President Donald Trump announced a breakthrough trade agreement with the United Kingdom, eliminating a series of retaliatory tariffs. And what did traders do? They did what they do best — speculate.
The deal, which slashes several of Trump’s earlier tariffs on UK-made cars, aluminium and steel, was hailed by Prime Minister Keir Starmer as a move that could save thousands of British jobs in the car and steel industries that had been under threat. Still, many of the finer details remain unresolved.
One major element that has not changed is the 10% baseline tariffs Trump previously imposed on imports from nearly every country globally. These tariffs will stay in place, with the President reaffirming his belief that 10% is the minimum and warning that other nations could face even steeper duties.
A trade-off is at the heart of the agreement: the U.S. will lower tariffs on key UK exports. Steel tariffs will drop from 25% to zero, and car tariffs will be reduced from 27.5% to 10%.
In return, the UK offers greater market access for U.S. products like cars, ethanol, machinery, and agricultural products. Discussions are also ongoing regarding digital service taxes that target major American companies.
As the final terms are still being drafted, Trump took to Truth Social to rally investor sentiment: “Better go out and buy stocks now,” he posted. “This country will be like a rocket ship that goes straight up.” But judging by the futures markets, traders weren’t quite convinced.
Market Recap: The S&P 500 closed Thursday with a late-session rally, gaining 0.6%. The Nasdaq climbed 1%, while the Dow Jones added 0.6%.
Still, the trade news was enough to spark optimism in the crypto market, where investors began betting that a broader easing of Trump-era trade tensions could be on the horizon, possibly even with China.
So, what does a China trade deal have to do with crypto? Directly, not much. But in general, crypto markets thrive when global economic tensions ease. Cryptocurrencies are high-risk, high-reward assets that perform better when investors are confident and willing to take on more risk.
The shift in sentiment triggered a risk-on mode across markets. BTCUSD surged past $104,000 early Friday, hitting a three-month high. Ethereum price surged even more, boasting a 25% gain.
Bitcoin had already been on a four-day winning streak following the Fed’s decision earlier this week to hold interest rates steady. The trade news fueled the rally, pushing Bitcoin through a key resistance level.
Now, all eyes are on any signs of a potential US-China deal — a move that could give crypto the final nudge toward a full breakout.
