The UK and US are expected to agree a deal to reduce tariffs on Thursday after Donald Trump promised a “major trade deal” with a “highly respected country”.
A month after the US president’s so-called liberation day tariffs came into effect, British negotiators are in Washington and are believed to have finalised a carve-out for the UK.
In a coup for Sir Keir Starmer, Mr Trump is expected to unveil the agreement at an Oval Office press conference on Thursday. The US president promised a "very big and exciting day" for relations between Britain and the US.
Mr Trump added that the agreement signed is “a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come”.
Writing on Truth Social, he said: “Becuase of our long time history and allegiance together, it is a great honour to have the United Kingdom as our FIRST announcement.”
Speaking on Thursday, Sir Keir said: “As you know talks with the us have been ongoing and you will hear more from me about that later
“But make no mistake, I will always act in our national interest for workers, businesses and families to deliver security and renewal for our country.
“Because the world has changed, decisively.”
Mr Trump took to his Truth Social platform to announce he would hold a news conference at 10am local time (3pm BST) about a “major trade deal with representatives of a big, and highly respected, country”.
The government has been pursuing a deal with the US to reduce the impact of sweeping tariffs imposed by Mr Trump last month, which placed a 10 per cent levy on all UK exports and a 25 per cent charge on steel, aluminium and cars.
Reports have previously suggested a deal could see the UK reduce some tariffs on US products, as well as change the digital services tax that currently affects mainly US tech companies.
But the government has ruled out lowering food standards to allow more US agricultural products into the country, or watering down the Online Safety Act, which some in the US regard as placing restrictions on freedom of speech.
It would mark the first deal agreed upon since Mr Trump’s sweeping tariffs last month wreaked havoc on global markets and put the UK’s public finances in jeopardy.
The deal would be a vindication of Sir Keir’s approach to the US president, having been reluctant to criticise Mr Trump and senior members of his administration.
As Labour reels from a bruising set of local election results, it is also a fresh boost for the prime minister, coming hot on the heels of a major agreement struck with India on Tuesday.
The US and UK have been holding talks over a potential trade deal, with chancellor Rachel Reeves saying the government has been working “flat out” to secure an agreement that would mitigate the impact of the tariffs.
Jonathan Portes, professor of economics and public policy at King's College London, told The Independent the trade deal would be “damage limitation rather than an economic boost”.
“That is, it is likely to limit the Trump tariffs, but our exporters will probably still be facing higher tariffs overall than they were last year,” he said.
Professor Portes added: “This will clearly be a relief to companies and the government deserves credit, but Trump’s policies overall remain a huge downside to the global economy and hence to the UK.”
The defence secretary declined to comment on reports that a US-UK trade deal would be announced on Thursday.
John Healey told Times Radio: "It's certainly true that the US is an indispensable ally for the UK, both on economic and national security grounds.
"It's also true that since the prime minister visited the White House in February we have been in detailed talks about an economic deal.
"But I have to say, throughout that period, ministers like me have been keen to give the negotiations the space to get the best possible deal for the UK.
"So, we just haven't been giving a running commentary on developments or timelines, so I'm not going to start now."
The Liberal Democrats called for parliament to be given a vote on any US trade agreement, with a warning it could “undermine our farmers or give tax cuts to US tech billionaires”.
Lib Dem Treasury spokesman Daisy Cooper said: “A good trade deal with the US could bring huge benefits, but Liberal Democrats are deeply concerned that it may include measures that threaten our NHS, undermine our farmers or give tax cuts to US tech billionaires.
“If the government is confident the agreement it has negotiated with Trump is in Britain’s national interest, it should not be afraid to bring it before MPs.”
The UK announced it had come to terms on a trade deal with India on Tuesday, which will mean dramatic tariff reductions on scotch whisky and car exports to the country.
Levies on aerospace, electricals and other food products will also fall under the agreement, while UK consumers are expected to benefit from tariffs being reduced on some Indian goods such as clothing imported to the country.
Announcing the deal, prime minister Sir Keir Starmer said: “We are now in a new era for trade and the economy. That means going further and faster to strengthen the UK’s economy, putting more money in working people’s pockets.”
He added: “Today we have agreed a landmark deal with India – one of the fastest growing economies in the world, which will grow the economy and deliver for British people and business.”
Indian prime minister Narendra Modi described it as a “historic milestone” and an “ambitious and mutually beneficial” trade agreement that will “catalyse trade, investment, growth, job creation, and innovation in both our economies”.
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