U.S. President Donald Trump announced a trade framework with the U.K., hailing it as a “breakthrough” that will bring down barriers and expand market access for American imports.

“I’m thrilled to announce that we’ve reached a breakthrough trade deal with the United Kingdom,” Trump said May 8 in the Oval Office. 

Trump said full details of the pact would still be negotiated over the coming weeks. But under the agreement, the U.K. would fast-track American goods through their customs process and reduce barriers on agricultural, chemical, energy and industrial exports.

“The deal includes billions of dollars of increased market access for American exports, especially in agriculture, dramatically increasing access for American beef, ethanol and virtually all of the products produced by our great farmers,” Trump said.

The announcement is the first Trump made since imposing high tariffs on dozens of U.S. trading partners. The president later paused those duties temporarily in order to allow nations to reach agreements with the U.S.

“This is going to boost trade between and across our countries, it’s going to not only protect jobs, but create jobs, opening market access,” said U.K. Prime Minister Keir Starmer, who dialed into the event by phone.

The pact spurred cautious optimism on Wall Street, with stocks up and bonds down amid hopes that the agreement could be a blueprint. 

Trump cheered the market reaction, and predicted investors would be even more encouraged if Congress passes a law extending his tax cuts, comments that spurred the S&P 500 Index to extend gains to session highs, climbing about 1.5%.

“If that happens, on top of all of these trade deals that we’re doing, this country will hit a point — you better go out and buy stocks now,” he said. 

The British deal may provide clues for the shape of potential future agreements with other economies. The terms are limited in scope and they keep in place a 10% baseline tariff, according to Commerce Secretary Howard Lutnick.

Under the agreement, U.K. manufacturers would be allowed to send 100,000 cars into the U.S. under a 10% tariff — rather than a 27.5% rate they previously faced after Trump raised duties. 

“For the U.K. auto people, this is tens of thousands of jobs that the president agreed that he would protect for them,” Lutnick told reporters.

Engines and plane parts from Rolls-Royce Holdings PLC will be able to enter the U.S. market without tariffs and a British airline will buy $10 billion worth of Boeing Co. planes, Lutnick said, without naming the carrier.

British Airways parent IAG SA is poised to order about 30 787 Dreamliner aircraft, according to people familiar with the matter.

British farmers will be given a tariff-free quota for 13,000 metric tons of beef. The U.K. will not weaken its food standards on American imports, its government said.

The two sides differed on some key details, pointing to the hastily arranged nature of the agreement. 

The British government released a statement saying U.S. tariffs on steel and aluminum from the U.K. will go to zero, but the White House put out its own description less than an hour later saying they “will negotiate an alternative arrangement” to the metals duties and that the agreement creates “a new trading union” on the materials.

Among the important issues that still need to be worked out: how or if the U.K. would alter its digital services tax, which impacts some major U.S. tech companies.

The U.K. is not changing its tax under the deal, according to a fact sheet from Starmer’s government. Instead, the nations “have agreed to work on a digital trade deal that will strip back paperwork for British firms trying to export to the U.S.”

Talks will also continue on the pharmaceutical industry and remaining levies, the U.K. said. But the Trump administration will give the U.K. “preferential treatment” in any additional sectoral tariffs Trump decides to impose, which are expected to include drugs, lumber, copper, and semiconductors, among other products. 

British government officials had for weeks pushed their U.S. counterparts to relax Trump’s 25% tariffs on steel, aluminum and automobiles.

The U.K. and U.S. are also expected to negotiate an advanced technology partnership on issues including quantum computing, nuclear fusion and aerospace.

With polls showing Americans souring on his economic stewardship, the May 8 deal is a sign that Trump is seeking an off-ramp from his plan to raise U.S. tariffs to their highest level in a century. Trump has been trying to pressure other countries to reach quick agreements with the U.S. amid the 90-day reprieve. The U.K.’s tariffs were originally set at 10%, meaning it didn’t directly benefit from that temporary easement.

“Today’s action also sets the tone for other trading partners to promote reciprocal trade with the United States,” the White House said in its statement. 

Yet the 10% tariff rate for the U.K. will not serve as a template for negotiations with other countries, Trump said. 

“That’s a low number, they made a good deal. Many, some, will be much higher,” Trump told reporters. 

The president is also locked in a standoff with China, the U.S.’s third-largest trading partner on which he imposed 145% tariffs. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer are kicking off formal talks this week with their Chinese counterpart, but Trump ruled out preemptively lowering his duties to speed a deal.

Trump imposed his duties on April 2, but backtracked a week later as a panic ensued in the bond market and investors sold off stocks. He left the 10% duty in place on virtually all trading partners during the negotiating period. The U.K. had escaped the higher, so-called “reciprocal” levies because its one of the few major economies with which the U.S. does not run a goods trade deficit.

Automotive trade between the two countries is lopsided, with the U.S. importing $8.19 billion worth of new vehicles from the U.K. last year. That’s more than 10-fold the value of U.S. passenger cars and light trucks exported to the U.K., according to U.S. Commerce Department data.

The move provides relief to a relatively small share of the total autos imported to the U.S.. About 96,000 U.K.-made cars and light trucks came to the U.S. last year, worth about $8.2 billion, according to Commerce Department data. By contrast, Mexico, the largest source of U.S. auto imports, supplied nearly 3 million vehicles last year.

Luxury and specialty brands such as Range Rover maker Jaguar Land Rover Automotive PLC , supercar maker McLaren and Aston Martin are among those that stand to benefit.

A U.S. trade deal has long been held up as one of the great prizes of the U.K.’s departure from the European Union, and the pact raised hopes it could lift the outlook for the British economy. 

It’s also a validation of Starmer’s approach to dealing with Trump. During his first White House visit earlier this year, Starmer impressed the U.S. president with an invitation from King Charles III to make a second state visit. 

In a press conference after the Bank of England’s decision to cut interest rates, Governor Andrew Bailey said he welcomed the reported trade deal and hoped that the U.S. would reach agreements with other countries, which could ease some of the risk to growth.

“It will help to reduce uncertainty, and that’s important,” he said. “The U.K. is though very open economy. So the U.K. is also affected by the way in which trade policy and tariffs affect obviously other economies.”

While Trump and his aides have expressed an appetite for deals, the president continued to send mixed signals on trade policy on May6 when he downplayed the importance of agreements and said he would simply dictate tariff levels and trade concessions on partners looking to reduce higher duties if negotiations falter. 

The unpredictable nature of Trump has fueled uncertainty for investors and business executives worried about the impact of his tariffs.

Long Negotiation

The length of time it took for both nations, which have largely been enthusiastic partners, to reach the agreement could also serve as a warning sign that it may not be easy to hammer out pacts with other countries the Trump administration has prioritized, including Japan, India, Israel and South Korea. 

British and U.S. negotiators held five rounds of talks during the first Trump presidency, but his successor, Joe Biden, suspended them. After all that, the May 8 agreement — five years after Brexit — stopped a long way short of the “all-singing, all-dancing” deal that former Prime Minister Boris Johnson once said was possible.

U.S. talks with several nations have centered around, at best, a top-line deal on commitments and intentions that may leave many details traditionally included in comprehensive trade agreements to be negotiated later.

The U.K. is still likely to be in a worse economic position with its biggest individual trading partner than before Trump’s tariff war, providing potential attack lines for Starmer’s domestic political opponents. 

Starmer’s government has worked to shore up the U.K. economy by solidifying relationships with other trading partners. On May 6, it reached a landmark deal with India and has long been negotiating a pact with the EU.