Keir Starmer and Donald Trump signed a “historic” deal to cut US tariffs on British-made steel, aluminum and cars and increase trade on farming, aerospace and tech – with the Prime Minister claiming it would protect thousands of UK jobs.
After weeks of intensive negotiations, Britain became the first country to secure carve-outs from Trump’s global “Liberation Day” tariff regime.
In a press conference broadcast live from the Oval Office with Keir Starmer patched in from a Jaguar LandRover factory in Solihull Trump hailed the agreement as “a great deal for both countries”.
“The US and UK have been working for years to try and make a deal and it never quite got there.
“It did with this Prime Minister, so I want to just congratulate you.”
Sir Keir said: “With this president and this Prime Minister we’ve managed to achieve what many people tried to achieve for many years, and I’m really pleased.”
The deal will see levies on British steel and aluminium exports to the US cut from 25 per cent to zero, while for cars it will be cut to 10 per cent.
It includes a $10bn deal to for the UK to buy Boeing aircraft announced at the press conference by US commerce secretary Howard Lutnick, who added Rolls Royce engines, used in the aircraft, would be excluded from tariffs.
The agreement also eased fears among UK farmers, with British red lines upheld on banning US chlorinated chicken and hormone-treated beef, while UK and US agricultural sectors will gain preferential access to each other’s markets.
The “economic prosperity deal” – described by the US president as a “big economic security blanket” for both countries – did not, as expected, include concessions by the UK to water down the Digital Services Tax on tech firms, while there was also no weakening of the British regime on online harms, in what will be greeted as good news by campaigners.
It will also grant new access for the British tech sector to the lucrative American market, in what will be seen as a personal victory for UK ambassador to Washington Peter Mandelson, who had prioritised that industry as part of the talks.
Yet the deal is only a partial agreement and leaves question marks over the pharmaceutical industry, which had hoped to be included as part of an agreement.
Film tariffs threat
And Starmer admitted that UK negotiators had not succeeded in persuading Trump to remove his threat on tariffs for the film industry, which could potentially damage the sector in Britain.
Asked by The i Paper whether the levies were now off the table, the Prime Minister replied: “Obviously there aren’t any tariffs in place on film at the moment. Of course, we’re discussing it with the President’s team. We’ll take the same approach as we’ve taken on other issues.
“For me, what matters is acting in the national interest and making sure that everything that we do is good for working people in this country… whether it’s steel and aluminium, whether it’s car building, whether it’s pharmaceuticals or film, we are brilliant in these things.”
Negotiations to continue
But ministers insist that the current deal is only part of the story – and that negotiations with the US will continue to lower or remove Trump’s 10 per cent “reciprocal” rate on all UK goods – which could bear fruit in the coming weeks and months.
Trade deal at a glance
– American tariffs on British cars fall to 10% for the first 100,000 vehicles exported to the US, while tariffs on steel are scrapped.
– The US has removed the 25% tariff rate on UK steel and aluminium exports, reducing the additional trade barrier for these goods to zero.
– Beef exports will be allowed both ways, with officials insisting there will be no weakening of food standards for meat sent to Britain.
– The UK will have “preferential treatment whatever happens in the future” when it comes to pharmaceuticals, as Mr Trump considers import taxes on drugs and medicines.
– The UK will also get preferential treatment in any further tariffs Mr Trump announces on national security grounds as part of his drive to protect US business.
The British negotiating team is hoping to keep the talks open and will seek to convince the President that the existing deal can be built on.
Sources told The i Paper that despite Trump’s declaration that the agreement as it stands is “maxed out”, No 10 wants to strike further deals in the coming months that would push the tariffs down.
Another government source said it was “important for us to bank progress made at this stage”, adding: “There is quite a lot of work to do but we have made a huge amount of progress so far.”
A chaotic announcement
The choreography around the announcement of the deal was plunged into chaos after it emerged Trump had called the Prime Minister late in the evening on Wednesday to tell him it was ready to go.
Business Secretary Jonathan Reynolds said he was speaking at the Mansion House in London when he was called by British negotiators at 8pm.
There was then a scramble to avoid a clash with commemorations for the 80th anniversary of VE Day.
Reynolds admitted Trump’s 2 April tariff regime had been “challenging” for every country in the world adding it was “only this PM and this president who have managed to get a breakthrough”.
Keir Starmer speaks on the phone to US President Donald Trum (Photo by Alberto Pezzali-WPA Pool/Getty Images)The deal will “commit to cooperation and coordination on market practices from third countries and to cooperation and coordination export controls and investment security”, Reynolds said.
He refused to comment whether this would mean the UK and US joining forces to block trade from China but added: “We have shared national security priorities with the US. We have the same interest in the same outcomes in relation to that. It is particularly appropriate to be able to agree that with the US on the 80th anniversary or VE Day, great symbolism there, as the President said.”
‘We’ve been shafted’ says Kemi Badenoch
In the Commons, trade committee chair Liam Byrne hailed the deal, saying it appears a “small, commonsense retreat on duties and agriculture have unlocked a major reprieve for tens of thousands of jobs in our car and steel industries”.
Trade Minister Douglas Alexander suggested the UK side has ensured that this does not damage the EU reset, and that the government has taken a “twin-track” approach to both sets of negotiations.
But Tory leader Kemi Badenoch said: “When Labour negotiates, Britain loses.
“We cut our tariffs — America tripled theirs. Keir Starmer called this ‘historic.’ It’s not historic, we’ve just been shafted!”
But Reform UK leader Nigel Farage welcomed the deal as a “benefit of Brexit”. He told the BBC: “The fine details of this deal will come out in time but this is a big step in the right direction on VE Day.”
Deal a ‘real win’ for UK
Economists have broadly welcomed the trade deal agreed between the UK and the US – while stressing that it has not resolved all the issues affecting the trade relationship.
From across the political spectrum, most experts said the agreement was a “real win” which showed the Government had “played its hand well”, even as financial markets offered a relatively muted response.
Ben Ramanauskas, a former Whitehall official who is now a senior fellow at the centre-right think-tank Policy Exchange, told The i Paper: “This trade deal between the UK and the US should be welcomed. The fact that exports of products such as steel and aluminium will be exempt from Trump’s tariffs while levies on British cars will be cut is a real win for British firms and workers.”
Marley Morris of the left-leaning IPPR added: “The deal does not remove Trump’s 10 per cent universal tariff, but this was always unlikely. In an exceptionally unpredictable global trading environment, the Government has played its hand well.”
But Dan Coatsworth, an investment analyst at AJ Bell, warned: “The UK-US trade deal might look significant but markets weren’t impressed at first glance.”
He added: “Admittedly, it suggests the UK is at the front of the queue of countries in Trump’s good books. While the 10 per cent base tariff remains, relative to other countries this has to be taken as a win.”
Hugo Gye and Callum Mason
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