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The Guardian
12-05-2025
- Business
- The Guardian
The Guardian view on UK trade: quiet re-engagement is a slow fix for Brexit's mistakes
In the theatre of 21st-century trade diplomacy, symbolism often eclipses substance. Last week's UK-India and US-UK agreements reveal a curious asymmetry: in both, the larger partner, in terms of GDP, leveraged the relationship for political ends, while the UK supplied what matters – regulatory prestige and high-income consumers. The former deal offers India a chance to climb the 'value chain' and access markets it cannot replicate at home. Donald Trump used his pact to stage a spectacle of grievance and control. Ironically, Britain – the smaller economy – behaves like the grown-up in both rooms. India turns the agreement into genuine gains. The UK's trade concessions offer a glimpse of Delhi's broader ambition: to pry open rich-world markets and access critical tech, as India positions itself as the west's manufacturing alternative to China. By contrast, Mr Trump's America focuses on image over impact. But Washington has tacitly conceded that the real action – on AI, digital services tax and UK pharma tariffs still in place under the deal – has yet to begin. The pact falls well short of the sweeping agreement Britain once sought with the US, and lacks the depth of the UK-India deal. The UK, once the imperial core, is now too small to be intimidating but too useful to discard. It is flattered and exploited not for its size, but for its ability to confer market credibility and post-Brexit validation. But it is on Europe that the spotlight is about to fall. Sir Keir Starmer knows closer ties are in the economic interests of the country, even if local elections remind him that Brexit wounds still fester. He should do the right thing – and seek a better deal when he meets the EU commission president, Ursula von der Leyen, next week in London. The EU's share of total UK trade is 20 times that of India. The UK's post-Brexit 'reset' with the EU is taking shape not through grand gestures but through a cautious choreography of selective re-engagement. Sir Keir is quietly rebuilding institutional ties – especially defence – while studiously avoiding the language of reversal. His promise of an 'ambitious' closer trade partnership sounds reassuring, but offers little beyond aspiration. There are limits to such low-key rapprochement: a proposed youth mobility scheme has run aground on the rocks of political symbolism. Ironically, in seeking to stabilise relations without unsettling a domestic narrative, he's inching towards alignment while insisting he's doing nothing of the sort. It is pragmatic but painfully performative. The UK should approach its trading relationship with the EU as a responsible nation, respecting shared rules without demanding the perks of membership. Sir Keir is doing that – a victory given past Brexit delusions. Britain need not rejoin the single market – freedom of movement remains politically unviable – but it can pursue a deeper customs partnership that reduces trade frictions and anchors regulatory cooperation without breaking Labour's manifesto pledges. In a sane world, fixing the Northern Ireland post-Brexit mess would be part of the plan: closer alignment on customs and standards with the EU would ease internal UK trade, reduce friction and help safeguard peace. A bespoke customs arrangement, coupled with deals in the energy, science and services sectors, would allow Britain to contribute to European growth while advancing its own strategic interests. This is not submission but mature interdependence. That is a role Britain is well suited to play in a multipolar, crisis-prone world.
The Independent
08-05-2025
- Business
- The Independent
How ‘two-tier Keir' turned into ‘two deals Keir' (with a third on the way)
For to pull off trade deals with the United States and India in two days is his biggest achievement yet as prime minister. He has shown skill and judgement in dealing with Donald Trump, resisting the temptation to denounce the US president for turning on America's allies, and negotiating patiently to secure a deal that will protect Britain from the worst of Trump's war on prosperity. These are deals that Starmer's Conservative predecessors breezily told us were in the bag. Boris Johnson must be fizzing with fury that the Brexit dividend that he trumpeted has cascaded from the slot machine when a Labour prime minister pulled the handle. Not once but twice in quick succession. The UK-India deal that was announced on Tuesday would be done 'by Diwali', Johnson said – three years ago. Rishi Sunak, with Kemi Badenoch as his business and trade secretary, tried to finalise the deal as part of his legacy. Now Labour has delivered and Badenoch pretended that it succeeded only by selling out on the tax treatment of temporary workers – until the Indians pointed out that she had agreed in principle to the same sensible measure to avoid double taxation herself. She looks ridiculous when Jacob Rees-Mogg, a keeper of the Eurosceptic flame, said the Indian deal was 'welcome' and 'exactly what Brexit promised'. Oliver Dowden, the former deputy prime minister from the other wing of the Tory party, praised Jonathan Reynolds, Labour's business and trade secretary, and said: 'Free trade is a win-win for both nations.' Now Starmer and his negotiating team have notched up another win-win, with the US. The mood in No 10 has swung wildly from optimism to deep gloom over the past few weeks, when the deal was essentially done but the final thumbs up or down from the imperial Oval Office was awaited. Last week I was told that the UK would be lucky to be in the third round of trade deals after it was reported that the Trump administration had divided countries into three categories of priority. Suddenly we have been moved from the back of Barack Obama 's queue to the front of Trump's line. The charm offensive has worked. An invitation to Buckingham Palace, a possible golf tournament and a generous helping of flattery seems to have paid off. Of course, it is not a 'full fat' free-trade deal, as the one with India is, and is more a damage limitation exercise that still leaves Britain worse off than it was before Trump declared a trade war. Nor have we yet seen the small print, but no caveats can take away from what is a huge success for Starmer in defending the British economic interest. The prime minister has not finished yet. He is not 'two-deals' Keir but 'three-deals' Keir, with the most valuable deal to come, with the European Union, at a summit in London in 11 days' time. In the space of two weeks, Starmer will have concluded trade deals with the most populous country in the world, with the richest country in the world and with the single market that is our most important trading partner. The deal with India may not add much to our GDP in the short term, but the growth potential of the Indian market is vast. The deal with the US may not get us back to where we were before Trump decided that American children had too many dolls, but it protects us from the worst of destruction. And the outline of a new relationship with the EU will not restore the losses imposed by Brexit, but easing the frictions of EU-UK trade is the single most important measure that can boost growth in the next few years. This hat trick of deals is just what Starmer needed after Labour's drubbing at the polls last week. Nigel Farage scoffed at the India agreement and will find something to complain about with the US deal, which was secured without Peter Mandelson, our ambassador to Washington, taking him up on his offer to put in a good word with his friend in the White House. But he should listen to Rees-Mogg and the band of free-market Brexiteer economists – Daniel Hannan, Julian Jessop and Andrew Lilico – who say these trade deals are just what leaving the EU liberated us to achieve. And they have been achieved by a Labour government.
