US Freezes Trade Talks After Starmer “Lets America Down” Over Chagos

Summary: The US has warned that UK–US trade momentum is stalling, with Treasury Secretary Scott Bessent accusing Sir Keir Starmer of “letting us down” over the Chagos Islands and the future of Diego Garcia. The row lands as key details of the wider trade package remain unresolved and a separate tech deal is already paused.

“Letting us down”: Washington turns the screws on Starmer

At the World Economic Forum in Davos, US Treasury Secretary Scott Bessent sharpened the message to London: Diego Garcia is not a bargaining chip.

“Our partner in the UK is letting us down with the base on Diego Garcia…”

Bessent’s intervention matters because it signals the Trump administration is treating the Chagos handover as a live national security issue, not just a legal tidy-up.

The Telegraph reported the US has signalled UK trade talks are now on hold amid the dispute.

What the Chagos deal actually does

The UK agreed to transfer sovereignty of the Chagos Islands to Mauritius while keeping Diego Garcia under a 99-year lease for the joint UK–US base.

Reuters reports the UK said it would pay Mauritius £101m per year, calculated at about £3.4bn over the lifetime of the deal, to secure the lease.

Starmer’s case is that handing sovereignty to Mauritius is the “only way” to protect continued operation of the base amid international legal pressure. Critics say it is the opposite: a self-inflicted vulnerability, wrapped in diplomatic language.

If you want the strategic basics (without the Whitehall spin), see: Why Chagos matters for UK defence.

Trump piles in and Greenland gets dragged into it

President Trump has already attacked the plan, calling it “an act of GREAT STUPIDITY” and linking it to his broader argument that allies are too relaxed about hard power.

Whatever you think of Trump’s style, the substance is simple: the US wants iron-clad control over strategic basing, and it will use trade leverage to get it.

Trade deal “glitches” and the tech pact already paused

The timing is brutal for Downing Street. The UK and US announced a trade deal last year, but the details are still not finalised.

Meanwhile, Washington paused a separate “tech prosperity deal” in December, citing frustration over UK trade barriers.

The political direction is clear: Labour’s foreign policy pitch was “stability”. Instead, Britain is now juggling a security row with its closest ally while trade deliverables drift.

Why this is a problem for Britain

Brexit Britain needs flexible deals, strong defence credibility, and a reputation for protecting strategic assets. Picking a fight with Washington over a base that underpins US–UK power projection is the worst kind of unforced error.

Reform UK and Conservative critics will argue this proves Labour’s instincts are internationalist process-first, security-second. Labour will insist the base is protected. The US response suggests they are not buying it.