Trump May Announce a Trade Deal Between the US and the UK on Thursday; SHFE Tin Prices Fluctuate Upward [[SMM] Tin Midday Review]

Daily Commentary on the Most-Traded SHFE Tin Contract on May 8, 2025

The most-traded SHFE tin contract (SN2506) fluctuated upward today. Boosted by the news that US President Trump was expected to announce a trade agreement between the US and the UK on Thursday, the contract continued to rise in the morning session, eventually closing at 263,000 yuan/mt, up slightly by 0.42% from the previous trading day. Trading volume and open interest decreased slightly by 1,443 lots, with total open interest reaching 30,500 lots.

The New York Times, citing three sources familiar with the matter, reported that US President Trump was expected to announce a trade agreement between the US and the UK on Thursday. This agreement would be the first trade pact announced by Trump after imposing hefty tariffs on dozens of US trading partners. Previously, he had temporarily suspended some tariff measures to allow other countries to reach agreements with the US. The conclusion of the US-UK agreement holds significant importance for both countries, as they have long sought closer economic cooperation. Details of the agreement have not been immediately disclosed, but the two countries had discussed reducing UK tariffs on US cars and agricultural products, as well as eliminating taxes on US tech companies.

It remains unclear whether the agreement has been finalised or if both sides have merely announced a framework agreement, with negotiations to continue in the coming months. The Trump administration has been trying to urge other countries to swiftly reach trade agreements with the US. On April 2, Trump imposed punitive tariffs on dozens of trading partners but quickly backtracked after panic in the bond market. Trump suspended most tariffs for 90 days to allow the US to negotiate with other countries. However, he still retained a 10% global tariff, including on the UK. Unlike other countries, the UK was not subject to higher "reciprocal tariffs" because its imports from the US exceeded its exports. US government officials have stated that they do not intend to eliminate this 10% tariff in the trade agreement. The UK also faces a 25% tariff imposed by Trump on foreign steel, aluminum, and cars, which it has been urging the US to remove.

Trump's interest in reaching a trade agreement with the UK dates back to his first term, when his advisory team negotiated with the UK but ultimately failed to reach an agreement. Since Brexit, the UK has also viewed a trade agreement with the US as a means to offset the impact of weakened relations with Europe. During the Biden administration, the UK continued to push for an agreement with the US but made little progress. For UK Prime Minister Starmer, the agreement would prove that his careful cultivation of relations with Trump has paid off. During his visit to the White House in February this year, Starmer also brought an invitation from King Charles III of the UK for Trump to make another state visit to the UK. The Trump administration also appears to be on the verge of reaching agreements with India and Israel and is continuing negotiations with countries such as South Korea, Japan, and Vietnam.

Spot market: Trading in the spot market was sluggish this morning. Affected by the rising prices, the willingness of downstream and end-users to purchase was suppressed. Most traders reported fewer inquiries from customers in the morning, and trading volume declined somewhat.