Can Starmer Get a US-UK Trade Deal?

Summary

The video explores the challenges and prospects of a UK-US trade deal post-Brexit. Despite initial optimism in 2020, key issues like food standards and the NHS have hindered progress. With Donald Trump's potential return to office, hopes have risen for a deal that could benefit both nations economically and geopolitically. However, Trump's 'America First' policies, including higher tariffs and his previous demands on food standards and pharmaceutical access, might limit progress. UK Labour leader Keir Starmer's reluctance to accept these terms adds another hurdle, leaving the deal's future uncertain.

Takeaways

• 😀 Brexit initially raised hopes for a UK-US trade deal, but the UK still lacks an agreement with its largest export market after 8 years.
• 😀 The UK started negotiating a trade deal with the US in 2020 after leaving the EU, but key issues such as food standards and NHS policies became major sticking points.
• 😀 A key issue in negotiations was the US's demand for the UK to weaken food standards, allowing imports of hormone-treated beef and chlorine-washed chicken.
• 😀 The NHS was another major sticking point, with the US pharmaceutical industry pushing for changes to how the UK buys drugs, raising concerns about privatization.
• 😀 After Trump’s presidency ended in 2020, the US’s priorities shifted, and trade negotiations with the UK slowed down significantly under the Biden administration.
• 😀 The election of Donald Trump in 2024 raised hopes for a revived UK-US trade deal, but optimism may be misplaced due to his protectionist stance and high tariff policies.
• 😀 Trump has emphasized 'America First' policies, including raising tariffs across the board, which could negatively impact UK exports to the US despite the 'special relationship.'
• 😀 Some of Trump’s advisors and UK politicians have had tense relationships, which may influence trade negotiations in unpredictable ways.
• 😀 A key obstacle to reaching a deal under a second Trump presidency is whether UK Prime Minister Keir Starmer would agree to US terms, such as allowing chlorinated chicken and pharmaceutical changes.
• 😀 There are potential geopolitical benefits for Trump in a UK-US trade deal, such as driving a wedge between the UK and the EU, further distancing the UK from EU regulations.

Q & A

What was one of the main reasons for optimism regarding a UK-US trade deal after Brexit?

One of the main reasons for optimism was the possibility of a UK-US trade deal that could boost the UK economy, especially after Brexit when the UK could negotiate its own Free Trade Agreement (FTA) outside of the EU framework.

What were the two main sticking points during the initial UK-US trade negotiations?

The two main sticking points were food standards, particularly concerning hormone-treated beef and chlorine-washed chicken, and the potential involvement of the US pharmaceutical industry in the UK's NHS drug procurement system.

Why did the UK government back down on certain demands related to food standards during trade negotiations?

The UK government backed down on weakening food standards after strong public and campaigner pressure, promising not to allow lower food safety standards like hormone-treated beef and chlorine-washed chicken into the UK market.

How did the change in US leadership impact the UK-US trade deal negotiations?

After Trump was replaced by Biden in 2020, the focus of the US shifted away from negotiating Free Trade Agreements, and the UK-US trade deal negotiations were effectively shelved due to the Biden administration's lack of interest in pursuing new FTAs.

What role did Donald Trump’s personal views play in his stance on the UK-US trade deal?

Trump's personal views on the European Union (EU) likely played a role in his support for a UK-US trade deal. He viewed the deal as a way to pull the UK away from EU regulatory standards and weaken EU unity, which he had criticized during his presidency.

Why could a UK-US trade deal potentially benefit both countries economically?

A UK-US trade deal could benefit both countries economically by reducing tariffs, such as the 25% tax on UK baby formula, which could increase bilateral trade. A 25% reduction in trade barriers could lead to significant increases in exports between the UK and the US.

What is the significance of the US's high tariffs on certain UK goods, like baby formula?

The US imposes a 25% tariff on UK baby formula, which effectively raises the cost of UK exports to the US. Reducing such tariffs could have a significant positive impact on UK exports to the US and overall trade relations.

Why might some people be optimistic about a trade deal under a second Trump presidency?

Some people might be optimistic about a trade deal under a second Trump presidency because he has expressed support for strengthening the special relationship between the UK and the US, which could encourage negotiations on a beneficial trade deal for both sides.

What are the potential challenges for Keir Starmer in accepting Trump’s terms for a UK-US trade deal?

Keir Starmer might face political challenges in accepting Trump’s terms, particularly on controversial issues like chlorinated chicken and pharmaceutical access to the NHS, which could be highly unpopular and politically damaging within the UK.

How does the UK’s trade relationship with the US impact the negotiation of a trade deal?

The UK is a major trade partner for the US, being the largest services trade partner in 2021 and the seventh largest goods export market in 2022. This interconnected trade relationship creates a strong economic incentive for both countries to finalize a trade deal, despite the challenges.