Sign in Subscribe
Tariffs

UK and US Close in on Trade Deal as Keir Starmer's Adviser Heads to Washington

Strategic Insights

— 2 min read

Prime Minister Sir Keir Starmer is pushing for a trade agreement between the UK and US, with his top business adviser, Varun Chandra, set to meet US officials in Washington. The talks aim to resolve outstanding issues on steel and pharmaceuticals, with the goal of reaching an agreement by the first week of July. Meanwhile, US President Donald Trump has signed an executive order confirming the deal on cars and aircraft parts, cutting US tariffs on UK car exports from 27.5% to 10% for the first 100,000 vehicles shipped each year.

Key Takeaways:

  • The UK and US are close to reaching a trade agreement, with Varun Chandra, a senior adviser to Sir Keir Starmer, leading the negotiations in Washington.
  • The talks will focus on resolving outstanding issues on steel and pharmaceuticals, with the goal of achieving an agreement by the first week of July.
  • US President Donald Trump has signed an executive order confirming the deal on cars and aircraft parts, which will cut US tariffs on UK car exports from 27.5% to 10% for the first 100,000 vehicles shipped each year.
  • The deal aims to spare UK exports of jet engines and other aerospace parts from US tariffs, but the fate of steel and aluminium provisions remains uncertain.
  • British officials are still negotiating over whether the deal will cover the UK's largest steel manufacturer, Tata, which has been importing steel from India and the Netherlands for processing in the UK.
  • The deal's "implementation phase" has begun, with Starmer stating that it does not require the UK to change the Chinese ownership of British Steel.

Statistics:

  • 27.5%: The US tariff on UK car exports that will be reduced to 10% for the first 100,000 vehicles shipped each year following the deal.
  • 10%: The US tariff on UK car exports that will be applied after the first 100,000 vehicles shipped each year.
  • 100,000: The number of vehicles per year that will be exempt from the 27.5% US tariff.
  • 2: The number of blast furnaces at Tata's plant in Scunthorpe that are still operational, with the company importing steel from India and the Netherlands for processing in the UK.
  • 1: The estimated week in July when an agreement between the UK and US is expected to be reached.

Sources:

  • Trump, D. (2023). Executive order on trade deal with the UK.
  • Reuters (2023). UK and US close in on trade deal, hopes for July agreement.
  • BBC News (2023). Keir Starmer's adviser to lead UK-US trade talks.
  • The Guardian (2023). US and UK on brink of trade deal, but steel and pharma tariffs still a hurdle.

Read more