Once hailed by President Donald Trump, this new trade agreement between the United States and the United Kingdom hasn’t exactly gone as planned. He refers to it as a “full and complete” one. This announcement comes at a potentially critical moment for Trump. He seeks to build on the economic progress made thus far while dealing with substantial economic headwinds. The specifics of the transportation trade deal should be announced in the coming weeks, as both governments continue to push to cement terms.
On Wednesday, a delegation of senior British trade negotiators touched down in Washington. Their arrival is a sign of an exciting ramp-up in discussions to finalize that agreement and solidify the concept. Earlier this week, Trump teased out some sort of big news on trade via his Truth Social platform. He indicated that it would entail a “large and very well-regarded country.”
The deal is likely to hone in on increasing tariff cuts on strategic goods such as British steel, aluminum, and cars. Earlier this month, Trump announced major tariffs on a number of trade partners. To celebrate the occasion, he declared April 2 “Liberation Day.” These tariffs have alarmed most economists with their potential to increase prices, inhibit growth and employment.
As per the sources privy to the negotiations, Trump plans to announce the outline of the new deal any day now. The urgency of these reauthorization talks has only increased. UK Prime Minister Keir Starmer speaking to the media before trade talks with the US on Thursday. UK business and trade department officials are getting £50 million worth of deal closed. As such, they hope to have it done in time for the next UK-EU summit on May 19.
The US has been making its case for the past several weeks on the merits to British officials. They are hoping to get a deal that will make future trade relations a little less contentious. Both countries are keen to reduce tariff barriers, particularly on auto imports from the US and agricultural products from the US. On this, Starmer is absolute. He will not settle on food production standards to increase trade with the US for agribusiness products.
He emphasized the historical ties between the two nations, stating, “Because of our long time history and allegiance together, it is a great honor to have the United Kingdom as our FIRST announcement.”
“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.” – Donald Trump
Trump’s administration has been under fire for its tariff policies, even by cabinet officials and industry titans concerned with the long-term economic effects these tariffs will have. Jerome Powell, the chair of the US central bank, conveyed such a warning just last week. He warned that maintaining elevated tariffs would increase costs, hamper economic expansion, and lead to higher unemployment.
Then-candidate Trump pushed back hard against Powell’s worries. He took to social media, denigrating Jerome Powell as a “FOOL” having gone “too late” and lost as the economy crumbled. Other than that, I could like him better!
Yet the stage is set by a highly contentious backdrop of recent tariff policies. On both sides there’s a strong willingness to get and the upside of this historic trade agreement. The UK currently has the opposite situation, a £38 billion surplus in the latest year, exporting more to the US than importing from there. This new, unusual dynamic makes for a rare opportunity in negotiations. The UK has yet to meet reciprocal tariffs, therefore making our leverage greater.
As negotiations progress and information trickles in, Trump and Starmer will have this free-trade-creating boondoggle to latch onto. For both of them, it marks an important and new beginning in their respective political sagas.
As discussions continue and more information becomes available, both Trump and Starmer are expected to leverage this trade deal as a pivotal moment in their respective political narratives.
“Look, they want to make a deal so badly. That, I can tell you. But we’ve been talking.” – Donald Trump