Negotiations on a technology deal between the UK and the US have stalled due to hurdles in wider trade negotiations between the two sides.
In the Technological Prosperity Agreement, which was billed as “historic” when it was unveiled during US President Donald Trump’s state visit in September, both countries committed to cooperating in areas such as artificial intelligence.
However, talks on the deal are now on hold due to US concerns over what it sees as broader trade barriers from the UK.
A government spokesperson said: “Our special relationship with the United States remains strong and the UK is firmly committed to ensuring the Tech Prosperity Deal delivers opportunities for working people in both countries.”
The New York Times, which first reported the story, said there were “broader disagreements” between the two sides, including over digital regulations and food safety rules.
The UK government did not comment on these specific claims. The White House did not respond to the BBC’s request for comment.
When the deal was announced, the government wanted to highlight the benefits it said it would bring.
“This tech prosperity deal marks a generational shift in our relationship with the United States, shaping the future for millions of people on both sides of the Atlantic,” Prime Minister Sir Keir Starmer said in a statement.
Technology Secretary Liz Kendall said the partnership would “transform lives in Britain” and was a “vote of confidence in Britain’s burgeoning AI sector”.
At the same time as the deal was revealed, a number of US technology companies announced a flurry of investments in the UK.
Tech giants including Microsoft, Nvidia and Google set out a total of £31bn in planned spending.
Those investment plans are not believed to be affected.
Google, Microsoft and Nvidia have also been contacted for comment, but the companies have not yet responded to the BBC.
Nvidia boss Jensen Huang said in September that his company’s investment in the UK reflected its belief it could become an “AI superpower”, an ambition championed by Sir Keir’s government.
He said the investment announced by technology companies alongside the Tech Prosperity Deal would be used to expand AI infrastructure, such as data centres, across the UK.
The technology pact was documented in a Memorandum of Understanding (MOU) that said both countries would seek to collaborate on artificial intelligence, quantum computing and nuclear energy.
He said this could include working together to build “powerful quantum machines”, supporting innovation in artificial intelligence hardware and exploring potential new ways to use advanced nuclear energy.
But the Memorandum of Understanding also states that any proposal is non-binding and will only “come into force when substantial progress is made to formalize and implement” the broader US-UK Economic Prosperity Agreement, signed in May.
The Trump administration has sought to rewrite global rules on trade, imposing tariffs on many countries – including traditional allies like the United Kingdom – and seeking new deals that it claims are fairer for the United States.
For the UK, that has meant haggling over various sectors of the economy, a process that has led to deals on cars and, more recently, pharmaceuticals.
However, the BBC understands that a proposed deal to remove tariffs on UK steel exports to the US has been put on hold indefinitely.
Allie Renison, director of communications firm SEC Newgate UK and former government trade adviser, said the current technology impasse reflects the US and UK’s “slightly fragmented approach” to signing trade deals.
“Instead of doing everything at once, different areas are being tied to different parties,” he told the BBC, pointing out how concerns about separate business areas may now be affecting technology deals.
While questions remain about what the potential hurdles could mean for promised investments by US tech companies in the UK, Renison added, they are unlikely to amount to much more than “a bit of posturing in the wider negotiations”.
