By Brian Swint and George Glover

Investors have been waiting on tenterhooks for weeks to learn how big President Donald Trump's tariffs will be when they finally take effect. They should get more insight today.

Trump said that a "major trade deal" will be announced at 10 a.m. on Thursday, one that will be the "first of many," in a post on the Truth Social social-media platform on Wednesday.

The agreement will be "a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come," he added in a follow-up post early Thursday.

"Because of our long time history and allegiance together, it is a great honor to have the United Kingdom as our FIRST announcement. Many other deals, which are in serious stages of negotiation, to follow!" he wrote.

Wall Street may view the new agreement as a warm up to arrangements with other countries that are more important to U.S. companies.

"The reality is that the market and especially tech investors will view this announcement as a yawner and is not moving the needle," said Dan Ives, a strategist at Wedbush who covers technology firms. The "laser focus" will be on "China negotiations, India, and Vietnam," he added.

Trump is expected to announce the framework for an agreement with tariff adjustments for the U.K., according to The Wall Street Journal.

While details of the arrangement are still scarce, what's likely to be most important for the stock market is whether it will reduce the 10% levies that imports from the U.K. would have been subject to under Trump's so-called reciprocal tariff plan. The hope is that it will provide a template for further arrangements that can bring overall levies down to minimal levels before the expiration of the pause on the tariff plan on July 8.

Other countries negotiating with the Trump administration will be able to study the arrangement to decide how much is worth conceding in negotiations. In theory, Britain should get the best deal possible.

For one thing, the U.K. has a trade surplus in goods with the U.S. recently, meaning that it buys more goods from America than it sells -- one of Trump's goals with tariffs is reducing U.S. trade deficits. Furthermore, the U.K. is only the fifth-biggest purchaser of U.S. exports, behind Canada, Mexico, China, and Japan. And the European Union, which represents 20 countries including Germany and France, will be negotiating as a bloc.

There's a risk that the deal may not change much in practice. Britain would like a reduction in the U.S.'s 25% steel and automobile tariffs, but the 10% baseline tax may remain in place, the Journal reported, citing unnamed people familiar with the talks. In return, the U.K. may offer concessions on a digital tax put on big U.S. technology firms, the paper said.

Still, any reprieve would be likely to help U.K. aerospace companies like Rolls-Royce and BAE Systems. Pharmaceutical company AstraZeneca stands to gain, as does spirits maker Diageo, which owns Johnnie Walker whiskey and Tanqueray gin.

But today, the important point is that trade deals to reduce tariffs are possible. Stocks have largely recovered losses since Trump's April 2 "Liberation Day" announcement of widespread taxes on imports, which they then delayed a week later. In the longer term, investor confidence will only be able to grow if this deal is followed up by more, particularly with the biggest U.S. partners.

Maersk Cuts Container Market Outlook

A.P. Moeller-Maersk stood by its full-year earnings guidance Thursday, but warned that trade tensions could hit global container market volumes.

The Danish shipping giant still expects earnings before interest, taxes, depreciation and amortization of between $6 billion and $9 billion in 2025, but is now forecasting global container volume growth of between a 1% fall and a 4% rise. It had previously expected an expansion of 4%.

"With trade tensions flaring up and uncertainty on the rise, global supply chains are once again in the spotlight," CEO Vincent Clerc said.

The company's results are typically seen as a bellwether for global trade, so its gloomy forecast on volumes will do nothing to ease fears that ongoing tensions between the U.S. and China will weigh on demand. Maersk shares slid 1.4% in early trading.

Toyota Warns Tariffs Will Dent Profit

Toyota said that its annual profit will plunge on Thursday, warning that U.S. tariffs could dent its bottom line.

The Japanese car maker's quarterly earnings topped analysts' forecasts, but it now expects its profit for the current fiscal year to tumble 35% to 3.1 trillion yen ($21.4 billion). It said the impact of Trump's levies in April and May had "been tentatively factored in" to its forecast for now. Toyota's American depositary receipts dropped 2.2% in early trading.

Tariffs Keep Fed on Hold

Yesterday's press conference following the Federal Reserve interest-rate decision confirmed that tariffs are the greatest unknown for policymakers. Chair Jerome Powell and colleagues kept rates on hold and said they're waiting before making the next move.

For now, the economy is strong enough to give the Fed time. Markets are pricing in an 80% chance for another decision for unchanged rates in June and a 55% chance of a quarter-point cut in July.

Write to Brian Swint at brian.swint@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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May 08, 2025 07:42 ET (11:42 GMT)

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