Keir Starmer is living out the wildest dreams of the Brexiteers. Buccaneering Britain got a trade deal with India on Tuesday, and now, No 10 has bagged the first post-liberation day deal with the US.
JD Vance and a coy Ambassador Mandelson stood beside President Trump in the Oval Office as he proclaimed a deal that secures “billions of dollars of increased market access for American exports, especially in agriculture”. Starmer phoned-in to laud the deal as “historic”, before reminiscing about the bunting outside Buckingham Palace the day Churchill proclaimed Victory in Europe 80 years ago this week. Huzzah, right!? As ever, nostalgia for the Second World War served to mask the reality of this vaunted alliance.
On the surface, this gives No 10 and the White House a respite. Trump can boast about wrenching Britain open for American exporters while reassuring Wall Street that, yes, in fact, those much-touted trade deals are on their way to save the economy. Starmer, meanwhile, can claim his obsequiousness in the Oval Office paid off, that he has becalmed the economic storm heading across the Atlantic, and that the Special Relationship has been resuscitated on the surgeon’s table.
But at what cost? The pushback from right and left against the Indian trade deal, especially over tax exemptions, suggests Britain’s love for free trade is waning. No 10 can no longer rely on MPs and voters to automatically judge trade deals to be good. Blanket approval is now being withheld.
The American deal is a case in point. Remember it was only necessary because Trump hiked tariffs on Britain in first place. The best the government could have hoped for is a return to the status quo ante. That is far from what has happened. As the Commerce Secretary Howard Lutnick proudly declared: “We started at 10 per cent [tariffs on the UK] and we ended at 10 per cent – and the market for America is better.”
In Trumpland, tariffs are as much about extracting ransom as protecting domestic industry. A big chart in the Oval Office spelled out how the White House sees the deal. UK tariffs on the US were down from 5.1 per cent to 1.8 per cent, while US tariffs on the UK were up from 3.4 per cent to 10 per cent. No 10 is celebrating the reductions in tariffs on British cars – up to a quota of 100,000 – and steel and aluminium. In other words, tariffs which did not exist three months ago have been slightly lowered in return for American access for ethanol, agricultural and beef products.
More details will soon be released, and much remains to be negotiated. This was rushed out by both sides. The plan to announce the deal on Tuesday was delayed, I hear, with officials anxious to sign before Lutnick leaves town next week. Some were frustrated that US Trade Representative Jamieson Greer was saying one thing to them and another to the commerce department.
The Prime Minister’s business adviser Varun Chandra, I’m told, has been leading this week’s negotiations with Greer, while Business Secretary Jonathan Reynolds has been shunted to the periphery. The suave 40-year-old is more amenable to the Americans, one official quipped. Chandra has kept a low profile ever since he was drafted into No 10 from a security consultancy last year. He soon started to lead on AI before being handed the trade brief, popping up beside Starmer for his meeting in the Oval Office.
Still, this is Trump’s deal. Mandelson jibed in the Oval that Starmer appreciated the President’s call last night to extract more concessions. The Prime Minister has left Trump’s tariff racket bruised behind his ebullient tone. One official lamented to me that “ultimately it’s not in our hands – it’s up to the US to decide”. British workers in the steel and car industry will grimly welcome that the boot on their neck feels a little lighter. But the White House’s broad strategy has not changed: tariffs for thee and market access for me.
[See also: Trump is making America sad again]
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