Trump announces his first trade deal with the UK. Here's what's in it.

President Trump announced his first deal on Thursday since launching a global trade war. He unveiled a limited pact with the United Kingdom that would lower barriers on some goods, such as automobiles and agriculture, while leaving many details yet to be worked out.

It's a "tremendous trade deal for both countries," Trump said Thursday in the Oval Office. "This is a fantastic, historic day," added UK Prime Minister Keir Starmer, who joined the event over the phone.

"The final details are being written up" and will be concluded in the coming weeks, Trump added.

One key change not in the offing is any adjustment to the 10% baseline tariffs that Trump imposed on goods from nearly every country in the world. Those duties are set to stay in place, with the president reiterating Thursday that he views 10% as the minimum and that other countries will face far higher duties.

The core of the deal is essentially a trade where the UK will get a lowering of US duties on key sectors. Most in focus are steel — US duties on UK-made steel will drop from 25% to 0% — and car exports, where duties are set to be reduced from 27.5% to 10% according to a release from the UK.

In return, Prime Minister Starmer is offering concessions to open the UK markets more to things like US autos, ethanol, machinery, and agricultural products, as well as unspecified concessions on so-called digital service taxes that hit US tech companies.

In one example, the UK will remove the tariff on ethanol completely.

In a fact sheet, the White House claimed "unprecedented" new access to the UK market, which it said represents a $5 billion opportunity for new exports.

Trump also said the deal includes provisions for streamlined customs procedures for US exports and new economic national security measures. Secretary Lutnick added that Boeing is set to make new purchases of British airport engines as part of the deal.

Unanswered questions

Yet the unanswered questions were abundant.

In one example, Trump focused heavily on US beef exports in his opening remarks but then acknowledged that the UK wouldn't be changing its beef standards, which have been a far bigger hangup than other issues like tariffs.

"I think they'll take what they want," Trump said of beef exports.

"There will be no weakening of UK food standards on imports," added the release from London, describing the deal as focused on new reciprocal market access, including a new tariff-free quota for UK farmers.

The deal to reduce US car tariffs to 10% will also only apply to the first 100,000 vehicles imported into the US by UK car manufacturers annually. That figure, the UK government noted, is approximately equal to the total exported last year.

"Work will continue on the remaining sectors — such as pharmaceuticals and remaining reciprocal tariffs," the UK government added.

The announcement was enough to push US stocks higher on Thursday as investors turned optimistic that Trump's trade war may be easing.

But others were more cautious about the import of the announcement.

"I think it is going to be underwhelming as an opening salvo," Henrietta Treyz of Veda Partners predicted during a Yahoo Finance Live appearance.

She noted it was good for groups like UK automakers but said, "There are much bigger pieces of this pie," pointing to still-outstanding deals on partners like South Korea, Japan, Canada, Mexico, and India, where deals could be weeks or months away.

Overall, the UK has been spared the most intensive actions from Trump. A recent Yale Budget Lab report found that the UK economy is likely to be 0.2% bigger in the long run as a result of tariffs imposed to date, while other nations like Canada and China are set to take a hit and turn negative.

Today's announcement was the second trade win for Starmer, who inked a new trade agreement with India earlier this week.

'A baby step'

Other reactions to the announcement from some in the financial community included skepticism about how far-reaching the agreement will end up being.

Dan Ives of Wedbush called the announcement "a baby step start of getting some deals/framework on the table," adding that "the reality is that the market and especially tech investors will view this announcement as a yawner ... with the laser focus being China negotiations, India, and Vietnam."

Terry Haines of Pangaea Policy added that, for markets, "the existence of today's deal matters more than any detail, because it confirms for jittery and impatient markets fundamental things," most importantly that Trump will move forward on deals.

Indeed, markets will have another round of trade talks to watch this weekend when two top Trump aides travel to Switzerland to begin those talks with China.

Trump also looked ahead to this weekend's talks on Thursday, predicting, "I think we will have a very good weekend." He offered optimism that progress would be possible in the days ahead, and regarding tariffs, if those talks go well, "you can't get any higher, so you know it's coming down."