Latest / Markets with Megan: A Quick Financial Markets Update / US-UK Trade Deal: Unpacking the New Framework | S2 E040 | 05-08-25

Transcript

US-UK Trade Deal: Unpacking the New Framework | S2 E040 | 05-08-25 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: Any little bit of good news on trade is a good news for the equity market.
• 0:04
  Megan Horneman: It's Thursday, may the 8th, and this is Markets with Megan.
• 0:06
  Megan Horneman: If you like this podcast, please subscribe.
• 0:09
  Megan Horneman: Hit that alarm bell.
• 0:10
  Megan Horneman: You can share with friends, family or colleagues.
• 0:12
  Megan Horneman: But we're here today to discuss what we heard from the White House this morning, and it was that there's been some deal arrangements made between the US and the United Kingdom.
• 0:21
  Megan Horneman: This is the first one with our allies, so the equity markets are taking this with quite an optimistic tone.
• 0:28
  Megan Horneman: So let's talk about what we know at this moment.
• 0:30
  Megan Horneman: First of all, the United Kingdom is going to fast track US goods through their customs, so it's going to streamline US products to get into the UK market.
• 0:39
  Megan Horneman: They're going to ease some of the trade barriers that we've seen for things like ethanol, beef, agricultural, even some machinery.
• 0:50
  Megan Horneman: The UK is committed to buying about $10 billion worth of Boeing parts and airplanes.
• 0:52
  Megan Horneman: The UK can now sell about 100,000 of their cars to the US at a 10% tariff, and that's down from about a 27.5% tariff.
• 1:01
  Megan Horneman: To put that into perspective, last year the UK exported about 92,000 vehicles into the US, so that is a solid number where the UK can now send cars into the US at a very low tariff rate.
• 1:17
  Megan Horneman: The UK can also now sell steel to the US, and that's basically duty-free.
• 1:21
  Megan Horneman: There's also this is being set up as an opportunity for about $5 billion worth of exports of US agricultural goods to go into the United Kingdom's economy.
• 1:33
  Megan Horneman: This is there's still a lot to be known about what will eventually be signed on the dotted line when it comes to these trade deals.
• 1:40
  Megan Horneman: This is the framework, so there's a lot more that we don't know than we do know, but this is a positive first step in the right direction for some of our other allies as well.
• 1:48
  Megan Horneman: Can this set up a framework for many of the other countries to come to the table and put forth some arrangements similar to what the United Kingdom did?
• 1:57
  Megan Horneman: So, as we've talked about in the past, when it comes to the equity market, we saw the very violent moves lower after Liberation Day, and we knew that because that Liberation Day had put out a worst case scenario from a trade perspective, that any little bit of good news could result in equities rallying, and we're seeing that today.
• 2:15
  Megan Horneman: Us equities are rallying strongly.
• 2:18
  Megan Horneman: Bond yields are higher now, with the hopes that this won't damage the economy as much as some had anticipated, the sectors that are leading today within the US are the discretionary, the industrials, energy, materials and those lagging are some of the more defensives, like staples, utilities and healthcare.
• 2:35
  Megan Horneman: That's all we have today.
• 2:36
  Megan Horneman: If you want a history of our podcast, you can go to marketswithmeganfm.
• 2:40
  Megan Horneman: Thank you.