US-UK Trade Deal Falls Short

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TARIFF
U.S.-U.K. trade deal falls short

The U.S. and U.K. announced a trade deal that cuts tariffs on beef, ethanol, and cars but leaves many issues unresolved. Compared to broader agreements like the TPP, it’s limited, and the U.K.’s recent India deal highlights its gaps. This report breaks down the deal and its impact on U.S. trade. U.S.-U.K. agreement lowers tariffs on beef, ethanol, and cars (100,000 units at 10%, down from 27.5%) and removes British steel tariffs. The U.K. drops tariffs on U.S. beef, ethanol, and sports gear, plus buys $10 billion in Boeing planes. But a 10% U.S. tariff stays on most U.K. goods, higher than the earlier 1% rate. U.K. barriers on U.S. farm goods and a tech tax remain, with other topics like customs and digital trade left for later.

Trump ditched the TPP in 2017, which became the CPTPP with the U.K. joining in 2024. The CPTPP cuts nearly all tariffs, eases trade rules, and ensures stability, far more than the U.S.-U.K. deal. It could’ve solved U.K. farm and tech tax issues, offering better access for U.S. firms.

The S&P 500 rose 0.6% on May 8, showing some hope. U.S. ranchers and British carmakers like Jaguar Land Rover gained, but the American Automotive Policy Council noted USMCA partners face higher tariffs, hurting competition.

The deal shows Trump’s focus on quick agreements to ease tariff pressure. The U.K. was an easy partner, but bigger nations like China may be tougher. The U.K.-India deal, cutting tariffs on 90% of goods, shows a global shift the U.S. isn’t matching.

The TPP would’ve given near-zero tariffs and clear rules, boosting U.S. trade in Asia and countering China. The U.S.-U.K. deal’s vague terms and Trump’s history of breaking agreements create uncertainty. Trump’s tariffs raise costs for U.S. firms, while foreign deals like the U.K.-India give others an edge. With 95% of consumers abroad, U.S. businesses may struggle to grow globally.

ECONOMY
Kraft Heinz invests $3B in U.S. factories

Despite facing sluggish consumer sentiment and cutting its sales forecast, Kraft Heinz is betting big on its future. The ketchup and mac-and-cheese giant is investing $3 billion in their largest U.S. plant upgrade in a decade to boost efficiency, cut costs, and speed up product innovation.

While tariffs and economic headwinds loom, the company aims to fortify its domestic production and defend market share. Nearly all Kraft Heinz products sold in the U.S. are made locally, with tomatoes from California and potatoes from Idaho.

The move is expected to generate 3,500 construction jobs, though no long-term hiring plans are in place. It also follows a $400M investment in an Illinois distribution centre. Kraft Heinz joins Mars, Kimberly-Clark, and Anheuser-Busch in doubling down on American manufacturing.

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ENERGY
Aramco strikes $90B in U.S. deals

During President Trump’s Gulf tour, Saudi Aramco announced 34 preliminary agreements with U.S. companies worth up to $90 billion — one of its biggest single-day deal hauls. The push reflects Saudi Arabia’s bid to attract foreign investment and diversify beyond oil under its Vision 2030 plan.

Key tie-ups include MoUs with Nvidia for AI infrastructure, ExxonMobil to upgrade their SAMREF refinery, Amazon Web Services for digital and low-carbon collaboration, and Qualcomm for industrial network enhancements. Aramco also pledged $3.4B to expand its Texas-based Motiva refinery and deepened ties with financial giants like BlackRock, Goldman Sachs, and PIMCO. Aramco, the kingdom’s economic engine, is positioning itself not just as an oil leader, but as a global industrial and tech player.

AI & TECHNOLOGY
U.S. scraps AI chip limits, boosts Nvidia

Nvidia just got a major boost. The U.S. government has scrapped the AI Diffusion Rule—a regulation that would’ve curbed exports of U.S.-made AI chips—just days before it was set to take effect. The reversal follows Nvidia CEO Jensen Huang’s high-profile appearance with Donald Trump at a U.S.-Saudi investment summit, where AI investments were on the table.

The dropped rule would have complicated Nvidia’s grip on 90% of the AI chip market and strained U.S. ties with allies. The Commerce Department called the restrictions a risk to innovation and diplomacy, promising a revised policy "in the future."

Meanwhile, the U.S. cracked down on Huawei’s rival Ascend AI chips, warning that global use could violate export laws. The move reinforces Nvidia’s dominance—at least for now—as Washington keeps a tight grip on AI tech.