Has Rachel Reeves blown the chance of a trade deal with Trump?

The pictures of a triumphant Rachel Reeves holding aloft a US trade deal as she boards a plane home from Washington should have been all over the front pages this morning. After spending the weekend in Washington, and with a personal meeting with the US Treasury Secretary Scott Bessent, the advance briefings were that a deal with the US was very close. Instead, there are now warnings from Pat McFadden that it may take longer than expected. Has Labour blown the chance to sign the first trade accord with the Trump White House? A chance like this is unlikely to come again. 

A trade deal with America was never completely in the bag. But ahead of her trip to Washington this weekend, there were lots of hints that the Chancellor Rachel Reeves might finally get a trade deal with the US over the line. Given that the States are our largest single trade partner, it would have come as a welcome boost for the British economy. And since it would have made the UK the first country to get a deal with President Trump, it would have been a rare bit of positive news about the country, and made a welcome contrast to the endless warnings of rising taxes, stagnant growth and broken fiscal rules. It would have been a major triumph.

The trouble is, it didn’t happen. The government’s message has now changed to one of how it is all much harder than expected.

Two things appear to have gone wrong. First, the government has not been willing to make the kind of concessions that would get the trade deal over the line. It needed a big, bold move, such as allowing chlorinated chicken, or scrapping the tech tax, to persuade the White House it has won a significant victory, and to allow it to make concessions in return. But the robotic Reeves clearly didn’t grasp that she needed to offer something to the other side.

Secondly, the Starmer government is putting far too much energy into its “reset” with the EU, with Reeves clumsily arguing as she headed off for Washington that Europe mattered far more than America. But while the reset may be valuable, it won’t make much difference to the economy as we already have a free trade agreement with the EU (otherwise known as the Brexit agreement).

As the dust settles, one point is surely clear. The UK could have been the first country to get a major trade agreement with President Trump, and this weekend was the moment to make it happen. But the government blew the opportunity – and that will prove expensive.