Trump's UK trade pact: Historic claim or hollow framework?

President Trump presented the framework trade agreement with the United Kingdom on Thursday, calling it a milestone in his mission to rebuild the global economy. The announcement ceremony was carefully choreographed, with British Prime Minister Keir Starmer joining by phone with the White House during an event organized on the 80th anniversary of the Allies' victory in World War II.

However, contrary to earlier announcements, the agreement is not the "full and comprehensive" deal that Trump promised, nor is it the free trade agreement he sought during his first term, claims Bloomberg. The framework ensures the United States increased market access and a faster customs process for exports to the United Kingdom, while the UK gains limited tariff relief on cars, steel, and aluminum.

"From the point of view of markets generally, as well as those who are concerned about the US economy, this is a nothingburger," said Tim Meyer, a professor of international trade law at Duke University School of Law.

He added, "There’s nothing really to see here. Obviously this is a framework, this is not actually an agreement."

Prime Minister Starmer admitted that both sides need to "finish ironing out some of the details" but called the agreement "fantastic." Trump, on the other hand, downplayed questions about whether he exaggerated the deal, presenting it as a "great deal for both parties" and adding that "every country wants to be making deals."

The agreement overlooks some of the biggest concerns American companies have about trade relations. The United Kingdom will maintain its digital services tax, which affects major American tech companies, with only a vague promise of working towards a future digital trade agreement. Christine Bliss, president of the Coalition of Services Industries, stated, "The UK’s digital services tax should be further discussed and addressed to ensure it is implemented in a manner that treats American service suppliers fairly."

Both sides also left unresolved the issue of Trump’s plans to impose broad tariffs on pharmaceutical products. Although the UK lifted tariffs on some American agricultural products, strict food standards regulations remain in place.

"So far, we’ve seen little signs of euphoria in UK financial markets, which tells you all you need to know about how investors are viewing the deal," said Matthew Ryan, head of market strategy at Ebury. "This is also far from a full-blown trade agreement, which will likely take months, if not years, to be finalised, and it will still be some time before the finer details are ironed out."

The United States and the United Kingdom also presented conflicting information on key elements of the agreement. The British government released a statement saying that US tariffs on steel and aluminum from the UK would be lifted, while the White House issued its description less than an hour later, stating that the parties "will negotiate an alternative arrangement" for metal tariffs.

Despite these uncertainties, investors reacted positively, with almost all major stock market segments experiencing gains. Trump maintained a 10 percent basic tariff rate for the UK—the same as his initial announcement on April 2, serving as a warning to countries hoping to lower this figure.

The White House stated that this action "sets the tone for other trading partners to promote reciprocal trade with the United State." Discussing the terms, Trump emphasized that "we are using tariffs now for our benefit" and made it clear that for some countries they may be higher than 10 percent. "They made a good deal," he said of the British. "Many, some, will be much higher."