Trump backs full US-UK trade deal in boost for Starmer after weeks of talks
President Donald Trump said the US has secured what he described as a comprehensive trade agreement with the UK, the culmination of weeks of talks between the two allies and marking the first of his promised deals with countries around the world. The US President said in a post on his social media platform that Thursday would be an “exciting day” for the two nations, with the White House promising details in a press conference at 10 am in Washington.
“The agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come,” Trump wrote in a second post. “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!” Despite Trump’s language, any agreement is likely to be limited. The UK-US deal has never been billed as a full-scale free trade pact, which typically take years to negotiate. A UK official said Thursday’s announcement will set out general terms and focus on specific sectors. UK Prime Minister Keir Starmer is due to speak about the deal later on Thursday.
The pact will rely heavily on future commitments and leave in place the existing 10 per cent baseline tariff Trump has imposed on most countries, according to CNN, which cited anonymous US and UK government officials. With polls showing Americans souring on his economic stewardship, Thursday’s deal is a sign that Trump is seeking an off-ramp from his plan to raise US tariffs to their highest level in a century. The president signaled that “many other deals which, are in serious stages of negotiation,” would follow as he looks to topple barriers to US exports and calm market turmoil driven by the sweeping scope of his tariffs.
Hopes that a trade deal will lift the outlook for the UK economy briefly boosted the pound, but the gain fizzled out as investors waited for details. Stocks saw tentative gains while still lagging peers, and gilts outperformed European and US bonds ahead of the Bank of England monetary policy decision. Nevertheless, that the UK is the first country to secure a deal with the US is a win for Starmer, who’s likely to present it as a vindication of his diplomatic approach of refusing to overtly criticize Trump, holding regular phone conversations with the US president and promising him a second state visit to Britain. It comes just two days after the UK announced it had sealed a trade deal with India, Britain’s biggest such agreement since it left the European Union.
A US trade deal has long been held up as one of the great prizes of the UK’s departure from the European Union, but after British and US negotiators held five rounds of talks during the first Trump presidency, his successor, Joe Biden, suspended them. Thursday’s agreement — five years after Brexit — is likely to stop a long way short of the “all-singing, all-dancing” deal that former Tory Prime Minister Boris Johnson once said was possible. So far, US talks with several nations have centered around, at best, a top-line deal on commitments and intentions that may leave many details traditionally included in comprehensive trade agreements to be negotiated later. Other nations with talks at high levels with the US include Japan, India and Israel.
Whatever the terms announced, the UK is still likely to be in a worse economic position with its biggest individual trading partner than before Trump’s tariff war, providing potential attack lines for Starmer’s domestic political opponents. In intensive talks with their American counterparts, British envoys have focused on securing reductions in the most egregious tariffs — the 25 per cent imposed on steel, aluminum and the automotive sector — with an expectation that Trump’s base tariffs of 10 per cent on other products would remain.
With the Trump administration conducting an investigation into the pharmaceutical industry, Britain was also seeking to avoid the prospect of tariffs on drugs — a major export to the US. Trump’s more recent threat of tariffs on the film industry — another UK strength — added another sector for Britain to defend. An expansion of tariffs beyond goods is ominous for the British economy, which is dominated by its service sector. In exchange for US tariff reductions, UK ministers had been considering lowering some agricultural tariffs — while vowing to maintain food standards — and reducing an £800 million ($1.1 billion) digital services tax that largely falls on US tech companies. Closer trade on technology and cooperation on artificial intelligence was also in the cards.
For Starmer, there’s a tricky balance to be struck as he also seeks closer economic ties with the EU to repair some of the damage wrought by Brexit. The closer the Labour government aligns the British economy with the EU’s — as it promised to do in July’s election — the less room it has for maneuver to accommodate US demands on trade. While the US is the UK’s biggest individual trading partner, taking in £179 billion ($222 billion) of British goods and services a year, the EU market is almost double that. The UK and EU are working toward striking a deal on defense and security at a summit in London planned for May 19, with wider economic discussions also playing a factor.
In an earlier speech to mark the 80th anniversary of World War II. he described the US as “indispensable” to Britain’s economic and national security and said: “Make no mistake, I will always act in our national interest for workers, business, and families to deliver security and renewal.”
