Unsurprisingly, Trump’s UK visit continues to dominate the headlines following last night’s cordial exchanges with King Charles at a state banquet at Windsor Castle.

However, attempts to reset the UK trading relationship with the EU may provoke fresh headaches for the Starmer team this morning, with Brussels laying out negotiation terms this week.

Both feature prominently in today’s ‘Day in Trade’ digest.

State visit yields £150bn investment

The Starmer government will be hoping that the £150bn injected into the UK economy from US investment and tech giants this week will placate critics of the controversial second state visit to the country from US President Donald Trump, the Guardian reports.

Following billions of pounds of investment from Microsoft, Google and Nvidia earlier this week, Palantir announced a further £1.5bn in tech investment over the next five years yesterday. This includes a £750m deal for the UK armed forces to use technology created by the US firm, according to the Times.

Blackstone has made the largest investment this week though, committing £90bn into the UK over the next decade. Prime minister Starmer said that “friends like the US” can “help shape the future for generations to come and make people across the country better off”.

“These investments are a testament to Britain’s economic strength and a bold signal that our country is open, ambitious and ready to lead,” he said, with the government also hoping that the package will help the UK become an ‘AI superpower’.

Former deputy prime minister Nick Clegg, who held senior roles at Meta until this year, criticised the package as being “sloppy seconds from Silicon Valley”, with other critics saying it does little to support the UK’s own tech businesses.

Marco Forgione, the director general of the Chartered Institute of Export & International Trade, has also called for “clarity” on the rules and their application under the UK-US Economic Prosperity Deal agreed earlier this year.

“Once that happens, I think we’ll see unleashed a real dynamic engagement with the US market,” he told BBC Radio Cambridgeshire yesterday.

Trump and circumstance

The US president appeared to enjoy last night’s state banquet where he sat alongside King Charles.

“We’re joined by history and faith, by love and language and by transcendent ties of culture, tradition, ancestry and destiny,” the president said.

“We’re like two notes in one chord or two verses of the same poem, each beautiful on its own, but really meant to be played together.”

The King emphasised the importance of protecting the environment in his speech, while also praising the UK-US relationship.

EU wants youth mobility deal first, before agrifoods trade

The first UK-EU talks since May’s Leader’s Summit began in earnest this week, with EU relations minister Nick Thomas-Symonds in Brussels for talks.

The first challenge is a demand from the EU that work on the proposed youth mobility agreement must precede negotiations on the implementation of a Common Sanitary and Phytosanitary (SPS) Area. The latter bids reduce post-Brexit checks on agrifood products.

The two parties pledged to work on both of these areas at the summit in May, but Brussels is now saying that progress on the SPS deal is “conditional on the number of young people that Downing Street will allow the right to live, work and study in Britain,” the Telegraph reports.

“As we move into this stage of the negotiations, I have already set out the timetable on the SPS agreement,” Thomas-Symonds said this week at an event in Brussels.

“But obviously, what we want to do is to be able to then do similar things in other parts of the negotiation. But we obviously want to move forward with it all as a package.”

The implementations of the Common SPS Area and the youth mobility scheme should be prioritised by the European Commission and British government as part of their efforts to reset the UK-EU relationship, according to a new report from the Chartered Institute of Export & International Trade that was launched last week.

“The youth mobility scheme is an example of the mutually beneficial opportunities that the UK government will need to consider as it looks to deepen its relationship with the EU,” said one of the report’s co-authors, Fergus McReynolds.

“As well as the SPS area, the UK should look at the youth mobility scheme as an initiative that could pave the way for greater mobility access in the EU as well as providing young people with a great opportunity to live, study and work in a fellow European country.”

You wan watch McReynolds talk about the report here.

Safe ground – but at what cost?

The two parties are also progressing talks on British participation in the EU’s £150bn defence procurement programme, Safe, this week. European capitals agreed yesterday that the UK could join, according to the Telegraph.

However, the FT reports that the UK team is set for “gruelling talks” over the fee the country will need to pay to participate.

The first round of contracts to be payable by cheaper loans from the European Commission via Safe is set to open in November, leading Thomas-Symonds to call the negotiation over the fee “urgent”.

“We have the first round with the biggest projects coming up in November,” he said.

“And I make that point, not only because there is that particular process, but because of the urgency of the situation… in Ukraine. Ukraine doesn’t have much time to waste.”

Other trade news today

·         China is banning its largest tech companies from buying AI chips manufactured by US giant Nvidia, the FT reports

·         The EU has unveiled plans to diminish trade ties with Israel, including a proposal to impose tariffs on some €5.8nm worth of Israeli exports, according to Politico

·         Jaguar Land Rover supply chain workers are being told to apply for universal credit after a cyber attack forced the company to shut down its IT systems and pause production, the BBC reports

·         The Bank of England is set to announce its latest decision on interest rates today, with most commentators expecting the 4% rate to hold

Yesterday in trade

·         £30bn investment from US tech giants into the UK was announced

·         Hopes of a 0% US tariff rate for UK steel were dashed though, though the UK’s 25% rate remains half of what most countries are charged with

·         France proposed a 50% cap the value of UK procurement under Safe

You can read all the details here.