The three stumbling blocks to a UK trade deal with Trump’s America
Donald Trump’s return to the White House has reignited calls for a free trade deal between the UK and the US.
Shortly after the UK departed from the EU, initial negotiations on such a deal took place between Britain and America during Trump’s first presidential term.
Progress on this, however, was halted by the Biden administration and in 2023, then-business secretary Kemi Badenoch stated that “the US is not carrying out any free trade agreements with any country”.
However, there are still hopes that the shelved deal could be revisited if the US and UK overcome certain obstacles.
Badenoch, now Conservative leader, has called on the Government to commit to revitalising a free trade agreement (FTA) with the US.
Writing in The Telegraph this weekend, she said: “A US-UK FTA is one of the biggest Brexit prizes.
“The opportunities for collaboration in artificial intelligence, global supply chains, energy security, and financial services, among other issues, are bottomless and boundless.”
She argued that Trump could use such an agreement to “send strong signals to France and Germany that positive engagement with his administration could yield benefits”.
However, sticking points in the last round of negotiations could still complicate any future trade deal between the US and the UK.
Access to the NHS
Efforts to protect the NHS could be a major obstacle in trade deal talks between the UK and the US during President Trump’s second term.
In the past, the US has pushed to include the NHS in trade negotiations, aiming to secure access to the UK’s healthcare market for American pharmaceutical companies.
US trade plans, outlined in a set of policies known as Project 2025, proposed greater “openness to foreign competition” in health services, potentially allowing American firms greater influence over NHS spending and drug pricing.
One of the primary US goals is to have the NHS pay “market-derived” prices for medications, a system that would drive up drug costs for the UK.
The NHS currently uses its large-scale purchasing power to negotiate significant price reductions—much lower than those typically found in the US, where private healthcare markets drive up prices.
This difference in approach has led US negotiators to argue that Americans, who pay much higher prices for the same medications, are “subsidising” global healthcare costs.
In addition, the US has pushed in the past for extended drug patents, which would delay the introduction of more affordable generic medications in the UK.
In the NHS, once a drug’s patent expires, generic versions become available at a much lower price, helping the NHS manage its budget and keep costs down for patients.
If the US were to secure longer patent protections in a trade deal, this would likely raise costs for the NHS, which could threaten the health service’s financial stability.
Significant opposition has been raised in the past to suggestions that the US could gain influence over the UK’s healthcare system.
In 2020, Labour failed to pass an amendment to the Trade Bill which sought to ensure that the NHS would be exempt from any future trade agreements.
It was voted down, with the Conservatives repeatedly insisting at the time that the NHS was “not on the table” for trade negotiations.
With this level of opposition on all sides, it is unlikely that the UK would concede to any trade agreement with the US that included access to the healthcare market.
Impact on UK agriculture
The UK’s agricultural standards and practices present a significant obstacle to a potential US-UK trade deal due to contrasting regulations, differing approaches to food safety, and the vastly different scales of farming operations in the two countries.
According to documents leaked in 2019, the US previously told UK officials that it considered its food safety system to be “the gold standard”, but acknowledged that its approach is different to the EU’s.
For example, while the EU is trying to reduce the amount of chemicals in food, the US continues to use them, including chlorine, as “a final double check to remove any traces of pathogens”.
However, in November 2020, the government vowed not to allow chlorinated chicken or hormone-fed beef—foodstuffs that are on sale in the US—on British supermarket shelves.
Another challenge arises from divergences in animal welfare standards. UK farmers and policymakers are reluctant to lower their standards to allow US imports that may not meet the same levels of animal welfare.
Beyond standards, the economic scale of US agriculture presents a structural challenge. US farms operate on a much larger scale than those in the UK, enabling American producers to offer products at lower costs.
While UK farmers might compete in niche, high-quality products, they may struggle to compete with the vast output and lower prices of US commodity products.
Additionally, there are concerns that adopting US food standards and practices could harm the UK’s agricultural industry’s reputation, making it less competitive in the EU market.
To protect UK agriculture, the government gave statutory powers to the Trade and Agriculture Commission in 2020.
The commission, on which the National Farmers’ Union and the Food and Drink Federation sit, can be asked to produce an independent report on the impact on animal welfare and agriculture of each free trade deal the government signs after Brexit.
Their recommendations on whether to accept or reject the deal will then be laid in parliament at the start of the 21-day scrutiny period.
Anxiety about the impact of a US-UK trade deal is likely to be high among UK farmers, and proposals to lower food standards or increase market impact could struggle to get the sector’s support.
Impact on Brexit ‘reset’
There has been speculation that Trump could use trade negotiations with the UK to encourage further separations from the EU after Brexit.
But, this comes in direct contrast with the current government’s pledge to kick-start a “reset” with the bloc.
While Brexit freed the UK to negotiate its own trade deals, the extent of regulatory divergence from the EU—especially in areas like food standards and environmental policies—affects its options and bargaining position with the US.
The EU remains the UK’s largest trading partner, and as such, regulatory alignment with the EU is crucial for maintaining access to European markets.
The UK agreed to certain commitments in the Brexit Withdrawal Agreement, such as adherence to EU standards in specific areas, to avoid barriers to trade.
This alignment restricts the UK’s flexibility to adopt US-style regulatory practices in a trade deal, as these could conflict with EU requirements. Food standards are one such area where the UK may be forced to prioritise EU ties over US demands.
The new Labour Government, however, may want to focus on an improved trade deal with the EU.
The trade deal drawn up under Boris Johnson and the deal on EU access to British fishing waters are up for review in 2026.
There are also hopes that the UK and EU can draw up new agreements on animal and plant health rules to reduce border checks.
Both Labour and the EU also want to formalise foreign policy and security cooperation, which has been run on an ad hoc basis since Brexit.
Meanwhile, the EU has also been calling for a youth mobility scheme, which would allow under-30s to live, work and study more freely in both jurisdictions.
With the EU on the UK’s doorstep, the Government may seek to prioritise its relationship with the bloc over restarting trade negotiations with the US.
