It’s the most closely-held secret in government: What concessions are Sir Keir Starmer prepared to offer Donald Trump when he strikes a trade deal with the US?
Starmer is maintaining his turn-the-other-cheek diplomacy with Washington, declining to retaliate over Trump’s decision to impose 10 per cent tariffs on goods exported to the US, and 25 per cent tariffs on UK car and steel exports. Instead, Starmer is offering concessions on areas such as digital taxes and agriculture.
This week, JD Vance said he thinks a beneficial US-UK trade agreement is achievable. The US vice-president said officials are “certainly working very hard with Keir Starmer’s government” on a trade deal, adding to UnHerd that it is an “important relationship”.
By international standards, the UK fared relatively well out of the tariffs debacle even as turbulence has rocked the global stock market. But something bigger than money was lost: trust. The idea of the Special Relationship has also vanished quicker than you can say “wiped out pension funds”.
According to Alan Winters, Professor Emeritus of Economics and Fellow of the UK Trade Policy Observatory, it could be a long time before the US can be trusted again.
“Trump has destroyed trust, and no one is going to get over that for a long time. People are not going to trust the US to be a reliable partner anymore, so we won’t ever restore the status quo and see trust return, or at least not this decade,” he told The i Paper.
UK Government sources say recent US trade talks are progressing well. A deal would address more than tariffs; it would include trade on goods and services. Calling it a UK “trade deal” would be deceptive, though. It’s an “economic deal” that lowers tariffs. Nevertheless, it marks a major progress for the UK in its efforts to strengthen trade relations with America post-Brexit. If successful, it could show Starmer’s approach to US diplomacy in a favourable light.
Inside Government, there are tight lips and disciplined messaging – officials have been told not to give a running commentary on how the talks are going. That’s because everyone from No 10 down to Whitehall is well aware of how capricious the Trump administration is and how any British pitch-rolling could turn the talks negative and even lead to the US tearing up a deal.
A near wipeout of federal employees means the US administrative pyramid is sharp and pointed. There are a handful of people who have Trump’s ear, even fewer who speak for him, and only one guy at its very tip – Trump himself.
No one should be lulled into a false sense of security that Vance is suddenly playing nice. He aptly demonstrated that Trump’s ideas of liberty, free speech, and role of government differ from ours when he laid into his hosts at the Munich Security Conference in February.
The US administration has let it be known it has its eyes on British free speech regulations. Last month’s security failure on messaging service Signal also gave strong clues as to how Vance really sees Europe: “I just hate bailing Europe out again,” he told the Secretary of Defense, Pete Hegseth, in the group chat that accidentally included a journalist.
Europe’s low favourability in the eyes of Vance should be a concern, given he could be a potential future president. The challenge before Starmer is to evaluate the scope of achievable change, to separate rhetoric from reality – no mean feat – and consider how much leeway he has.
The Labour government was pleasantly surprised to find their fresh negotiations with Brussels have benefited from the experience of haggling under the Conservatives, with the team’s tough approach credited to the example of arch-Brexiteer and Tory peer David Frost. Perhaps they can use it over the pond, too. Trump clearly enjoys negotiating, praising Starmer for his hard dealing when the two leaders met in the White House.
When it comes to the US deal, the specifics will be fascinating and controversial. Look out for deals on digital services (the UK’s current tax system affects US tech companies) and any opt-outs that could affect the safety of children online. Could the UK lower trade barriers for US vehicles in exchange for a reciprocal reduction? What impact will this have on UK road safety standards?
Could the UK ease trade restrictions for US farmers selling their produce in the UK? And if that’s the case, how will this affect struggling UK farmers? Is there a chance that UK food standards, presently matching those of the EU, will be lowered? The UK wants better access to the American market for its farmers, but only if US products meet UK standards.
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A deal could even be signed within a fortnight or three weeks, according to a UK source. The Department for Business and Trade declined to comment.
With car manufacturers warning ministers the industry could need Covid-levels of financial support, it leaves open the possibility Parliament will be bounced into accepting a hurried deal.
Chairman of the Business and Trade Committee Liam Byrne told The i Paper his panel scrutinised the UK’s trade deal with both Australia and the 12-nation trans-Pacific partnership, the CPTPP. They want Starmer to give MPs at least 15 sitting days to examine the deal, rather than whipping it through the House of Commons at warp speed.
“In both of those reports, we basically said, ‘Look, it’s in Parliament’s interest for us to be able to have a vote on a substantive motion’. In an ideal world, Parliament would have seen and signed off on the negotiating mandate, which is what many countries do, but not ours. What we would ask for is an up/down vote. It’s impossible for us to know what the issues are, because it’s basically a black box.”
But there is a wider issue here and that’s whether Trump can be trusted at all. Liberal Democrats leader Sir Ed Davey has said Trump is “no longer a reliable ally”, adding any trade deal with the US should be “properly examined” by ministers
Labour MPs are already worried about how long any deal between Starmer and Trump would last. “Even if we get a deal, it could last a day? A week? A year? But at some point, he’ll pull the plug. He can’t be trusted to respect the law,” one frontbench Labour MP told The i Paper. Another Labour MP put it more succinctly: “Well, you can only trust consistency, and there’s certainly none of that anymore.”
All this puts Starmer in a potentially difficult position if Britain has rushed a dodgy deal to earn a carve-out from the tariffs. The Labour Party shudders at the institutional memory of when they were rushed along in the US’s wake towards the Iraq War. Trust in Trump has vanished all together.
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