Trump
‘makes trade deal with UK second-order priority’ in blow to ministers
Exclusive:
US officials have split negotiations with countries into three phases, sources
say, with South Korea taking priority
Kiran
Stacey, Eleni Courea and Lisa O'Carroll
Tue 29 Apr
2025 19.31 BST
Donald Trump
has made a trade deal with the UK a second-order priority, sources have told
the Guardian, hampering British attempts to meet their mid-May deadline.
US officials
have decided to split their negotiations with more than a dozen other countries
into three phases, with the UK being placed in either phase two or three,
according to people who have been briefed on the talks.
A trade deal
with the US would be the biggest prize for British negotiators, who made major
strides toward separate agreements with the EU and India on Tuesday.
But UK
officials fear that a deal with the EU, which they hope to agree at a summit on
19 May, could make it more difficult to negotiate with a Trump administration
that repeatedly criticises European trade policies.
One person
with knowledge of the US talks said: “The US has now decided to negotiate its
trade deals in three phases. The government has been told it will not be in
phase one – though that leaves the door open to be in either phase two or
three.”
A
spokesperson for the business department said: “The US is an indispensable ally
and negotiations on an economic prosperity deal that strengthens our existing
trading relationship continue.
“We’ve been
clear that a trade war is not in anyone’s interests and we will continue to
take a calm and steady approach to talks.”
The White
House did not respond to a request to comment.
British
officials first presented a draft deal to their US counterparts weeks ago,
before the president’s major tariff announcement. They hoped to agree a deal in
time to grant the UK an exemption but, when that failed, shifted their focus
instead to a self-imposed deadline of 19 May.
Whitehall
sources say, however, that negotiations have continued to be unpredictable in
the weeks since Trump made his announcement. US officials are now reportedly
demanding the UK lower its food quality standards to allow imports of American
beef and chicken – something the Labour government has long ruled out.
The draft
agreement prepared by the British side would lead to the UK reducing its
digital services tax, which is paid only by major US technology companies, in
return for lower tariffs on steel, aluminium and cars. Rachel Reeves, the
chancellor, has also held out the possibility of reducing the 10% tariffs on US
cars as an additional sweetener.
But in the
past few days the Trump administration has decided to split its negotiations
with 17 different countries into three groups, each of which will get a week to
negotiate in turn – a development first reported by the Wall Street Journal.
The US has imposed a deadline of 8 July for talks to conclude – several weeks
later than the UK target.
Sources said
UK officials had been told the immediate priority would be negotiating with
Asian countries, with South Korea at the top of the list.
Scott
Bessent, the US Treasury secretary, told reporters on Tuesday that Asian
trading partners such as India, South Korea and Japan “have been the most
forthcoming, in terms of doing the deals”.
He also
criticised European countries for imposing digital services taxes on US
companies, saying he wanted them to be removed. The British government has
offered to reduce the tax but not to drop it entirely.
Liberal
Party Of Canada Holds Its Election Night Party In Ottawa<br>OTTAWA,
CANADA - APRIL 29: Canadian Prime Minister and Liberal Party Leader Mark Carney
speaks to his supporters after winning the Canadian Federal Election on April
29, 2025 in Ottawa, Canada. The election campaign themes have been dominated by
the economy, tariffs and annexation threats from the U.S. Carney faced a
challenge from Pierre Poilievre, the leader of the Conservative Party. (Photo
by Andrej Ivanov/Getty Images)
One
government source described the US tactics as “makeshift and unpredictable”.
Another said contact had continued in the past few days despite the promised
phasing of talks.
However, the
UK is making better headway with India and the EU.
Negotiators
held crunch talks on Tuesday afternoon with their Indian counterparts, after
Piyush Goyal, India’s trade minister, told businesses at a roundtable in London
that 25 out of 26 aspects of the deal had been agreed.
UK officials
were hopeful of finalising the deal on Tuesday, but one source briefed on the
talks said they broke up without agreement on national insurance contributions.
A longstanding sticking point has been Delhi’s concern that Indians working
temporarily in the UK on business visas must pay national insurance despite not
being eligible for UK pensions or social security benefits.
The
expectation is that at least one more round of talks will be needed to clinch
any deal. Officials are in discussions over a potential visit by Keir Starmer
to India this year once an agreement has been finalised.
Meanwhile,
British ministers including Nick Thomas-Symonds, the Cabinet Office minister,
and Jonathan Reynolds, the business secretary, met Maroš Šefčovič, the EU trade
commissioner, amid signs that a UK-EU deal could be getting closer.
Šefčovič
tweeted afterwards it had been “a productive exchange on securing balanced
trade relationships, as we face new global dynamics”.
The Guardian
revealed last week that Brussels was willing to make major concessions to its
proposals for a youth mobility scheme to get a deal over the line, including
limiting work visas to 12 months, restricting the sectors EU citizens can work
in.
However,
experts say that the plans to align British agricultural standards with
European ones would make it impossible to give concessions on US demands to
align with US ones instead.
Anand Menon,
the director of the thinktank UK in a Changing Europe, told MPs on Tuesday: “If
the Americans say you have to lift the regulations that restrict the access of
our goods to your market, that is incompatible with what we need to do to sign
a … deal with the EU.”
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