A Squeezed Britain Ekes Out 3 Trade Deals. But Are They Any Good?

 

News Analysis

A Squeezed Britain Ekes Out 3 Trade Deals. But Are They Any Good?

 

Prime Minister Keir Starmer’s government had to make some politically fraught concessions, reflecting the country’s status as a midsize economy in a volatile market.

 

Mark Landler

By Mark Landler

Reporting from London

https://www.nytimes.com/2025/05/20/world/europe/uk-starmer-eu-deal.html

May 20, 2025, 12:01 a.m. ET

 

Striking back-to-back deals with the European Union and the United States, Britain showed that it didn’t have to choose between its two largest, mutually antagonistic trade partners, after all. It could, as its ambassador to Washington, Peter Mandelson, once said, “have our cake and eat it.”

 

But the limited scope and occasionally stingy terms of these deals, both of which required painful concessions, attest to Britain’s diminished position in the post-Brexit era. Far from being an agile free agent that is able to strike opportunistic deals, as Brexiteers once predicted, Britain finds itself squeezed between dueling heavyweights.

 

“If it is a cake,” said Mujtaba Rahman, an analyst at the political risk consultancy Eurasia Group, “it isn’t a very tasty one.”

 

That isn’t to say that Prime Minister Keir Starmer’s two agreements, as well as a third with India, aren’t evidence of negotiating agility. His deal with President Trump was the first Mr. Trump made with any country since imposing across-the-board tariffs on dozens of trading partners. The agreement with the European Union, which Mr. Starmer announced on Monday, is the first significant new deal between Britain and the E.U. since the trade accord that enshrined Brexit in 2020.

 

Each has its selling points, whether it is the E.U. allowing British travelers to use electronic gates at some European airports — shortening maddening lines for vacationers — or the United States reducing tariffs on Jaguars, Land Rovers and other British luxury cars bound for the American market.

 

“We’re demonstrating that it is not a binary choice between the U.S. and E.U.,” said Jonathan Portes, a professor of economics at King’s College London. But he added that Britain faced “a much more constrained set of choices.”

 

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The deal with the United States, for example, still leaves Britain worse off than it was before Mr. Trump took office, saddled with a basic 10 percent tariff on exports. Likewise, Britain had to make concessions to get back some of what it used to get automatically as a member of the European Union.

 

While the agreement with Brussels will generate nearly 9 billion pounds, or $12 billion, worth of benefits a year by 2040, according to the British government, it will add just 0.2 percent to Britain’s gross domestic product. Brexit cost the country 5.5 percent of its G.D.P., according to a 2022 study by the Center for European Reform, a research center in London.

 

To close the deal with the E.U., Mr. Starmer made a politically fraught concession: allowing European trawlers to fish in British territorial waters for 12 years in return for reduced trade barriers for British food entering the single market. And to get a partial reprieve of American tariffs on British autos, Britain granted greater access to American beef, ethanol and agricultural products.

 

Such trade-offs reflect Britain’s sobering reality as a midsize economy operating in a world of three gargantuan trading blocs: the United States, the European Union and China. Adding to the challenge: One of these giants, the United States, has thrown out the rule book governing global trade.

 

This is not the world that Brexit’s champions had imagined when they argued a decade ago for Britain to leave the single market. They said that Britain, unshackled from the bureaucracy and regulations of Brussels, would be able to cut favorable deals, including with the United States. Mr. Trump, in his first term, applauded the Brexit project and held out the prospect of a trade deal as a reward.

 

Britain’s agreement with India, announced this month, offers some vindication of the Brexit case. Mr. Starmer could not have made the deal, which will halve duties on British whiskey and gin, as part of the E.U.

 

“It was plausible to say that the U.K., with an open, midsize economy, could do as well, or better, in a rules-based international order by being agile and flexible rather than being a member of the E.U.,” Professor Portes said. “But that world is gone, at least for the moment,” he added. “We’re now in a much more difficult environment, and the U.K. has to find its way.”

 

When Mr. Starmer came into power last summer, he made clear he wanted to reset Britain’s relationship with the E.U. while preserving its status as perhaps the closest ally of the United States. He has stuck to that position, even after the return of Mr. Trump, who upended the global trading system and has threatened to withdraw support for Ukraine in its war with Russia.

 

What began as a balancing act has turned into a tightrope walk. Mr. Rahman said that in trade negotiations, Britain was being “squeezed between a very mercantilist E.U. and a very predatory, hostile U.S.”

 

The European Union, he noted, views the deal Mr. Starmer negotiated with Mr. Trump as a bad one, which it does not plan to replicate. Given Mr. Trump’s antipathy for Brussels, it is not clear he would agree to a similar agreement with the E.U., though its larger size gives its trade negotiators greater leverage.

 

The tensions between Washington and Brussels added to the pressure on London. British officials, Mr. Rahman said, believed they had to conclude a deal with Mr. Trump before Monday’s summit between Britain and the E.U. or risk antagonizing him with images of Britain rekindling its relationship with the bloc.

 

Ultimately, the calendar mattered less than the basic power dynamic. E.U. officials may use more diplomatic language than Mr. Trump’s aides, but the bloc’s officials were hardly less aggressive, especially in pushing Mr. Starmer to accept a lengthy extension of European fishing rights in British waters.

 

Britain’s newspapers, many of which lean toward the opposition Conservative Party, were quick to condemn Mr. Starmer for “selling out” Britain’s fishermen. The Daily Telegraph said on Monday that he had tied the hands of future British governments with the fishing deal. Boris Johnson, the Conservative former prime minister who first used the line about “having your cake and eating it” in 2020 to promote his own Brexit deal, castigated Mr. Starmer’s updated version as “hopelessly one-sided.”

 

Mr. Starmer insisted that fishermen would benefit because the reduced barriers to food exports would allow them to ship more seafood to continental Europe. He portrayed the two deals, plus the one with India, as evidence that Britain was doing exactly the kind of opportunistic deal-making the Brexiteers once envisioned.

 

“Britain is back on the world stage, working with our partners, doing deals that will grow our economy and putting more money in the pockets of working people,” he said at a news conference, flanked by Ursula von der Leyen, the president of the European Commission, and António Costa, the president of the European Council.

 

“This is a new beginning,” Ms. von der Leyen said, “for old friends.”

 

Mark Landler is the London bureau chief of The Times, covering the United Kingdom, as well as American foreign policy in Europe, Asia and the Middle East. He has been a journalist for more than three decades.