Prime Minister Keir Starmer claims his close relationship with President Donald Trump will secure a long-desired trade deal between the United States and the United Kingdom.
Speaking to the Financial Times during a visit to Kyiv, Starmer dismissed Elon Musk’s vocal criticism of his leadership and emphasized that Trump’s presidency presented an opportunity, not a challenge.
“What matters to me is my relationship with the U.S. and my relationship with President-elect Trump,” Starmer said. He shrugged off rumors that Musk had allegedly sought to remove him from office, calling it “noises off” and insisting his focus remained on strengthening UK-US ties.
Trump, who takes office on Monday, has already tasked Musk with slashing U.S. bureaucracy. Starmer vowed to be equally “ruthless with cuts” in the UK to meet Labour’s fiscal rules.
From dinner at Trump Tower to potential tariffs
Starmer’s confidence in his connection with Trump is thanks to their September meeting at Trump Tower in New York, where the President-elect hosted the Prime Minister for a private dinner. “He made a huge effort,” Starmer said, recalling the evening.
“He came to New York to have dinner with me, and I was very grateful for that. Tariffs aren’t in anybody’s interests,” said the Prime Minister. While previous British leaders have failed to lock down such an agreement since Brexit, Starmer sees no reason to choose between a deal with Trump or the European Union.
“Our ambition is to have a deal of some sorts with the U.S.,” he said, adding that a trade partnership with the world’s largest economy is non-negotiable.
Still, Trump’s ties to Starmer’s political rival Nigel Farage and accusations from Trump’s campaign last October that Labour interfered in the U.S. elections complicate matters.
Chagos Islands and UK-China trade under scrutiny
Starmer faces additional challenges with the U.S. over the Chagos Islands, home to the strategic Diego Garcia military base jointly operated by the UK and the U.S. The Prime Minister had planned to transfer sovereignty of the islands to Mauritius but has delayed the deal following concerns from Trump’s team.
They fear the transfer could open the door to increased Chinese influence in the region. “I think it’s right that he scrutinizes it,” Starmer said of Trump’s request to review the agreement. However, he insisted the deal would ensure the base’s long-term security.
At the same time, Starmer’s efforts to expand UK-China trade could test his relationship with Trump. When asked if Trump would support that, Starmer said: “Let’s see. The U.S. is our closest ally. It’s usually best not to get ahead of ourselves.”
Stagflation and labour’s economic challenges
Meanwhile, the UK’s 2% inflation target is still out of reach, while the economy grew only 0.1% in November, missing forecasts.
Starmer faces growing pressure to demonstrate that Labour’s fiscal plans, led by Chancellor Rachel Reeves, are working. Critics have targeted Reeves’ October budget, which introduced £40 billion in tax increases, arguing it disproportionately burdened businesses.
Starmer defended the budget, claiming it laid the groundwork for stability and growth. Borrowing costs have also been a source of contention. The UK’s 10-year gilt yield hit a 15-year high of 4.93% last week before falling to 4.65%. Starmer acknowledged the volatility but reiterated his commitment to Labour’s fiscal rules.
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