Is a US-UK Trade Deal on the Horizon?
Along with many others, I watched last week's meeting between President Donald Trump and Prime Minister Keir Starmer with a sense of intrigue and trepidation.
Although these feelings were quickly replaced by hope and optimism following the announcement that a US trade deal could happen “quickly,” the following day’s Oval Office meeting between President Trump and President Zelensky brought the harsh reality of geopolitical complexities into sharp focus, providing timely reminder that long-lasting peace is always the priority.
Fast forward to the start of a new week and despite a Ukraine-US minerals deal back on the table and a productive weekend summit of European leaders; we seem to face more questions than answers about the future.
This uncertainty leads to further confusion about US-UK trade. However, despite Trump’s rhetoric and actions not always being in lockstep, I remain optimistic. Trade has always been an important element of our relationship with the US, and with such a business centric President in Trump, I see no reason to see that this will change. Of course, we’ll have to see how the situation develops in the coming weeks, but I think it’s fair to say he’s looking at the UK more favourably now and because of this, it’s hard to deny the transatlantic opportunities that exist here for the UK.
It’s an opportunity that UK businesses are certainly calling out for. The latest survey of medium-sized firms by BDO found that nearly half of domestic manufacturers see export and trade barriers as their biggest obstacle to growth over the next six months. The report, published today, reveals 46% need support to navigate the volatile global trade environment.
This opportunity is also recognised by attendees of the BritishAmerican Business (BAB) Transatlantic Trade Investment Policy Conference, which I attended last week at the Bank of America offices in London. The mood among attendees at the event was that the UK, with its trade surplus with the US, is in a stronger position compared to the EU.
Another UK strength is its so-called ‘soft power’. I was fascinated by the positive impact on Donald Trump by Keir Starmer publicly handing over The King’s invitation for an unprecedented second state visit. This power is crucial for shaping a country's image, building influential networks, and establishing a favourable environment that drives investment and contributes to long-term economic growth. The UK’s soft power has been very effective in terms of diplomacy and supporting our economy and following the events over the last few days, it’s possible to see why we do so well in the international rankings compiled by Brand Finance – the annual result of the latest index is due this month.
In addition to trade deals, there were discussions between the two leaders about a new economic deal focused on advanced technology, aiming to enhance collaboration in fields such as AI, renewable energy, and digital infrastructure. Moves to stimulate growth in priority sectors were also a hot topic at the recent BAB event. It was agreed that targeted tax incentives within the UK’s upcoming Industrial Strategy could stimulate growth in sectors like biotech, which has retained talent and prevented brain drain.
The Trump administration’s business-centric approach to trade and the economy presents both opportunities and challenges for the UK. By leveraging its strengths and navigating international relations, the two nations can boost their trading capabilities and technological advancements and greatly enhance the UK’s ability to attract greater levels of foreign direct investment.
Irwin Mitchell recently published its latest FDI report . The in-depth study includes an introduction from Baroness Gustafsson, insights on the UK’s advanced manufacturing sector by Simon Collingwood, a case study on Freeports by Calum Macpherson, and expertise from legal professionals on how FDI projects can create jobs and drive innovation.
You can hear more about how the UK is attracting FDI in the new season of our Business But Better podcast. We’re joined by industry experts to explore the unique advantages available to overseas investors, how the government is prioritising FDI, and the help available when entering the UK market.
