After the turbulence sparked by Trump’s “Liberation Day” tariffs on April 2, markets have strengthened in recent weeks on optimism that countries will reach agreements with Washington to avoid his potentially damaging levies.
“The trade deal news… sets the table for the market that it should expect more deals in coming weeks and months,” said Briefing.com analyst Patrick O’Hare.
“From that vantage point, it is providing a sentiment boost.”
The deal reduces tariffs on British cars and lifts them on steel and aluminum, while in return Britain will open up markets to US beef and other farm products.
British Prime Minister Keir Starmer also hailed it as a “historic day”, although the agreement is thin on details and both sides said there would be more negotiations.
A 10 percent baseline tariff on Britain imposed by Trump on April 2 also remains in place.
Top Chinese and US negotiators are set to meet on Saturday and Sunday in Switzerland for their first talks since Trump unveiled his tariffs assault.
The gathering has fueled hopes for a dialing down of tensions between the world’s economic superpowers, which have seen Washington impose levies of 145 percent on China and Beijing retaliate with 125 percent tariffs of its own.
But there are concerns that little substantial progress will be made.
“It is clear the market is already pricing in some level of trade optimism… but without actual deals [outside of the US-UK] inked, it’s hard to justify further upside,” Razaqzada said.
While London and Washington closed in on a deal, the EU warned it would target US products, including planes and cars, worth 95 billion euros in retaliation for Trump’s tariffs if their own negotiations fall flat. (AFP/Xinhua)
