liveLive updates: US shares continue gains on first Trump trade deal, ASX set for flat startBy business editor Michael JandaTopic:Stock Market1h ago1 hours agoThu 8 May 2025 at 9:21pmSkip to timelineabc.net.au/news/asx-markets-business-news-live-updates/105271992Link copiedShareShare articleUS shares have continued recent gains as Donald Trump's administration strikes its first post "Liberation Day" trade deal, with staunch ally the UK.However, UK traders didn't appear impressed, with the FTSE easing lower, and local traders aren't enthused either, with the ASX 200 futures flat.Follow the day's financial news and insights from our specialist business reporters on our live blog.Disclaimer: this blog is not intended as investment advice.Key Events'UK-US trade deal is not a big deal'2m ago2 minutes agoThu 8 May 2025 at 10:36pmUS shares gained as much as 1.6pc on the trade deal, then reality set in45m ago45 minutes agoThu 8 May 2025 at 9:53pmTrade deal not the only action in UK overnight, with BoE cutting rates1h ago1 hours agoThu 8 May 2025 at 9:25pmShow all key eventsSubmit a comment or question Log in to commentLive updatesLatestOldestKey Event2m agoThu 8 May 2025 at 10:36pm'UK-US trade deal is not a big deal'MBy Michael JandaThis analysis out from Paul Dale, the chief UK economist at Capital Economics, who headlines his note, "UK-US trade deal is not a big deal"."As a result of all this, we estimate that the US effective import tariff rate with the UK may rise from 1% last year to around 11%, compared to the 13% or so that was in place yesterday," he concludes."If Trump were to place 25% tariffs on pharmaceuticals in the future, that would add another 3 percentage points or so and take it to around 14%."So the UK will still be subject to much higher import taxes in the US than it was before Donald Trump took office for a second time."The trade deal won't significantly alter the outlook for the UK economy," Dale continues."That's because the initial US import tariffs applied to UK exports by Trump in March and April (a baseline on all goods of 10% and 25% tariffs for cars, steel and aluminium) wouldn't have reduced UK GDP by much more than 0.1-0.2%."It follows that trimming some of those tariffs won't reduce that small drag by much."However, aside from the previously mentioned aerospace companies, Dale notes that the proposed deal is much more significant to certain pockets of UK industry."The trade deal is of greater importance to some sectors of the UK economy than the whole economy, with the car sector being able to breathe a sigh of relief having tariffs effectively reduced from 25% to 10%," he explains."Cars are the UK's single largest goods export to the US, accounting for 15% of the total last year."Copy linkKey Event45m agoThu 8 May 2025 at 9:53pmUS shares gained as much as 1.6pc on the trade deal, then reality set inMBy Michael JandaSome very useful analysis of overnight market action and reaction to the US-UK trade deal from NAB's head of market economics Tapas Strickland.He points out that the S&P 500 initially rose as much as 1.6% on announcement of the deal, before erasing most of those gains to close just 0.6% higher."Why the paring back of the initial enthusiasm? The UK-US Trade Framework is only a framework and has many unresolved issues," he notes."This is also an agreement where the US already runs a goods trade surplus with the UK. Final details are still being negotiated."The deal so far includes the 10% baseline tariff on most goods remaining while tariffs on steel and aluminium will fall from 25% to zero. The UK will be able to export 100,000 cars a year to the US at a 10% tariff (down from 27.5%). There will be "reciprocal" market access on beef. The UK will remove the tariff on US ethanol and committed to import more US goods, including Boeing planes."The real kicker is that even for a strong ally like the UK, where the US already runs a trade surplus (Australia is in the same camp on both counts) it appears that a baseline 10% tariff on most goods is non-negotiable."The US Trade Representative Greer noted other countries should view the U.K. deal as a framework for their negotiations with the US. President Trump also said that the 10% baseline tariff is probably the lowest end for a tariff," Strickland explains."It seems most countries will likely still face at least a 10% baseline tariff, with prospective trade deals more about carveouts for sector specific tariffs."On US-China talks President Trump made positive comments: "I think it's going to be substantive" and he said he would consider lowering the 145% tariff on China, "…right now you can't get any higher. It's at 145% so we know it's coming down". And Commerce Secretary Lutnick noted "Over the next month or so, we're going to roll out dozens of deals"."Copy link57m agoThu 8 May 2025 at 9:41pmSome clear winners and losers from US-UK trade dealMBy Michael JandaBritain still maintains a significant aerospace industry, so the carve out for aircraft parts was a big win for some companies.Melrose Industries was the top performer on the FTSE 100, up 5.2%.Another of the top performers was Rolls Royce Holdings, up 3.7%. You may think of cars when you hear Rolls Royce, but the company is actually one of the world's leading jet engine manufacturers.On