The UK and US are set to announce a framework for a trade agreement that will lower some of the tariffs introduced by the Trump administration earlier this year.
US president Donald Trump will make an announcement connected to these reports later today at an Oval Office event scheduled for 3pm BST (10am EST).
The FT reports that the deal will be “limited in scope” with the sectors hit hardest by new US tariffs, including cars and steel, to be the main focus.
Pharmaceuticals, aerospace and films have also been discussed during the negotiations, with the US seeking British concessions on its Digital Services Tax and its tariffs on US exports of cars, meat and shellfish.
The ‘baseline’ reciprocal 10% tariff on all UK goods exports to the US is not expected to be affected by the deal.
SPS no-go
Food standards have not been discussed during the talks, according to the Guardian. The UK currently bans the sale of chlorine-dipped chicken and hormone-fed beef, which are both exported by the US.
The UK is also discussing a new veterinary deal with the EU to reduce some of the sanitary and phytosanitary (SPS) controls that have been introduced following Brexit.
Regulatory alignment with the EU on food safety standards is a key requirement for this veterinary deal, making concessions to the US on this area unlikely.
Details needed
Speaking ahead of the announcements, Marco Forgione, the director general of the Chartered Institute of Export & International Trade, said that reports of a deal were promising, particularly for the automotive and steel industries.
“This deal should provide welcome relief for the sectors most affected by the Trump administration’s tariffs, particularly automotive and steel.
“The UK being the first country to secure a deal with the Trump administration, since it initiated sweeping new tariffs earlier this year, is also a positive sign that the special relationship does carry some weight in this new era for global trade.
“However, if current reports are correct, today’s announcements will be for an initial framework for a deal. If true, this must be a starting point, not an end, to UK-US negotiations. The 10% reciprocal tariffs introduced earlier this year still mark a significant change for British exporters and we have had a lot of feedback to this effect.
“We look forward to reviewing the details of the deal in the coming days and weeks with our members, representing their thoughts and challenges to the government.”
Forgione will share his further thoughts in tomorrow’s Daily Update, which will also include analysis of the deal from the Chartered Institute’s senior trade legislation adviser Garima Srivastava.
‘Full and comprehensive’ agreement
Teasing the announcement this morning, president Trump posted on Truth Social to say that the agreement “is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come”.
He also referred to the deal as the US’ “FIRST announcement”.
“Many other deals, which are in serious stages of negotiation, to follow!”
UK prime minister sir Keir Starmer is expected to make an announcement on the deal today. A No 10 spokesperson told the Guardian that the US is “an indispensable ally for both our economic and national security”.
“Talks on a deal between our countries have been continuing at pace and the prime minister will update later today.”
Response
Other senior figures have said they are hopeful that the deal marks a change in the US’ approach to global trade.
Vincent Clerc, chief executive of the AP Møller-Maersk, told the FT that the deal is “very good news if it’s a sign that we have begun to de-escalate this situation”.
Jordan Cummins, UK competitiveness director at the Confederation of British Industry (CBI), told the BBC’s Business Today Programme, that US tariffs had “bitten the bottom line” for businesses, but that he hoped today’s news could provide at least a “symbolic” reprieve.
"There are parts of our economy that are really feeling this and they need a big symbolic gesture backed up by some credibility from the government," Cummins said.
Parliamentary process
The Liberal Democrats and the Green Party have both called on the UK government to put any deal to a vote in Parliament.
When pressed on this matter in the House of Commons by Lib Dem leader Sir Ed Davey, Sir Keir Starmer said “it will go through the known procedures for this house.” However, the Constitutional Reform and Governance Act 2010 does not guarantee MPs a vote on treaties.
In the US, the president does not have unilateral authority to enter the US into trade agreements and will need to secure approval for any deal from Congress.
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