Sir Keir Starmer has hailed “productive” trade talks between the UK and the US in a 35-minute call with President Trump as momentum builds towards a deal.
Britain has emerged as one of the countries most likely to strike a trade deal to reduce US tariffs along with Australia, India, Japan and South Korea.
The prime minister, who has been away in southern Europe this week, interrupted his Easter holiday to intervene in the talks, telling Trump the UK was committed to “free and open trade”.
He described the negotiations as “ongoing and productive”. He reiterated the importance of protecting the UK’s “national interest” after ministers ruled out relaxing food standards to allow imports of American chlorinated chicken and hormone-treated beef.
The pair also discussed the war in Ukraine after Marco Rubio, the US secretary of state, threatened to withdraw US support for peace talks. During last year’s election campaign, Trump vowed to end the conflict within “24 hours” of entering the White House but in recent weeks he has appeared increasingly impatient with the complexity of the task.
After recent US diplomatic efforts to slow Iran’s nuclear enrichment programme, Starmer and Trump also talked about the threat posed by Tehran and the recent American military action against the Houthi rebels in Yemen.
The call took place as Rachel Reeves, the chancellor, prepares to head to Washington next week, where she will lobby for exemptions for British industry from US duties.
British negotiators have offered to scrap a 2 per cent digital services tax and water down online safety laws in exchange for relief from tariffs.
• US urges UK to drop £800m digital services tax to avoid Trump tariffs
However, Trump warned this week that “substantial” baseline tariffs would remain regardless of countries’ diplomatic efforts to secure bespoke deals. He also said that he was in “no rush” to conclude agreements, adding to the uncertainty about when a deal might be done. “Predicting dates is a mug’s game,” one British source said.
Trump’s baseline tariff is 10 per cent in addition to 25 per cent levies on aluminum, steel and cars. The US was Britain’s largest export market for cars in 2023, fuelled by demand for luxury brands including Aston Martin, Rolls-Royce and Land Rover. Trump has also threatened to impose tariffs on pharmaceuticals, one of Britain’s largest exports to the US. Big British drugs companies include AstraZeneca and GlaxoSmithKline and sales of medicines to the US amounted to £8.2 billion in 2023.
This month, Trump suspended his heaviest tariffs on countries including Vietnam, Lesotho and Iraq — which he dubbed “reciprocal” levies — after his initial announcement of far-reaching duties unleashed tumult on world stock markets. However, he has maintained 145 per cent tariffs on China.
However, 56 nations as well as the EU face the implementation of steep “reciprocal” tariffs when Trump’s 90-day pause ends at a minute past midnight on July 9. More than 75 countries in all are trying to win concessions on the 10 per cent baseline and sectoral tariffs, an overwhelming task for Trump’s team of negotiators.
Trump himself is thought to be not particularly worried about missing his 90-day deadline, which he could simply extend, while he has made clear that he will make deals only on terms favourable to the US. “We’re listening and we’re going to be very fair but we’re the one who really sets the deal and that’s what we’re going to be doing,” Trump said in his Oval Office press conference with Giorgia Meloni, the Italian prime minister, this week.
Diplomats believe the varying aims of different members of Trump’s team make negotiating more difficult, with some US officials more wedded to tariffs as a long-term policy than others.
Yet another complication is that Trump has the final sign-off on agreements and his own attitude seems to shift between his “master dealmaker” persona to that of the bottom-line businessman who wants to generate as much revenue as possible.
Trump’s declaration on Thursday that he wants a “significant” baseline tariff to remain, apparently in almost all cases, has led negotiators to concentrate on reducing his 25 per cent charge on imported cars, steel and aluminium, as well as seeking to head off similar duties on pharmaceuticals.
