Everyone relax. It’s let's-make-a-deal time, as US President Donald Trump announces plans for a trade deal between the US and UK. So what do we know so far?

What we know so far

The “prosperity deal” was announced overnight with a few key goals in mind. While it’s not a full trade agreement just yet, the deal does already have a few key planks.

The agreement-in-principle talks about:

• Beef imports - the US can now import 13,000 metric tonnes of beef to the UK duty-free, and the UK will also remove the 20% tariff on said imports;
• Ethanol - the UK will allow a duty-free import quota of 1.4 billion litres;
• Cars - the UK can import 100,000 vehicles to the US at a lowered tariff rate of 10% (down from 27.5%)
• Agriculture - improved cooperation and market access
• Standards - the two nations will discuss aligning their standards for easier regulatory approvals
• Digital trade - the US will talk to the UK about how it applies its digital services tax which sees a 2% levy applied on search engines, social media giants and more
• IP - the two will negotiate on combatting so-called “non-market practices” from other countries, as well as identifying bilateral opportunities for aligning of laws

There’s more in there, and you can read the full text of the deal right here (PDF).

US Trade tsar Howard Lutnick said via the International Trade Administration that the deal would mark a “new era” in US cooperation. The US wants the deal ultimately to “open markets, raise revenue and strengthen security”.

It’s an historic handshake, especially considering the timing of the announcement. Former President Barack Obama warned back in 2016 that if Britain were to go ahead with its exit of the European Union, the UK would find itself “at the back of the queue” for trade talks. Current US President Trump has seemingly reversed that stance. Wouldn’t be the first time, mind you.

Markets breathe out on news of a deal

After a tetchy time on the markets that can almost be directly attributed to Trump’s trade tirade, markets are responding positively to the news. 

In just his first 100 days back in office, Donald Trump’s sweeping tariffs and trade restrictions have shaken global markets and tested long-standing alliances. Heavy tariffs on Chinese, Japanese, and even select European imports have reawakened fears of a trade war. Most - if not all - industries have taken a hit, but no more than automakers and tech players. 

Markets around the world - especially in Europe and Asia - have pivoted out of the US in the name of security, instead preferring to bolster themselves with local assets. These sorts of moves have pushed Australian blue-chips higher, with CBA now trading at an all-time record.

Currency markets also reflect the fallout. The Euro and Pound have both slipped against the US dollar as investors react to the growing transatlantic divide. The Australian dollar has been one of the clearest casualties of Trump’s return to aggressive trade policy. In the wake of sweeping U.S. tariffs—particularly those targeting China and Japan, Australia’s two biggest export markets—the Aussie dollar fell below 60 US cents for the first time since the pandemic.

Today, however, markets are reacting reasonably well to the news. US shares have extended gains made in recent days, with the S&P500 closing up over 0.5% (despite boosting itself by over 1.5% off the back of the news earlier in the day).

The ASX200 opened flat on Friday morning but has risen 0.33% by the middle of the day.

It’s a stark comparison to week-end trade of previous weeks and months where markets were rocked on Trump-driven trade uncertainty.