US working on ‘major trade deal’ with UK, says Trump

Donald Trump has touted plans for a “major trade deal” with a post-Brexit UK while rekindling his rhetorical trade wars with Brussels by lashing out at a “very protectionist” EU.

The intervention from the US president came as part of an early-morning flurry on Twitter on Tuesday and reinforced the fundamentally different view of the UK and EU trade relationship than held by his predecessor Barack Obama. Mr Obama had warned that Britain would be at the back of the queue for any trade talks with the US should it leave the EU, while Mr Trump has regularly hailed a US-UK deal as a priority. 

“Working on major Trade Deal with the United Kingdom. Could be very big & exciting. JOBS! The E.U. is very protectionist with the U.S. STOP!” the US president tweeted.

Mr Trump’s endorsement of Britain came as Liam Fox, the UK trade minister, addressed members of Congress on the second day of a visit to Washington designed to kick off exploratory discussions about a trade deal even as EU-US negotiations initiated by Mr Obama have been frozen by the new administration. 

But it also gazumped careful efforts by the May government and Robert Lighthizer, Mr Trump’s own US trade representative, to reduce expectations of any imminent US-UK deal, even as opposition to one begins to surface in Britain. The UK is not allowed to hold formal trade negotiations with any other country until it leaves the EU. 

In a joint statement released after the first meeting of a US-UK trade working group on Monday the two trade ministers said their initial aim was ensuring “continuity” for US and UK businesses post-Brexit and preparing for negotiations over a “possible” deal.

As part of that work Mr Fox on Tuesday released a report on the UK’s trade with all 435 US congressional districts aimed at reinforcing the importance of the commercial relationship with trade between the US and UK now worth more than £150bn ($200bn) annually

While any substantive negotiations would not begin until after the UK’s exit from the EU in March 2019, Mr Fox said any agreement could happen quickly and in parallel to the UK’s own trade talks with the EU. “We’ll do all the groundwork and due diligence now so that when we do leave the European Union we’ve got a head start on a negotiated agreement,” he told Bloomberg TV.

In a sign of how difficult those negotiations will be, however, Mr Fox has spent most of his visit to Washington fending off questions about whether any pact would result in imports of US chlorine-washed chicken into the UK.

Anti-trade campaigners and consumer groups in Europe have for many years used US poultry production practices as a proxy for fears that any deal with the US would undermine EU food safety and other standards. Alongside chlorine-washed chicken they have also argued that any deal with the US would force European farmers to embrace genetically modified grains and hormone-treated beef. 

The powerful US farm lobby counters that, like GMOs and US beef, the practice of using chlorinated water to wash chicken is safe and that EU rules are nothing more than a trade barrier designed to protect European farmers. In January 2009 the administration of George W Bush took the EU to the World Trade Organisation over its poultry hygiene rules. But that case has never been resolved and the Obama administration sought instead to address the issue in negotiations over a broader transatlantic Trade and Investment Partnership.

Mr Trump’s “very protectionist” broadside on Tuesday is the latest sign of how far those EU talks are from resuming although both Wilbur Ross, his commerce secretary, and Mr Lighthizer have raised the possibility in recent months. The president and aides have also railed against Germany’s trade surplus with the US and accused Berlin of exploiting a weak euro to gain a trading advantage over the US. 

It also comes as EU officials are bracing for a decision by Mr Trump over whether to restrict steel imports into the US for national security reasons with Germany and other European producers likely to be hit by the move.

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