The re-election of a former president could potentially lead to the revival of negotiations for a post-Brexit free trade agreement (FTA) between the United Kingdom and the United States, according to Whitehall sources. It is believed that the UK government has pinned its hopes on Donald Trump for a trade deal after current US President Joe Biden scrapped early stage talks. The chance of an FTA under the Biden administration is now considered to be “zero” due to the president's protectionist policies and pressure from the Left of the Democratic Party in Congress.

The scrapped talks included an “interim” or “foundational” agreement that would have laid the groundwork for a full trade deal, but Senate Democrats argued that such an agreement would undermine protections for American workers. Biden's focus on rebuilding US manufacturing in key industries, such as green energy and computer chip production, has also halted trade talks with other countries.

However, if Trump is re-elected in the next US election, there is a possibility that talks over a full trade deal could be revived. Trump had previously expressed support for a trade deal with the UK, describing it as "very substantial" and likely to significantly increase current trade levels. Although talks were initially halted due to concerns about the Brexit deal reached between the UK and the EU, a non-Biden White House might be more amenable to a trade deal with the UK.

For Conservative ministers, striking a major trade deal with the US has become a point of principle, particularly after Barack Obama warned in 2016 that Britain would be at the "back of the queue" for a deal if it left the EU. The US is the UK's largest trading partner, accounting for 17% of all exports in the year to June 2021. However, negotiations have faced major obstacles, including disagreements over issues such as the export of chlorine-washed chicken from US farmers to the UK.

If negotiations with the US are not revived under a Trump administration, the responsibility for trade talks could fall to the Labour Party in the UK. However, Labour's approach to US trade relations would likely involve pursuing smaller agreements in specific areas to avoid disputes over contentious issues like agricultural products. These sector-specific deals could include agreements on critical minerals for electric car batteries, the pharmaceutical industry, AI, and quantum computing. Labour officials believe that this approach would avoid lengthy delays and increase Western independence from China.

The UK's hopes for a free trade agreement with the US have suffered a setback with Biden's decision not to move forward with a “foundational” agreement that could have paved the way for a full trade deal. The decision came after opposition from Senate Democrats who argued that the agreement did not provide enough protection for American workers. The chance of a trade deal with the US under the Biden administration is now considered to be “zero” by the UK government.

The UK government has been reluctant to compromise on certain issues, such as allowing chlorine-washed chicken from US farmers to be exported to the UK. This has been a major demand of US officials in hopes of increasing agricultural exports to the UK. Biden is also concerned about the impact of any trade deal on his own “Bidenomics” policy, which focuses on protecting American industry from imported goods.

Despite the setback, the UK government has been pursuing trade cooperation with individual states in the absence of a full trade deal with the US. Memorandums of understanding (MOUs) have been signed with several states, including Indiana, North Carolina, South Carolina, Oklahoma, Utah, Washington, and Florida. These MOUs are designed to encourage trade cooperation and cannot bypass federal-level trade barriers.

The UK and US have been expanding cooperation on various economic and trade issues, as outlined in the Atlantic Declaration. This includes measures such as the UK-US data bridge for data transfer between the two countries and a new partnership on nuclear energy. While a full FTA with the US may not be a priority for both countries at the moment, they are focused on ensuring that their economic partnership reflects the current challenges and opportunities.