UK
forging ahead with US trade talks, despite court block on Trump’s tariffs
Exclusive:
British officials hope to have deals covering cars, metals and aeroplane parts
within weeks
Kiran Stacey
Political correspondent
Sat 31 May
2025 05.00 BST
British
officials are forging ahead in their trade talks with the US despite a recent
court decision overturning many of Donald Trump’s tariffs, and hope to have a
deals covering cars, metals and aeroplane parts in place within weeks.
A team of
British negotiators spent much of last week in Washington talking to their
American counterparts about how to implement the deal was signed earlier this
month, including how quickly it can be passed by parliament and Congress.
The talks
come despite a ruling last week by a federal court overturning Trump’s blanket
10% tariffs, which Downing Street believes will eventually be overruled by the
president’s allies on the supreme court.
But on
Thursday night, an appeals court paused the ruling while it looks more closely
at the arguments – allowing Trump’s administration to keep them in place.
One
government source said: “Some countries are viewing the court ruling as an
indication that they were right not to negotiate over tariffs. We’re taking the
opposite view, and trying to get this deal implemented as soon as possible.”
A government
spokesperson said: “The UK was the first country to secure a deal with the US
in a move that will protect British business and jobs across key sectors, from
autos to steel.
“We are
working to ensure that businesses can benefit from the deal as quickly as
possible and will confirm next steps in due course.”
The US
president announced the US-UK trade deal earlier this month from the Oval
Office, calling it “very special for the UK and special for the United States”.
Trump surprised Downing Street with the timing of his announcement, informing
Keir Starmer just hours before he made it, with many of the finer details still
to be ironed out.
Under the
terms of the agreement, for example, British car companies will be allowed to
export 100,000 vehicles a year at a 10% tariff rate. But the deal does not set
out how the Americans will view cars assembled in the UK with a considerable
proportion of parts made in other countries, nor how parts themselves will be
treated.
While the
details are being fleshed out, some British companies are being forced by their
American customers to reduce their prices, while others say they are simply not
exporting at all.
Earlier this
week, a federal court ruled many of Trump’s tariffs were illegal, and that he
should first have sought the approval of Congress. But while that ruling
applied to the 10% rate Trump has applied to products from across the world, it
did not apply to the higher 25% rate he has imposed on cars, steel and
aluminium.
Downing
Street has decided to continue negotiating with the US as if the court ruling
did not apply, not least because British officials believe it is likely to be
struck out by the supreme court, which is dominated by conservatives.
On Friday
night, Trump unexpectedly announced he would be doubling foreign tariffs on
steel and aluminium imports to 50%. It was not immediately clear how the
announcement would affect the trade agreement negotiated earlier this month
that saw tariffs on UK steel and aluminium reduced to zero.
Last week, a
UK team landed in Washington, including the prime minister’s business adviser,
Varun Chandra, the business department’s head of trade relations, Kate Joseph,
and the deputy national security adviser, Jonathan Black. Michael Ellam, the
senior Cabinet Office official who played a major role in getting the deal
signed, is now concentrating on the EU reset deal, one source said.
The team
spent much of last week talking to Howard Lutnick, the US commerce secretary,
Jamieson Greer, the US trade representative, and Brooke Rollins, the US
agriculture secretary. Rollins has been pushing for the UK to open up to more
US agricultural and food products, though Starmer has insisted he is not
willing to reduce welfare and safety standards to do so.
Officials
are hoping car tariffs will be dropped in the next two weeks, while steel and
aluminium ones could take a few weeks longer. They also believe the US will
reduce tariffs on British-made aeroplane parts almost to zero, having promised
to give the UK a “significantly preferential outcome” when deciding tariffs on
future products.
Discussions
about pharmaceutical products, which account for approximately £7bn worth of
exports to the US, are still going on, however, given Trump has not yet said
what tariffs he intends to impose on the sector.
The talks
with the US are continuing at the same time as officials get closer to a
controversial £1.6bn trade deal with Gulf countries. The Guardian revealed on
Friday that that deal contained no concrete provisions on human rights, modern
slavery or the environment.
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