Trump announces “breakthrough trade agreement” with U.K. Here’s what to know.

President Trump on Thursday announced a trade agreement with the United Kingdom.

Speaking from the Oval Office, Mr. Trump said a “breakthrough” deal with the U.K. would include “billions of dollars of increased market access for American exports,” specifically agricultural products. He added that the U.K. would “reduce or eliminate” numerous nontariff barriers.

The final details are being written and will be delivered in the coming weeks, the president said.

“We still have our 10% tariff on which will produce $6 billion of revenue for the United States,” said Commerce Secretary Howard Lutnick during the White House briefing, referring to a 10% tax on imported goods from all U.S. trade partners, including Britain, imposed by Mr. Trump in April.

U.K. Prime Minister Keir Starmer said the deal would boost trade between the two countries and create jobs.

“This is a really fantastic, historic day in which we can announce this deal between our two great countries,” Starmer  said over the phone during the White House announcement. “I think it’s a real tribute to the history that we have of working so closely together.”

Britain says the deal will cut tariffs on U.K. cars from 27.5% to 10% and eliminate tariffs on steel and aluminum, adding that the agreement sets a quota of 100,000 U.K. vehicles that can be imported to the U.S. at a 10% tariff.

News of a potential deal inflated investor confidence Thursday, with markets making gains in early trading. Following the trade deal announcement, the S&P 500 soared 55 points, or 1%, to 5,686 points. The Dow Jones Industrial Average rose 408 points, or 1% and the Nasdaq Composite climbed 1.3%.

More trade deals are also in the works, according to President Trump. 

Treasury Secretary Scott Bessent is traveling to Switzerland this weekend, where he will meet with a Chinese trade delegation. Mr. Trump imposed levies of as high as 145% on Chinese imports, leading the country to fire back with 125% tariffs on American goods. 

For businesses, consumers and investors, progress on the trade front can’t come soon enough amid ongoing uncertainty on where the U.S. economy is headed. A 10% baseline tariff on most imported goods has been in effect since April 5, while so-called reciprocal tariffs against other countries — with the exception of China — are paused until July.   

Where do negotiations stand?

The announcement Thursday of a deal with the U.K. marks what could be the first of other trade agreements, with Mr. Trump and his team in negotiation mode with foreign leaders from Canada, Italy, India, Japan and other trading partners since announcing his “Liberation Day” tariffs on April 2.

Mr. Trump has not specified when agreements with other countries would be announced, but said that more deals are to follow. 

“We have many meetings planned today and tomorrow,” the president said Thursday during the announcement from the Oval Office. “And every country wants to be making deals.”

While testifying on Capitol Hill earlier this week, Treasury Secretary Scott Bessent addressed the timeline for trade deals: “I’d be surprised if we don’t have more than 80% or 90% of those wrapped up by the end of the end of the year. And that may be much sooner,” he said, referring to countries with which the U.S. has trade deficits.

Some experts, however, believe negotiations will take longer.  

Han-koo Yeo, a senior fellow with the Peterson Institute for International Economics believes that countries with whom the Trump administration is negotiating will have it in their interest to move slowly in their trade discussions. That’s because of the longterm implications these deals will have, the former South Korean trade minister told CBS MoneyWatch.  

Negotiations will likely drag past May into June, according to Ian Bremmer, president of the Eurasia Group, although some countries might be motivated to act quickly.

“Everyone facing negotiations has been told to submit letters with their ‘best offers,'” Bremmer said in an email to CBS MoneyWatch, “and smaller countries that desperately want/need deals are complying.”

Who is the U.S. negotiating with?

Bessent told the House committee Tuesday that the U.S. has 18 “important trading relationships” and is currently negotiating with 17 to reach deals. “Many of our trading partners have approached us with very good offers and we are in the process of renegotiating those,” he said.

The Trump administration in recent weeks has discussed trade and tariffs with Canada, Italy, India and Japan.

It’s unclear which deals will be announced first, but Clayton Allen, who covers politics and policy in Washington for Eurasia Group, said to look for deals with Japan, South Korea, the United Kingdom and India — countries that have been engaged in trade negotiations with the U.S. the longest. 

Eurasia predicts a deal with Japan could come in mid-June.

China absent from negotiations for now

What Bessent did make clear to Congress on Tuesday is that the U.S. has not yet entered into active trade talks with China.  President Trump in April said that he had spoken with Chinese President Xi Jinping amid tariff tensions, but China denied any talks between Beijing and Washington had taken place.

The Treasury secretary, however, is set to meet with a high-level Chinese delegation this weekend while conducting trade talks in Switzerland, the Trump administration announced Tuesday. 

A post from the Chinese Embassy on X confirmed the meeting. “Based on full consideration of global expectations, China’s interests, and the appeals of the U.S. business community and consumers, #China has decided to agree to engage with the #US side,” the posts reads. “As China’s lead on China-U.S. economic and trade affairs, Vice Premier He Lifeng will hold talks with U.S. Treasury Secretary Scott Bessent during his visit to #Switzerland from May 9 to 12.”

A spokesperson for the embassy said in a statement Wednesday that the U.S. has reached out to China “through various channels” and that the talks are being held “at the request of the U.S. side.” The spokesperson added that China “firmly oppose[s] the U.S. abuse of tariffs.”

In a press briefing on Thursday, Commerce Ministry spokesman He Yadong reiterated this stance, saying the U.S. “needs to show sincerity to talk and be prepared to rectify its wrongdoing and cancel unilateral tariffs,” according to Bloomberg.

What could trade agreements look like?

The U.S.-U.K. trade pact gave the world its first glimpse at what future deals might look like. But as Paul Ashworth, chief North America economist at Capital Economics, points out not all trade deals will necessarily be created equal.

“For the rest of the world, this could offer something of a blueprint, but countries being threatened with even higher reciprocal tariffs would presumably have to offer more that the U.K., which only ever faced the 10% minimum,” he said in a research note.

Mr. Trump also signaled on Thursday that other countries should not expect to get the same treatment as the U.K. Asked whether the baseline 10% tariff on imported British goods would be a template for future trade deals, he said the answer is “no.”

“That’s a low number,” Mr. Trump said, adding, “Many, some will be much higher.”

While it’s hard to predict what other potential tariff deals might include, Yeo, who has helped orchestrate several bilateral and mulitlateral trade negotiations in the past, said such agreements would likely be nonbinding “gentlemen’s agreements” or memorandums of understanding.

In other words, the U.S. could come to an agreement with a trading partner only to renege later on by issuing additional tariffs. 

“The framework deal is only as good as the nice piece of paper that you write it down on,” said Eurasia’s Allen. “Trade deals are very, very complex animals, and you’re going to get probably top line agreement on some key issues of concern with a promise to come back and negotiate other things,” he said.

Asked by Ohio Rep. Dave Joyce about the format of the deals, Bessent on Tuesday said, “I expect that we can see a substantial reduction in the tariffs that we are being charged, as well as nontariff barriers, currency manipulation and the subsidies of both labor and capital investment.”

contributed to this report.