A US trade deal could be signed this week as Keir Starmer scrambles to ease the pain of Donald Trump‘s tariffs.
Negotiators appear to be closing in on a package that could reduce the impact of the president’s eye-watering 25 per cent levies on car and steep imports.
The UK is also hoping to head off the prospect of an assault on the pharma sector with agreements on quotas.
The PM has been rushing to seal a pact with America before his big Brexit ‘reset’, due to be unveiled at a summit with the EU on May 19.
There are concerns that could enrage Mr Trump, who has claimed the bloc was created to ‘screw’ the US.
A recent report by the US Department of Agriculture noted that ‘dynamic’ alignment with Brussels food standards could ‘impact’ trade with the US.
A US trade deal could be signed this week as Keir Starmer scrambles to ease the pain of Donald Trump’s (pictured) tariffs
The PM has been rushing to seal a pact with America before his big Brexit ‘reset’, due to be unveiled at a summit with the EU on May 19
Overall trade in goods between the US and UK is largely balanced, with £59.3billion exported to the US and £57.1billion imported
According to the Financial Times, the package on the table includes quotas that could protect UK exports of cars and steel, as well as reductions in the headline rates.
In return Britain is expected to make concessions on a new ‘digital tax’, as well as lowering tariffs on US cars and farming products.
Touring broadcast studios this morning, Business Secretary Jonathan Reynolds did not deny an agreement could happen this week – although he stressed teams were still working.
One Labour MP close to Mr Reynolds told MailOnline that the shape of the deal was clear.
‘The terms are broadly there, they have been making good progress. But no-one knows what happens when you put stuff in front of Trump.’
Sir Keir and Mr Trump raised the prospect of a Transatlantic trade deal when they met at the White House in February – before the president unveiled his ‘Liberation Day’ tariff barrage.
Hopes have dwindled of getting an exemption from the ‘baseline’ 10 per cent charges on goods entering America.
Sir Keir has ruled out several concessions the US was thought to be looking for as the price of a deal.
These include reductions in food standards rules that limit imports of American agricultural goods and changes to online safety legislation that some US politicians believe limit freedom of speech.
Economists have warned that Mr Trump’s policies are set to spark a global slowdown and wreak havoc with Rachel Reeves’ attempts to revive growth. The president has rolled back on many of the more punitive levies he originally threatened amid a stock market plunge and rising costs of servicing the US debt mountain.
Sir Keir has repeatedly rejected suggestions that the UK will need to choose between partnerships with Europe or America, saying the national interest ‘demands that we work with both’.
The Trump administration is holding trade talks with countries including Canada, Mexico, Japan, Vietnam and India, as well as the EU.
There had been reports that the UK would be in the second tranche of agreements being targeted.
US Treasury secretary Scott Bessent told a congressional hearing yesterday that some of those deals could be announced ‘perhaps as early as this week’.
The importance of an agreement was laid bare this morning with official figures showing 27.4 per cent of British-made cars went to the US last year – worth £9billion
Ministers have been scrambling to finalise terms before a summit with the EU on May 19 – when Keir Starmer will unveil closer relations (pictured with Ursula von der Leyen)
He suggested that several countries had made ‘good offers’, without providing details.
One senior car industry executive told the FT that while reducing tariffs on the UK was desirable the wider goal must be reducing the 25 per cent rate globally.
‘Quotas are complex to operate and inherently limiting to trade,’ they said.
‘The most important thing is cutting the 25 per cent tariff, because above about 10 per cent, it’s just not sustainable.’
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US trade deal ‘set to be signed this week’ as Starmer scrambles to ease Trump’s tariffs on cars and steel before his Brexit ‘reset’