The US and UK have agreed the terms for a trade deal, Sky News understands.
A government source has told Sky’s deputy political editor Sam Coates that initial reports about the agreement in The New York Times are correct.
Coates says he understands a “heads of terms” agreement, essentially a preliminary arrangement, has been agreed which is a “substantive” step towards a full deal.
Three sources familiar with the reported plans had earlier told the New York Times that the US president will announce on Thursday that the UK and US will agree a trade deal.
Shortly after the report emerged the value of the British pound rose by 0.4% against the US dollar.
Mr Trump had earlier teased that he would be announcing a major trade deal in the Oval Office at 10am local time (3pm UK time) on Thursday without specifying which country it had been agreed with.
Writing in a post on his Truth Social platform on Wednesday, he said the news conference announcing the deal would be held with “representatives of a big, and highly respected, country”.
UK and US have agreed trade deal terms, Sky News understands
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He did not offer more details but said the announcement would be the “first of many”.
A White House spokesperson has declined to comment on the New York Times report.
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Senior Trump officials have been engaging in a flurry of meetings with trading partners since the US president announced his “liberation day” tariffs on both the US’ geopolitical rivals and allies on 2 April.
Mr Trump imposed a 10% tariff on most countries including the UK during the announcement, along with higher “reciprocal” tariff rates for many trading partners.
However those reciprocal tariffs were later suspended for 90 days.
Britain was not among the countries hit with the higher reciprocal tariffs because it imports more from the US than it exports there.
However, the UK was still impacted by a 25% tariff on all cars and all steel and aluminium imports to the US.
A UK official said on Tuesday that the two countries had made good progress on a trade deal that would likely include lower tariff quotas on steel and cars.
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Mr Trump said the same day that he and top administration officials would review potential trade deals with other countries over the next two weeks to decide which ones to accept.
Last week he said that he has “potential” trade deals with India, South Korea and Japan.
Asked on Sky News’ Breakfast programme about the UK-EU summit on 19 May and how Mr Starmer would balance relationships with the US and EU, Coates said: “I think it is politically helpful for Keir Starmer to have got the heads of terms, the kind of main points of a US-UK trade deal, nailed down before we see what we have negotiated with the EU — or, more importantly, Donald Trump sees what we have negotiated with the EU.”
Coates said there was “always a danger” that if it happened the other way around, Mr Trump would “take umbrage” at negotiations with the EU and “downgrade, alter or put us further back in the queue” when it came to a UK-US trade deal.
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US and Chinese officials to discuss trade war
It comes as the US and China have been engaged in an escalating trade war since Mr Trump took office in January.
The Trump administration has raised tariffs on Chinese goods to 145% while Beijing has responded with levies of 125% in recent weeks.
US Treasury secretary Scott Bessent and US trade representative Jamieson Greer are set to meet their Chinese counterparts in Switzerland this week to discuss the trade war.
China has made the de-escalation of the tariffs a requirement for trade negotiations, which the meetings are supposed to help establish.
