Keir Starmer and Trump discuss 'productive' UK-US trade talks as negotiations continue

Starmer and Trump discuss UK-US trade deal ahead of new tariffs.

British Prime Minister Keir Starmer and US President Donald Trump spoke on Sunday, discussing ongoing UK-US trade negotiations, Downing Street said.

Since Brexit, successive UK governments have pursued a trade deal with the US. A Downing Street statement described the talks as "productive," confirming that negotiations on an "economic prosperity deal" would continue this week.

Trump has hinted at a "great" deal that could mitigate the impact of US tariffs, particularly on British steel. Unlike the EU, Britain has chosen not to retaliate against these tariffs.

Starmer, who visited Washington in February, remains optimistic about securing an agreement—something the previous Conservative government failed to achieve.

Britain has been trying to secure a post-Brexit trade agreement with the US before April 2, when Donald Trump is set to announce new tariffs. The UK government hopes to avoid or reduce the impact of these measures through last-minute negotiations.

Since Brexit, successive British governments have pursued a trade deal with Washington, but the previous Conservative administration failed to reach an agreement. Prime Minister Keir Starmer, whose Labour party took power in July, has renewed efforts. His February visit to Washington, followed by Business Secretary Jonathan Reynolds’ discussions, and a recent phone call with Trump have kept talks moving forward.

Trump has promised a "great" deal that could shield the UK from tariffs, branding April 2 as "Liberation Day," when he plans to introduce new, supposedly "reciprocal" tariffs. This follows his recent decision to impose steep duties on imported cars and auto parts, sparking concerns over rising trade tensions. Unlike other major economies considering retaliation, Britain has opted for diplomacy, with Finance Minister Rachel Reeves stating the UK will not escalate a trade war.

Downing Street describes the potential agreement as an "economic prosperity deal," suggesting it will be short of the full-scale free trade deal Britain ultimately seeks. Experts warn that Brexit has given the UK flexibility in negotiations but reduced its bargaining power compared to the EU.

A key sticking point is Britain's digital services tax, which generates £800 million annually. Reports suggest London may scrap the tax in exchange for tariff relief. Starmer has not confirmed this but insists all options remain on the table. Experts caution that eliminating the tax for uncertain trade benefits could be risky. However, if Trump delivers on his promises, it may prove a worthwhile trade-off for Britain’s economy.