How Britain got a better trade deal from Trump than the EU

The Brits got their timing right. They cut their deal at the moment Trump was at his most vulnerable.

Here's the timeline:

April 2nd: Trump announces his Liberation Day tariffs. 10% was put on British goods, 20% on EU goods, 24% on Japanese goods. 34% on Chinese goods. An eye-watering 46% on Vietnamese goods.

It took the markets by surprise and both stocks and bonds crashed. The Chinese retaliated really hard, the markets fell even more.

April 9th: Trump capitulates to the markets and partially walks his tariffs back. Everyone apart from China is on 10% for 90 days pending negotiations.

The markets rally but this peters out after a couple of days. That's because the dispute with the Chinese is escalating, and tariffs on Chinese goods reach 145%.

The Chinese then play their Trump Card: they ban the exports of rare earths to the USA.

Meanwhile the press and markets were pressuring Trump's officials to show progress on negotiating permanent deals. The Trump administration pumped out upbeat press releases about "20 great deals" they were working on, but markets were getting impatient.

May 7th: It's coming up to the one-month anniversary of the roll-back. Trump desperately needs a deal to

• show the market sceptics that deals are indeed possible

• he needs a deal that will act as a template for others. Many countries were still under the impression that 0% tariffs could be negotiated. They hadn't grasped that 10% was the baseline.

Lord Peter Mandelson, Britain's ambassador to the USA had grasped the 10% baseline point. He was experienced at negotiation - he had been the EU Trade Commissioner 20 years ago, from an era when the EU was competent and the EU's economy was slightly bigger than the USA's (it's currently 70% of the USA's economy).

So when the Americans phoned the Brits that night proposing a deal got announced the next day, the Brits cheerfully agreed.

The deal involved 10% tariffs across the board with 0% quota carve outs for beef, steel and cars.

At the press conference the next day, Trump almost sounded like the main advocate for Britain, explaining how important it was for Britain to have a steel industry. "They had to nationalise the steel to save it from China," he told the American press. He then explained how it was impossible to move factories for Bentley and Jaguar to the US as they were "hand made" and that's why he was giving them a carve out. Lord Mandelson stood beside him smiling benignly.

Trump even appeared to justify American beef having to meet British standards, saying "Bobby is looking into it". [Looking into raising American meat production standards across the board]. Sensing danger, Howard Lutnick rushed in to say how wonderful American food was.

The markets greeted the deal with relief: now they had a template for other deals.

On May 13th, Trump agreed a truce with the Chinese for 90 days, with both sides reducing tariffs.

With these two deals, the market turmoil had ended and the danger had passed for Trump. From now on he would be negotiating from a position of strength.

The EU was predictably sour about the British deal, briefing that they wouldn't have signed such a "bad" deal and that Britain had capitulated because it was a small vulnerable country.

At this point the EU was confident that they could get zero tariffs in many sectors due to "market pressure".

They didn't grasp that market pressure had pushed Trump to give the Brits zero tariff carve outs, but the British deal had removed any further market pressure on Trump. There have been no carve outs in the deals Trump has done with Japan, Vietnam, Indonesia, the Philippines and the EU.