UK's timeline for US deal too ambitious, says ex-trade advisor Falconer

Business Standard

3 days ago

Trump's tariffs are already weighing on the UK's beleaguered steel industry, with some manufacturers saying American orders have dried up
Bloomberg
Prime Minister Keir Starmer would need President Donald Trump to be 'extraordinarily generous' to meet his ambition of finalising the UK-US tariff deal in two weeks, according to Britain's former top trade negotiator.
Crawford Falconer, who led British trade negotiations until late last year, cast doubts on the UK government's efforts to settle remaining issues within a fortnight. While Starmer and Trump announced the so-called Economic Prosperity Deal to great fanfare in early May, numerous details have yet to be finalised.
'My assumption is that they're expecting the US to be extraordinarily generous and understanding toward them,' Falconer told Bloomberg News. 'Because otherwise I think it would take longer than two weeks.'
That assessment will come as a blow to Starmer as he tries to seize on the UK's status as the first country to agree to a trade deal with Trump this year. On Tuesday, the White House ramped up the pressure, giving the UK five weeks to resolve outstanding issues or risk a doubling of US tariffs on British steel and aluminum imports to 50 per cent.
Trump's tariffs are already weighing on the UK's beleaguered steel industry, with some manufacturers saying American orders have dried up. Starmer dismissed concerns in Parliament on Wednesday, telling lawmakers he expected a resolution within a 'couple of weeks.'
'The deal we agreed is a good deal for UK steel producers,' the government said in a statement on Friday. 'We will continue to work with the US Commerce Department to implement our agreement as soon as possible so all UK steel producers can start to feel the full benefit.'
Key to the deal is Trump's promise to remove all tariffs on British steel exports to the US. Although Trump spared the UK the 50 per cent rate imposed on steel from the rest of the world, he reserved the option to apply it if negotiations haven't concluded by July 9.
Remaining hurdles include the Chinese ownership of British Steel, the struggling producer the UK government took over in April. There's also a question about whether the US will require British steel to have been melted and poured in the country.
Tata Steel UK can no longer fulfill that provision. It closed down its last blast furnace in 2024 and a new electric arc furnace isn't yet up and running, so the company has been importing steel substrate from abroad.
In a statement Friday, Tata Steel UK Chief Executive Officer Rajesh Nair said his company would need to import steel substrate until late 2027. 'It is therefore critical for our business that 'melted and poured in the UK' is not a requirement to access the steel quotas in any future trade deal,' Nair said.
British Steel is facing a different set of problems. While the UK government took control of its plants earlier this year to prevent them closing, the company is still legally owned by China's Jingye Group.
The general terms of the UK-US deal say the UK must meet 'US requirements' on the 'nature of ownership of relevant production facilities.' That is widely understood to mean that Trump would not grant preferential tariff rates to a company with connections to a strategic rival such as China.
'They will want clarity on what that means,' Falconer said. 'It's difficult for me to believe that the US will be confident that it would give the green light to Jingye, if it is uncertain about what the actual commercial arrangements are for British Steel going forward.'
Finding a buyer for the loss-making manufacturer in the near-term seems unlikely. Meanwhile, fully nationalizing British Steel could bring its own problems, since the US generally tries to avoid giving state-owned entities preferential access to its market.