\n\t\t\t\t\tMinisters are ‘over optimistic’ over what a US deal will look like, according to Lord Darroch\t\t\t\t\t <\/p>\n
Ministers are overly optimistic about striking an economic deal to lower tariffs with Donald Trump<\/a>, and should instead move to deepen trade ties with the EU<\/a>, the UK\u2019s former ambassador to the US has said.<\/p>\n Lord Darroch said it would be difficult for Britain to get a \u201cclear win\u201d from an American trade deal, while it is likely to be forced to make a \u201cbig concession\u201d in areas like taxes on tech giants<\/a>, online safety <\/a>or pharmaceuticals.<\/p>\n Hopes for a deal stuttered last week as Trump\u2019s chief economic adviser Ken Hassett said it would take an \u201cextraordinary deal\u201d<\/a> for any nation including the UK to avoid the 10 per cent tariff baseline still in place, and UK Government sources admitted there was no sign of a breakthrough in talks.<\/p>\n Darroch said: \u201cI would just say that I think there\u2019s a lot of misplaced optimism about this deal. <\/p>\n \u201cI think it\u2019s inconceivable that the Trump team do a deal with us that doesn\u2019t involve a big concession from us.\u201d<\/p>\n Darroch went on to say a deal would be unlikely without the UK giving way on either agriculture imports <\/a>from the US, although ministers have ruled out watering down food standards, taxes on tech giants, online safety laws or paying more for American pharmaceuticals<\/a>.<\/p>\n Sir Keir Starmer confirmed that the Digital Services Tax (DST) which would hit US tech giants such as Amazon, Facebook and X, and implementation of online safety laws were on the table in the talks<\/a>.<\/p>\n Former career diplomat Darroch, 70, was US ambassador between 2016 and 2019 but was forced to stand down<\/a> after messages he wrote criticising the first-term Trump<\/a> White House as \u201cinept\u201d and \u201cdysfunctional\u201d were leaked to the press.<\/p>\n Darroch said: \u201cI just don\u2019t see it being a very easy deal, which we can go away with a clear win, because that\u2019s not the way the Trump team negotiate. And they will look for a serious concession.<\/p>\n \u201cIf you want a quick win somewhere on UK growth reducing the trade barriers with Europe <\/a>looks like an absolute no-brainer from my point of view.<\/p>\n \u201cOne of the demands that the US is thinking about putting on the table for a trade deal with the UK would be some regulatory disalignment with Europe\u2026 that\u2019s not inconceivable, because there are economists in the Trump circle like Stephen Moore who talk about this publicly and say this is one of the big objectives to get us out of the EU orbit.<\/p>\n \u201cI can\u2019t believe the Starmer Government would do that, but I can believe it might be on the American wish list.\u201d<\/p>\n A No 10 source however insisted that the PM does not view the question of trade as \u201ceither\/or\u201d between the US and EU.<\/p>\n \u201cWe don\u2019t have to choose one of our allies or another, we\u2019ve obviously got the wider EU reset going on, that is looking at trade, and the US is one of our biggest trading partners.\u201d<\/p>\n It came as Chancellor Rachel Reeves <\/a>called for a new global trading system that defends free trade but supports countries\u2019 economic security, in the face of Trump\u2019s tariffs<\/a>, and following calls for an economic \u201ccoalition of the willing\u201d to counter the levies.<\/p>\n One business source said this could include striking sub-deals with like-minded nations at the World Trade Organisation (WTO) akin to a recent plurilateral agreement on e-commerce.<\/p>\n Writing in The Observer, Reeves said she would use a visit to to Washington to attend the International Monetary Fund\u2019s spring meetings with other finance ministers to argue for \u201ca more balanced global economic and trading system that supports national economies to become more resilient\u201d.<\/p>\n \u201cOne that recognises the benefits of free and fair trade but also seeks to address the challenges of this new era.\u201d<\/p>\n