Sir Keir Starmer was at home in Downing Street, watching Arsenal lose in the Champions League, when he got a call from Donald Trump that he thought presented the chance to snatch victory from the jaws of trading defeat.
The president’s call was a characteristic last-minute flex intended to squeeze a little more out of the prime minister.
It was enough to persuade Sir Keir and his business secretary Jonathan Reynolds, dining with industry bosses across London at Mansion House, that they had to seize the opportunity.
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Key details of ‘historic’ trade deal
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The result, hurriedly announced via presidential conference call, is not the broad trade deal of Brexiteer dreams, and is certainly not a free-trade agreement.
It’s a narrow agreement that secures immediate relief for a handful of sectors most threatened by Mr Trump’s swingeing tariffs, with a promise of a broader renegotiation of “reciprocal” 10% tariffs to come.
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Most pressing was the car industry, which Mr Reynolds said was facing imminent announcements of “very difficult news” at Britain’s biggest brands, including Jaguar Land Rover, which sounds like code for redundancies.
In place of the 25% tariffs imposed last month, a 10% tariff will apply to a quota of 100,000 vehicles a year, less than the 111,000 exported to the US in 2024, but close enough for a deal.
It still leaves the car sector far worse off than it was before “liberation day”, but, with one in four exports crossing the Atlantic, ministers reason it’s better than no deal, and crucially offers more favourable terms than any major US trading partner can claim.
For steel and aluminium zero tariffs were secured, along with what sounds like a commitment to work with the US to prevent Chinese dumping. That is a clear win and fundamental for the ailing industries in Britain, though modest in broad terms, with US exports worth only around £400m a year.
In exchange, the UK has had to open up access to food and agricultural products, starting with beef and ethanol, used for fuel and food production.
In place of tariff quotas on beef that applied on either side (12% in the UK and 20% in America) 13,000 tonnes of beef can flow tariff-free in either direction, around 1.5% of the UK market.
The biggest wins
Crucially, sanitary and phytosanitary (SPS) production standards that apply to food and animal products, and prevent the sale of hormone-treated meat, will remain. Mr Trump even suggested the US was moving towards “no chemical” European standards.
This may be among the biggest wins, as it leaves open the prospect of an easing of SPS checks on trade with the European Union, a valuable reduction in red tape that is the UK’s priority in reset negotiations with Brussels.
Farmers also believe the US offers an opportunity for their high-quality, grass-fed beef, though there is concern that the near-doubling of ethanol quotas is a threat to domestic production.
Technology deals to come?
There were broad commitments to do deals on technology, AI and an “economic security blanket”, and much hope rests on the US’s promise of “preferential terms” when it comes to pharmaceuticals and other sectors.
There was no mention of proposed film tariffs, still unclear even in the Oval Office.
Taken together, officials describe these moves as “banking sectoral wins” while they continue to try and negotiate down the remaining tariffs.
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The challenge from here is that Mr Trump’s “reciprocal” tariff is not reciprocal at all. As commerce secretary Howard Lutnick proudly pointed out in the Oval Office, tariffs on US trade have fallen to less than 2%, while the UK’s have risen to 10%.
As a consequence, UK exporters remain in a materially worse position than they were at the start of April, though better than it was before the president’s call, and for now, several British industries have secured concessions that no other country can claim.
From a protectionist, capricious president, this might well be the best deal on offer.
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Quite what incentive Mr Trump will have to renegotiate the blanket tariff, and what the UK has left to give up by way of compromise, remains to be seen. Sir Keir will hope that, unlike the vanquished Arsenal, he can turn it round in the second leg.
