opportunities and Challenges Coexist
Although this is just a framework agreement with details yet to be finalized, its importance cannot be overlooked. Roudenick stated that the agreement creates $5 billion in business opportunities for U.S. exporters in ethanol, beef, machinery, and agricultural products. For the UK, the agreement is expected to alleviate tariff pressures and provide a breathing opportunity for steel and automotive industries. However, UK officials warn that this is not a complete free trade agreement, and negotiations in some areas may face complex challenges.
Global attention is focused on this agreement, as it provides insights into the Trump administration's trade negotiation strategy - whether base tariffs will continue and if other countries can reach similar agreements. In the coming weeks, the disclosure of agreement details will further reveal its far-reaching impact.
The achievement of the UK-US trade agreement framework is an important collaboration between the two countries amid global trade uncertainty. As Trump said, this agreement is "beneficial to both countries", injecting vitality into their economies and bringing a positive signal to global markets. We will continue to follow the developments of this event and bring you the latest updates!
What are your thoughts on the new chapter of UK-US trade? Welcome to share your comments! If you find this analysis valuable, remember to like and share, so more people can understand this global hot topic!
