Trump’s Pageantry Could Boost UK Trade Deal Amid Rising Costs

Trump’s Trade Strategy and the UK: A Delicate Balance

Donald Trump has been leveraging his signature aggressive tactics by publicly announcing tariff increases for various countries, aiming to pressure counterparts into submission. However, in the case of the United Kingdom, his focus on the royal family appears to be working in favor of his host country.

This week’s trip to Scotland is just the beginning of Trump’s planned official state visit in September, where he will meet King Charles. During this time, the president is expected to finalize details of a major trade deal with the UK. The discussions will take place alongside rounds of golf at his Scottish course, with key products such as cars, digital services, and U.S.-raised chicken and beef all under consideration.

A source close to the White House told the Daily Mail that Trump is aiming for a successful state visit in September without any issues. As a result, he is unlikely to impose harsh tariffs on the UK before then. This strategy reflects Trump’s desire for a grand welcome, surpassing the one he received during his first term with Queen Elizabeth.

British Prime Minister Keir Starmer was among the first world leaders to successfully engage with Trump by presenting him with a letter from the King at the White House. Now, the two are set to meet at Trump’s Turnberry golf course, where trade talks will be a central focus.

“This is a pretty broad framework still, so it would be hashing out the more specifics there,” said a White House official. The products at stake span the industrial and agricultural economies of both nations.

Trump publicly praised Starmer during his trip to Scotland, signaling a soft approach for now. “He’s a good man. He got a trade deal done,” Trump said. Rather than focusing on the finer points, he emphasized celebrating the agreement, which sets a 10 percent baseline tariff for imports of UK products. “It’s a great deal for both,” he added.

However, the prospects for a trade deal with the European Union remain uncertain, with a 50-50 chance, according to reports. It is possible that the EU could accept a 15 percent U.S. baseline tariff. One question facing the U.S. side is how much relief to grant Britain on steel and aluminum tariffs. Trump imposed a 50 percent Section 232 tariff on steel and aluminum globally last month, with a 25 percent hit on the UK amid trade talks.

The U.S. has exempted British jet engines from special Section 232 tariffs, but there is ongoing discussion about British pharmaceutical imports, where some flexibility may be granted.

Another significant issue is the UK’s Digital Services Tax, which generated over $1 billion last year. American negotiators have long viewed this tax as a form of tariff on U.S. tech giants. Trump managed to get Canada to eliminate its Digital Services Tax after threatening to end all trade discussions with the country. “Trump forced Canada to get rid of their digital services tax, and the UK and the EU are next,” an insider said.

The trade negotiations between the U.S. and the UK are complex, despite their long-standing ‘special relationship.’ For instance, the May 8 deal set a 100,000 quota for UK auto imports like Jaguars, Land Rovers, and Mini Coopers, with a 10 percent tariff rather than the larger 25 percent one. A UK 10 percent tariff on U.S. cars remains in effect, but the deal includes an unspecified ‘accompanying arrangement for attendant auto parts.’

The two countries also agreed to work constructively on enhancing market access for agricultural products. This means U.S. poultry, often referred to as ‘chlorinated chicken’ by European and British trading partners, will find a new market. However, the text announced by Trump merely states that products must comply with the importing country’s sanitary and phytosanitary (SPS) standards and other mutually agreed standards.

What’s on the Table in Trade Talks

  • Trump’s steel and aluminum tariffs
  • UK pharmaceutical exports
  • UK auto parts exports
  • Digital Services Tax that hits Big Tech
  • U.S. exported chicken and beef
  • Trump’s drive to host the British Open
  • Upcoming State Visit with King Charles

The various categories are outlined in a Harmonized Tariff Schedule published by the office of the U.S. Trade Representative. Chicken alone is categorized into multiple types, including thighs, frozen chicken, ground chicken, breast, meal, and even paste.

“Are they taking full chickens, or live chickens? Are they taking frozen chicken meat? Are they taking prepared chicken meals with air-tight containers?” asked a White House official.

Amid these complex negotiations, Trump also has another goal in mind. The meeting with Starmer takes place at Turnberry, a celebrated course that has not hosted the British Open since Trump bought it. Trump and the Trump Organization have long sought to land the tour.

White House Press Secretary Karoline Leavitt, who accompanied Trump for his first round of golf in Scotland, stated that Trump and Starmer will meet to refine the historic U.S.-U.K. trade deal announced in May. She highlighted recent trade deals with Japan, Indonesia, and the Philippines, saying, “He came in as the closer in all three of those.”

As of mid-week, Trump had sent out 25 trade letters, with a new baseline emerging of a 15 percent tariff on products entering the U.S. The risks to various sectors are real, as seen in the impact of UK tariffs on American spirits. Between 1997 and 2018, when there were no tariffs on distilled spirits between the two countries, bilateral trade increased by 212 percent, reaching $1.4 billion. However, subsequent tariffs led to a 35 percent decrease in trade.

A UK 25 percent retaliatory tariff on U.S. Whiskeys in 2018 and 2021 caused a 41 percent drop in exports there. When the tariff was lifted, exports rebounded to $137 million in 2024. Chris Swonger, CEO of the Distilled Spirits Council, is meeting with his Scotch Whisky Association counterpart to advocate for reducing tariffs to zero.

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