WASHINGTON (Reuters) - The United States and Britain are negotiating a bilateral trade agreement, U.S. President Donald Trump told a joint news conference with UK Prime Minister Keir Starmer on Thursday, saying such a deal could help avert U.S. tariffs.

"We're going to have a great trade agreement," Trump said. "We're going to end up with a very good trade agreement for both countries, and we're working on that as we speak."

Starmer said the two countries had begun work on a new economic deal, with advanced technology at its core, to strengthen the already strong trading relationship.

Trump said the outlines of a trade agreement between the two allies could be agreed "very shortly," saying his Treasury Secretary Scott Bessent, Vice President JD Vance, Commerce Secretary Howard Lutnick and national security adviser Mike Waltz would lead the efforts.

He said he expected to get a trade deal done "rather quickly, as quickly as it can be done."

Asked if Starmer had convinced him to skip threatened reciprocal tariffs, Trump said, "He tried," lauding Starmer's negotiating skills.

"He was working really hard at lunch," he said. "I think we could very well end up with a real trade deal where the tariffs wouldn't be necessary. We'll see."

British Finance Minister Rachel Reeves said on Wednesday she was confident that U.S.-UK trade and investment would not be derailed by Trump's threat to retaliate against what he sees as barriers to U.S. exports.

"The last time President Trump was in the White House, trade and investment flows between our two countries increased, and I've got every confidence that that can happen again," she told Reuters in an interview on the sidelines of a Group of 20 finance chiefs' meeting in South Africa.

Britain and the U.S. worked on negotiating a free trade agreement during Trump's first term, but did not quite complete that work. When Democratic President Joe Biden took office in 2021, he ended work on that relatively far progressed effort.

Imports and exports of goods and services between Britain and the U.S. totaled $317 billion in 2023, the U.S. Bureau of Economic Analysis says, making Britain the fifth-biggest U.S. trade partner after Canada, Mexico, China and Germany.

The United States is Britain's single biggest national trade partner, although the UK trades far more with the 27 members of the European Union as a bloc.

Trump said earlier this month that he thought something could be "worked out" with Britain on the threat of tariffs while he sounded more committed to imposing tariffs on EU countries.