Starmer and Trump focus on ‘productive negotiations’ on financial deal
Sir Keir Starmer and Donald Trump have agreed “productive negotiations” about an financial deal between the UK and US will “proceed at tempo”, Downing Road has mentioned, forward of a looming deadline on US tariffs.
The Sunday evening telephone name between the pair comes after sources at No 10 mentioned the federal government was ready to retaliate towards US commerce taxes if wanted.
British negotiators try to win a last-minute exemption forward of Trump’s 25% levy on automotive imports, which is predicted to come back in on Wednesday.
Trump has imposed a collection of tariffs concentrating on items from different international locations within the first few months of his second time period within the White Home, with threats of wider taxes additionally being imposed.
The prime minister has beforehand mentioned he doesn’t need to bounce right into a commerce struggle with the US. However Sir Keir has additionally mentioned the UK “reserves the suitable” to introduce reciprocal tariffs on the US if a deal to exempt the UK can’t be reached.
The federal government has argued the UK has a comparatively equal buying and selling relationship with the US, in comparison with its different companions.
The unbiased Workplace for Finances Accountability (OBR) has warned a reciprocal commerce struggle would wipe billions off financial development and all however get rid of the headroom Chancellor Rachel Reeves has to remain inside her self-imposed fiscal guidelines.
The OBR’s newest financial forecast, revealed on Wednesday, mentioned GDP can be 0.6% decrease than forecast this 12 months and 1% decrease subsequent 12 months in probably the most “extreme” situation, during which the UK and different nations retaliated to Trump’s tariffs.
This situation would “nearly totally get rid of” Reeves’ £9.9 billion headroom towards her fiscal guidelines, which could lead on her to implement tax rises or additional spending cuts if she wished to remain inside them.
In an alternate situation the place the UK doesn’t retaliate, the OBR has forecast a smaller discount in development, with GDP 0.4% decrease than anticipated this 12 months and 0.6% decrease subsequent 12 months.
It’s unclear how the UK would retaliate if tariffs do come into impact. There are a number of choices accessible, from duties on sectors the place British merchandise are significantly essential to the US, to specializing in particular merchandise like Harley Davidson bikes.
UK automotive exports are price about £7.6bn per 12 months, and the US is the second largest marketplace for UK vehicles after the European Union, in keeping with automotive trade physique the Society of Motor Producers and Merchants (SMMT).
Trump’s plan is predicted a to hit British luxurious automotive makers reminiscent of Rolls-Royce and Aston Martin.
The US president argues his measures will assist American producers and defend jobs, regardless of warnings costs may go up for shoppers.
Earlier on Sunday, Trump mentioned that he “could not care much less” if carmakers elevate costs because it meant “persons are gonna purchase American-made vehicles”.
Throughout a gathering between the prime minister and president on the White Home final month, Trump hinted at “an actual commerce deal”, which may see the UK keep away from the type of tariffs he has been threatening different international locations with.
Additionally of their name on Sunday, the 2 leaders mentioned persevering with to stress Russia over the Ukraine struggle, Downing Road’s spokesperson mentioned.
“Discussing Ukraine, the prime minister up to date the president on the productive discussions on the assembly of the Coalition of Keen in Paris this week,” they mentioned.
“The leaders agreed on the necessity to sustain the collective stress on Putin.”
No 10 mentioned Trump started the decision by sending King Charles III his greatest needs, after the monarch skilled non permanent unintended effects throughout most cancers remedy earlier within the week.
The 2 leaders agreed to remain in touch within the coming days, No 10 added.