Yahoo
08-05-2025
- Business
- Yahoo
Trump deal is a significant achievement for Starmer
The UK has been desperate for a deal of this sort with the US since President Donald Trump unleashed his wave of global tariffs. So have other countries. But it seems the UK has got there first - a significant achievement by Prime Minister Sir Keir Starmer and his government. Those close to the talks have been saying for some time that the shape of a deal was basically there, but that it was never quite clear when and whether the maverick president might sign off on what his negotiating team had thrashed out. That he has done so this week makes this a highly significant few days for UK trade, coming just two days after the full free trade agreement between the UK and India. The UK-India agreement is estimated to bring in a £25.5bn boost to bilateral trade and a £4.8bn annual increase in UK GDP, simplifying exports of UK goods to India and cutting taxes on Indian clothing and footwear exports. US and UK to announce deal to reduce tariffs today What tariffs has Trump announced and why? Faisal Islam: Trump tariffs may have helped drive UK-India trade deal There's a clear political boost for a prime minister who has been under pressure to rethink domestic policies after a disastrous set of local election results for Labour last week. He has now finalised the deal with India his Conservative predecessors could not reach, and come to some sort of agreement with the US - even if it's short of the comprehensive free trade agreement the Conservative governments talked about reaching and never managed. President Trump appeared to allude to the agreement when he posted on social media on Wednesday night: "Big News Conference tomorrow morning at 10:00 A.M., The Oval Office, concerning a MAJOR TRADE DEAL WITH REPRESENTATIVES OF A BIG, AND HIGHLY RESPECTED, COUNTRY. THE FIRST OF MANY!!!" The UK side had been expecting an announcement today but was taken by surprise when US media broke the news overnight. Though Trump has called it a "trade deal", this is likely to be more limited than that - a more specific deal to reduce tariffs on specific things. The US president has announced - and scaled back - a swathe of tariffs on countries around the world this year. The US remains the UK's top trading partner, purchasing close to £200bn in British exports. Currently, most goods imported from the UK to the US face a blanket 10% tariff. The UK - like other countries - has also been hit with 25% tariffs on steel and aluminium exports to the US as well as a 25% tariff on cars and car parts. From the British side, they specifically want to reduce tariffs on British steel and cars. From the US side, they want something on pharmaceuticals and technology - which in total account for the majority of goods exports. Andrew Griffith, the shadow business and trade secretary, says a US-UK deal "would be welcome and another Brexit benefit". However, Griffith says restoring growth to the economy "also requires reversing Labour's attacks on business" and reducing "high energy costs". "Conservatives will closely scrutinise any deal which should first be announced to Parliament," he said. Meanwhile, Liberal Democrat Treasury spokesperson Daisy Cooper says Parliament "must be given a vote" on the deal so it can be "scrutinised". "A good trade deal with the US could bring huge benefits, but Liberal Democrats will oppose any concessions that threaten our NHS, undermine our farmers or give tax cuts to US tech billionaires," she said. "If the government is confident the agreement it has negotiated with Trump is in Britain's national interest, it should not be afraid to bring it before MPs." There is a broader point too. Sir Keir has made a point of forging a warm relationship with Trump - warmer than many expected. There has also been growing grumblings about what dividend he was receiving for his efforts, on trade, Ukraine and any number of other issues. Here is his answer. Sign up for our Politics Essential newsletter to read top political analysis, gain insight from across the UK and stay up to speed with the big moments. It'll be delivered straight to your inbox every weekday.
Times
07-05-2025
- Business
- Times
Is India trade agreement good for UK business? The winners and losers
O n the signing of the biggest trade deal since Brexit, between the UK and India, each country chose to champion different areas of their economies that would benefit. India's trade minister, Piyush Goyal, claimed the agreement would benefit 'Indian farmers, fishermen, workers'. Jonathan Reynolds, the UK business secretary, said that the deal would unlock growth in areas as diverse as 'advanced manufacturing in the North East to whisky distilleries in Scotland'. Overall, the deal will cut Indian tariffs on 90 per cent of product lines, while 99 per cent of Indian exports to the UK are expected to benefit from zero duties. It is expected to increase trade between the two countries by almost 40 per cent and boost the UK's GDP by £4.8 billion within 15 years.
Wall Street Journal
07-05-2025
- Business
- Wall Street Journal
Q&A: As the U.S. Turns Its Back on Free Trade, What Are Other Countries Doing?
Faced with U.S. barriers, countries are attempting to ease trade among themselves. Max Colchester and Kim Mackrael report on some of the latest deals . A: On Tuesday, the U.K. and India announced the completion of a trade agreement that had been stuck for several years. Britain said India had reduced duties on 90% of goods, and within a decade, most of those will become tariff-free. The U.K. in turn has cut taxes on Indian products, including footwear and jewelry, and made it easier for Indian professionals, including chefs and yoga teachers, to enter the country.
