LONDON: British Prime Minister Keir Starmer has discussed progress on an “economic prosperity deal” between the United Kingdom and the United States in a phone call with US President Donald Trump, Downing Street said on Monday.
A government spokesperson said the two leaders spoke on Sunday night, with discussions focused on enhancing economic cooperation.
“The UK is working with the United States on an economic prosperity deal, building on our shared strength and commitment to economic security,” the spokesperson said, as quoted by The Guardian.
The discussion comes as the UK government faces pressure over trade relations with the US, particularly concerning the digital services tax, which levies charges on major tech companies—including American firms. The tax generates approximately £800 million annually.
When asked whether the tax was part of the discussions, the spokesperson declined to comment, stating only that “the UK will only do a deal in the national interest, which reflects this government’s mandate to deliver economic stability for British people.”
US-UK trade relations
The United States remains the UK’s largest single-country trading partner, with over £1.2 trillion ($1.6 trillion) invested in each other’s economies.
However, post-Brexit hopes of a comprehensive free trade agreement with Washington faltered after 2020, leaving officials to pursue more limited sector-specific deals.
According to The Times, discussions are now focused on a narrower agreement, potentially covering industries such as technology and artificial intelligence.
Concerns have arisen over reports that the UK government may consider reducing or eliminating the digital services tax as part of negotiations to avoid retaliatory US tariffs.
While the government has not confirmed any such proposal, Starmer’s administration is under increasing scrutiny regarding potential trade-offs in economic talks.
Budget cuts and economic policy
Meanwhile, the prime minister’s conversation with President Trump comes ahead of the government’s upcoming spring statement, with Chancellor Rachel Reeves signalling potential spending cuts.
Speaking on BBC Radio 5 Live, Starmer acknowledged that the government was looking to make savings “across the board.”
The Times reported that these cost-cutting measures could include reducing the civil service workforce by up to 50,000 jobs. Reeves had previously hinted at a 10,000-job reduction.