the flip side, pharmaceutical company AstraZeneca was down 3.5% with a deal on drug tariffs put off.The Trump administration has yet to announce its general policy around tariffs for pharmaceuticals.On the other side of the Atlantic, Boeing jumped 3.3% on the trade deal's stipulation of a big aircraft purchase by a British airline.Meanwhile, big pharma fell on the continued uncertainty around tariffs on imported drugs and treatments.Merck was the biggest loser on the Dow Jones Industrial Average, off 1.9%, with Johnson & Johnson and Proctor & Gamble also in the red.Copy linkKey Event1h agoThu 8 May 2025 at 9:25pmTrade deal not the only action in UK overnight, with BoE cutting ratesMBy Michael JandaThe Bank of England met and decided to cut interest rates by a quarter of a percentage point to 4.25%, as was typically expected, although there were a wide range of views expressed at the policy committee meeting."The vote was a surprise, though, with five members voting for a 25bp cut, two voting for a 50bp cut, and two voting to hold," noted Westpac's Imre Speizer."Guidance remained that additional easing should be "gradual and careful". The BoE emphasised that the UK economy will feel the global impact of tariffs."Although, the direct impact has obviously been softened somewhat through the deal struck with the US overnight.Elsewhere in Europe:"Norway's central bank, Norges Bank, held [the] deposit rate steady at 4.5%, as was widely expected, but reiterated that it will be cut "in the course of 2025", adding that "there is uncertainty about future trade policies…this may pull the interest rate outlook in different directions", noted Speizer."Sweden's central bank, Riksbank, held the policy rate steady at 2.25%, as was widely expected, while signalling an easing bias. It noted that it is more likely now that inflation will undershoot expectations, and that this could suggest a slight easing of monetary policy going forward.""In short, no real surprises from the central banks. Those are still mainly coming from the White House.Copy linkKey Event1h agoThu 8 May 2025 at 9:10pmUS shares continue march higher as Trump strikes first trade dealMBy Michael Janda US shares have continued to gain as US president Donald Trump secured his first trade deal, with staunch ally the United Kingdom.The benchmark US indices were up 0.6% (Dow and S&P 500), while the tech-heavy Nasdaq jumped 1.1%.Traders perhaps didn't think the trade pact was such a good deal for the UK, with London's FTSE share index defying gains elsewhere in Europe (the Eurostoxx was up 0.4% and Germany's DAX 1%) to end 0.3% lower.Here's the main aspects of the deal:The 10 per cent baseline tariff introduced by Mr Trump remains in place.Tariffs on some British-made cars will be reduced from 27.5 per cent to 10 per cent. British car-makers will be given a quota of 100,000 cars a year that can be sent to the US at the lower tariff rate.Tariffs on British steel exported to the US will be cut from 25 per cent to zero. Plane parts can be exported to the US from the UK tariff-free. In return, a British airline is expected to buy $US10 billion ($15.5 billion) of Boeing aeroplanes.There will be reciprocal market access on beef, with British farmers given a tariff-free quota for 13,000 tonnes. Britain will also remove tariffs on US ethanol, which is used to produce beer.The deal outlines plans for further talks on pharmaceuticals. The Australian share market looks set to be caught somewhere between the two, with futures basically flat for the ASX 200.US and UK strike deal as Trump slashes tariffs on British steel, carsCopy linkPosted 1h ago1 hours agoThu 8 May 2025 at 9:21pmShare optionsCopy linkFacebookX (formerly Twitter)TimelineRead nextCommentsTimelineKey EventsLatestAnalysisEconomyMarkets'UK-US trade deal is not a big deal'2m ago2 minutes agoThu 8 May 2025 at 10:36pmUS shares gained as much as 1.6pc on the trade deal, then reality set in45m ago45 minutes agoThu 8 May 2025 at 9:53pmTrade deal not the only action in UK overnight, with BoE cutting rates1h ago1 hours agoThu 8 May 2025 at 9:25pmUS shares continue march higher as Trump strikes first trade deal1h ago1 hours agoThu 8 May 2025 at 9:10pmTop StoriesAmerican Robert Prevost elected pope and will be known as Pope Leo XIVTopic:Religious LeadersPhoto shows A man in religious robes looks down from a balconyPrice defection slammed as hostile Liberal takeover with Angus TaylorTopic:Political LeadershipDrained batteries and broken trust: Energy giant denounced over clean tech schemeTopic:Energy IndustryUS and UK strike deal as Trump slashes tariffs on British steel, carsTopic:TariffsMeeting with hate preacher triggers court order for notorious terror leaderTopic:ExtremismJust InIconic fishing competition draws anglers to the NT's remote Daly RiverTopic:Recreational Fishing6m ago6 minutes agoThu 8 May 2025 at 10:32pmMurder charge laid after woman stabbed in Adelaide's northTopic:Homicide27m ago27 minutes agoThu 8 May 2025 at 10:11pmIndia says military stations were attacked by Pakistani drones and missilesTopic:Unrest, Conflict and War39m ago39 minutes agoThu 8 May 2025 at 10:00pmShearers struggle for work as wool production hits century-lowTopic:Wool Growing48m ago48 minutes agoThu 8 May 2025 at 9:50pmMore Just InBack to top