Sir Keir Starmer, leader of the UK Labour Party, has been busy laying the groundwork for a post-Brexit trade deal with the United States. Both countries are walking a tariff-laden tightrope, riddled with economic trade talks and aggressive maneuvers. Recent discussions between Starmer and former President Donald Trump were characterized as “ongoing and productive,” highlighting a mutual interest in advancing trade relations despite current challenges.
The US has so far implemented a 10% baseline punitive tariff on all UK exports. This reduction applies to many products. Except the 25% tariff applies today to very few imports, limited specifically to cars, steel and aluminium. Until now, this change has sparked deep concern across UK industrial sectors. The UK government is reportedly busy trying to negotiate around these tariffs. They are working to put in place an economic agreement with the US that will help build a better trading climate.
In response to the US tariffs, the European Union has placed counter-tariffs on American exports. This move further complicates the already multifaceted transatlantic trade dynamic. Just as Canada has already started to make its own retaliatory countermeasures, we have seen an overall move towards more protectionist retaliatory tariffs internationally.
On their most recent visit, Starmer and Trump went well beyond trade discussions to tackle the administration’s most vexing geopolitical challenges. We spoke about enacting real accountability for the people of Ukraine. Our concerns about Iran, and a look back at recent actions taken against the Houthis in Yemen. These issues are a reminder of the inextricable link between trade and international diplomacy.
US Vice-President JD Vance is excited about the prospect of a major new wartime trade deal with the UK. He did add that there is a “good chance” for coming to an agreement. This mood echoes the negotiations currently underway to set up a strong economic partnership between the two countries.
No 10 Downing Street emphasized the importance of “free and open trade and the importance of protecting the national interest,” reflecting the UK government’s commitment to securing favorable terms in its negotiations. Tariff policies are playing a huge role right now. The World Trade Organization estimates that global trade will shrink directly as a result of these measures by 1.4%.
As these discussions evolve, Sir Keir Starmer is understandably optimistic that a compromise acceptable to both economies can be found. The future of these negotiations has the potential to redefine trade relations between the UK and US for years to come.