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British cars and steel are set to be shielded from the full force of Donald Trump’s tariffs as Sir Keir Starmer nears a trade pact with the US.
Trade negotiators from the UK and US are understood to be nearing an agreement to allow British car and steel exports to benefit from a lower tariffs up to an agreed quota.
The deal, which could come as soon as this week, would soften the US president’s plans for 25pc tariffs on UK vehicles imported into the US – as well as cut the rate applied to steel and aluminium imports.
British trade negotiators are currently in Washington seeking to tie up the agreement, with talks said to be progressing rapidly.
The acceleration of the pact, which was first reported in the Financial Times, suggests British negotiators are confident of winning partial concessions from the White House.
But the success of the negotiations may hinge on how much ground Britain has ceded to America’s demands.
In return for a tariff carve-out, the UK is reportedly set to offer concessions on a digital services tax applied to major American tech firms, which the White House has called an “extortion”.
Britain may also offer to cut duties on imports of US agricultural products, but is not willing to agree to US food standards, which would allow chlorine-washed chicken into the UK.
Disagreement in the US and UK trade pact is also said to remain over pharmaceuticals, with the Trump administrative still threatening tariffs on all pharma imports.
The talks came as Scott Bessent, US Treasury secretary, told Congress that the Trump administration could announce agreements with some of America’s largest trade partners as early as this week.
He said the administration was actively negotiating with 17 major trading partners, while a White House official recently told The Telegraph that a deal with the UK was likely within weeks.
A trade pact would give UK carmakers some breathing space after Institute for Public Policy Research warned that over 25,000 jobs in the UK car-making industry were at risk from the hike.
The US is the second-biggest market for UK car exports, after the EU, taking 17pc of overseas shipments.
Mr Trump’s car tariffs led Coventry-based Jaguar Land Rover to halt exports to the US for almost a month amid concerns over the effect of higher prices on sales.
Last month, Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders, told MPs that the impact of US tariffs would be “severe, significant and immediate” for the British car industry because 80pc of its production is sent overseas.