On February 27, US President Donald Trump and British Prime Minister Keir Starmer announced that the United States and Britain are negotiating a bilateral trade agreement. This deal aims to avert US tariffs and bolster the already strong trading relationship between the two nations.
“We’re going to have a great trade agreement,” Mr. Trump stated during a joint news conference. “We’re going to end up with a very good trade agreement for both countries, and we’re working on that as we speak.”
Prime Minister Starmer highlighted that the two countries had begun work on a new economic deal, with advanced technology at its core. This initiative aims to strengthen the economic ties between the US and the UK. Mr. Trump mentioned that the outlines of the trade agreement could be agreed upon “very shortly,” with key figures such as Treasury Secretary Scott Bessent, Vice-President J.D. Vance, Commerce Secretary Howard Lutnick, and national security adviser Mike Waltz leading the efforts.
Mr. Trump expressed optimism about finalizing the trade deal quickly. When asked if Mr. Starmer had convinced him to skip the threatened reciprocal tariffs, Mr. Trump praised Mr. Starmer’s negotiating skills, stating, “He tried. He was working really hard at lunch. I think we could very well end up with a real trade deal where the tariffs wouldn’t be necessary. We’ll see.”
British Finance Minister Rachel Reeves expressed confidence on February 26 that US-UK trade and investment would not be derailed by Mr. Trump’s threat to retaliate against perceived barriers to US exports. She noted that during Mr. Trump’s previous term, trade and investment flows between the two countries increased, and she believed that this could happen again.
During Mr. Trump’s first term, the US and Britain worked on negotiating a free trade agreement, but the effort was not completed. When Democratic President Joe Biden took office in 2021, he ended work on the relatively advanced negotiations.
In 2023, imports and exports of goods and services between Britain and the US totaled US$317 billion, making Britain the fifth-biggest US trade partner after Canada, Mexico, China, and Germany. The United States remains Britain’s single biggest national trade partner, although the UK trades more with the 27 members of the European Union as a bloc.
Earlier in February, Mr. Trump indicated that he believed something could be “worked out” with Britain regarding the threat of tariffs, while he appeared more committed to imposing tariffs on EU countries.