People were perhaps “days” away from losing their jobs without the new trade deal between the US and the UK, the Trade Secretary has indicated.
Jonathan Reynolds told the BBC’s Newsnight programme that “we were at risk of thousands of people losing their jobs” without an agreement.
Sir Keir Starmer had earlier hailed the “historic” accord. As part of the agreement, US import taxes which had threatened to cripple British high-end carmakers were cut from 27.5% to 10%, while the 25% tariff on steel has also been removed entirely.
The blanket 10% tariff imposed on imports by US President Donald Trump as part of his sweeping “liberation day” announcement remains in place, but talks are ongoing in a UK effort to ease it.
Mr Reynolds told the BBC that without the “historic breakthrough, we were at risk of thousands of people losing their jobs”.
Asked how quickly that might have happened, he said “we were very, very close”, and pushed further on whether that meant days or weeks, he replied: “Days.”
“This was very, very serious, it means people would have lost their jobs without this breakthrough and it would have been a real economic hit to the UK,” Mr Reynolds later added.
He had earlier said the US was an important market to firms such as Jaguar Land Rover (JLR), Aston Martin and Bentley and that a 25% tariff was a “very difficult business proposition” in a competitive industry.
The general terms for the agreement were published late on Thursday, and stated that the UK and the US are “beginning negotiations” to “develop and formalise the proposals” that have been made.
It also suggested that that either country could “terminate” the “arrangement” in the future with written notice, and it could be further altered in the future at the request of either side.
“On request of either country, the United Kingdom and the United States will consult with a view to considering any changes that may need to be made to this arrangement to ensure that it remains mutually beneficial,” the general terms for the deal say.
Sir Keir and Mr Trump confirmed the deal in a conversation that was broadcast live on both sides of the Atlantic on Thursday afternoon.
The Prime Minister took the call at a JLR plant in the West Midlands, and said it was “important” for him to go back to the factory that he visited in the days after the tariffs were first announced.
The timing of the announcement came as a surprise, coinciding with VE Day where the Prime Minister was heavily involved in events to mark the 80th anniversary of the end of the Second World War in Europe.
The Liberal Democrats have been pushing the Government to offer MPs a vote on the deal, but a Treasury minister appeared to suggest on Thursday evening that would not happen.
Asked on the BBC’s Question Time programme whether there would be a vote, Exchequer Secretary to the Treasury James Murray said “it’s my understanding it won’t but I’m not chief whip”.
The deal is the first the US has announced since Mr Trump’s tariff regime was introduced last month, and speaking to the Prime Minister from the White House, the US president said the agreement was a “great deal for both countries”.
Previous speculation had suggested the UK would revise the digital services tax as part of a deal, with the levy mainly applying to US tech companies.
But Number 10 said on Thursday the tax would remain unchanged, with the two countries agreeing to work on a separate digital trade deal that would reduce paperwork for British firms exporting to the US.
The deal also does not include any concessions on the Online Safety Act or the NHS, the Business Secretary said.
Asked whether that could be ruled out for the future, Mr Reynolds told BBC Newsnight: “Isn’t this unfortunately how we do things in the UK?
“We’ve got the best result of any other country in the world, we’re immediately speculating that somehow it’s going to be worse in the future.
“We said very clearly the safety of children in the UK is never something we would negotiate with.”
He added: “We’ve got to stop being so insular in the UK and understand there will be asks from other countries, but we can refuse those and we can negotiate and we can get what we need in the UK to pursue our own interests.”
The agreement comes after weeks of speculation about what shape a deal could take.
Previous governments have attempted to secure a free trade agreement with the US, but with no success, however the impact of Mr Trump’s tariffs made it a high priority for Sir Keir.
Chancellor Rachel Reeves said she was “proud” of the Prime Minister’s role in getting the agreement over the line.
She wrote in The Times: “There are those who would have advocated we take a different approach. That we cave into the performative politics, which would have made for a good soundbite, but would have harmed our economy, threatened business, and put working people out of work.”
Other measures in the deal include a provision that beef exports will be allowed both ways, with officials insisting there will be no weakening of food standards for meat sent to Britain.
According to The Associated Press, an unnamed British official said the US president had withdrawn an invitation to agree a trade deal before April 2 so he could impose his sweeping Liberation Day tariffs.
Mr Trump posted on Truth Social on Thursday evening to say that the deal is “GREAT for our FARMERS and RANCHERS”.
The UK will also have “preferential treatment whatever happens in the future” when it comes to pharmaceuticals, as Mr Trump considers import taxes on drugs and medicines.
Conservative leader Kemi Badenoch said the UK had been “shafted” by the agreement, and one of her MPs suggested Mr Trump looks to “extort” from people.
Graham Stuart told Question Time he does not think it is a “great deal”.
He said: “The truth is that’s what he does, that he seeks to shaft people. That’s his business career, isn’t it?”
“It’s what he’s done, Donald Trump,” Mr Stuart added.
“He seeks to extort from people, and that’s what he’s done. He’s a classic kind of bully, and he’s the worst face of capitalism, and he’s taken that into the most powerful country in the world.”
