Here’s Britain’s pitch to Donald Trump on a new tech pact

LONDON — Keir Starmer’s government is pinning hopes for closer economic ties with the United States on a trade pact that talks up the West winning the technology race — and avoids awkward chat about regulations.

A document prepared by the U.K. side outlines Britain’s ambitions for an “economic partnership” on technology. It comes as the U.K. is racing to secure carve-outs that shield it from some of the Trump administration’s more stringent trade policies, including tariffs.

In the document the U.K. makes its case by pointing out the countries are the only two allies in the world with trillion-dollar tech industries — and argues it is vital that Western democracies beat their rivals.

No. 10 has previously said it is aiming for “moonshot missions” in AI, quantum and space. The document remains vague on these missions, talking about collaboration on R&D, talent and procurement as an initial phase of the partnership.

Britain’s pitch notably avoids mention of thorny issues like tariffs and regulation for now. But tariffs could come to a head as soon as Wednesday, when 25 percent steel and aluminum tariffs come into effect. U.K. negotiators are pressing for a last-minute exemption.

The pitch also echoes some of the Atlantic Declaration, an agreement which the countries’ former leaders, Rishi Sunak and Joe Biden, signed in June 2023. That pact resolved to “to partner to build resilient, diversified, and secure supply chains and reduce strategic dependencies.”

But the latest document, which officials hope will pave the way for a deal this year, is far narrower and more tailored to Trump; gone is talk of working together on clean energy or health, which was in the Atlantic Declaration.

The language should please key figures in and close to the U.S. administration who have spoken about Western democracies needing to win the tech race, including Vice President JD Vance, Palantir chief executive Alex Karp, and Scale AI’s managing director Michael Kratsios, who is joining the White House as director of science and technology policy.

Mandelson’s connections

After meeting Starmer last month, Trump said that there was a “very good chance” of the U.K. and U.S. agreeing a deal. It is a priority for Britain’s ambassador to Washington D.C. Peter Mandelson, who is referring to the deal as “MEGA” (Make our Economies Great Again).

But Mandelson is bringing more than Trump-friendly acronyms to the table. He’s well positioned to parlay with key U.S. decision makers.

The lobbying firm Mandelson founded, Global Counsel, counts Palantir as a client. Palantir founder Peter Thiel was an early Trump backer, and Starmer, his National Security Adviser Jonathan Powell, and Mandelson met with Palantir chief executive Alex Karp after the Trump face-to-face in February. Mandelson resigned from Global Counsel before his appointment, though was reported in late January to still retain shares in the company.

Vance, who will play a role in any agreement, also has close links to Thiel, while Kratsios was Thiel’s chief of staff earlier in his career.

Palantir founder Peter Thiel was an early Donald Trump backer. | Marco Bello/Getty Images

The argument that the West needs to work together to win the tech race has more recently been made by U.K. Technology Secretary Peter Kyle, including at a speech at the Munich Security Conference. “It is incredibly important in these technologies that you have Western liberal democracies leading the race,” he told the BBC last month.

The U.K.’s pitch document doesn’t elaborate on that theme, but use language intended to appeal to the U.S. administration. It talks about combining the two countries’ “strengths” so that Western democracies can win the tech race.

There has been growing talk in London and Washington of a “Western alliance” on AI, something British Prime Minister Keir Starmer discussed with Scale AI founder Alex Wang in No. 10 last month.

Talking Trump-lish

There is nothing in the document on nearer-term wins like a digital trade agreement, or specific investments. But by raising procurement it opens the door to deals between the U.K. government and U.S. tech firms. Both Scale AI and Anthropic are hiring U.K. staff to sell their technology to the public sector.

An industry figure told POLITICO that the U.K. wants to finalize the agreement quickly and that national security — which cuts across all three areas — would be a big part of it

U.K. officials want the deal to build on AUKUS — the military alliance between Australia, the U.S., and U.K. —  which already includes working together on AI, quantum and space.

They see it as a long-term strategic play, but admit in private it will also have nearer-term regulatory implications. U.S. Republicans and friendly Big Tech executives have attacked Britain’s Online Safety Act as “censorship” and there are fears in the U.K. that it will be forced to water down its online content moderation regime.

In an attempt to sidestep that issue, Britain is pitching its online safety rulebook to the White House as a move against pedophiles, terrorists and criminals online, rather than anything to do with freedom of speech.

A No. 10 spokesperson said last week the prime minister was clear the government would not waiver on protecting children from illegal content online, adding that the Online Safety Act is “not up for negotiation” in trade discussions.

Ever-closer union

The document signals the U.K. is chasing ever closer alignment with the U.S. on tech, something Vance said he wanted to see from allies in a speech at the Paris AI Action Summit in February.

The U.K. quickly responded by joining the U.S. in refusing to sign the Paris AI summit declaration, renaming and refocusing its AI Safety Institute to become the “security institute”, and putting plans for AI legislation on the backburner.

Britain’s AI strategy relies on foreign investment to build its infrastructure, and a government official told POLITICO the U.S. was one of the few places where that capital could come from. 

After meeting Keir Starmer last month, Donald Trump said that there was a “very good chance” of the U.K. and U.S. agreeing a deal. | Phoro by Carl Court via Getty Images

While the U.K. bigs up tech collaboration as part of its proposed deal, it’s not the only issue at hand. The U.S. has signaled it will use tariffs and trade negotiations to push back strongly against the U.K.’s digital services tax on Big Tech firms.

“The UK and US have a strong economic relationship with $1.5 trillion invested in each other’s economies and over 2.5 million jobs created across both countries,” a U.K. government spokesperson said.

“We are committed to further strengthening this relationship, and as the only two allied countries with trillion-dollar technology eco-systems, driving greater collaboration between our tech sectors will unlock new economic growth as part of our Plan for Change, making them the most efficient and ambitious in the world.”

Dan Bloom and Graham Lanktree contributed to this report.