Trump tells UK’s Burnham: ‘We can do business’ — but blasts ‘terrible’ Chagos deal

US President Donald Trump said he believes he can “do business” with British Prime Minister Andy Burnham after their first face-to-face meeting at the United Nations, but immediately highlighted a major point of disagreement: Britain’s plan to transfer sovereignty of the Chagos Islands to Mauritius.

Trump called the agreement a “terrible deal” and said the remote Indian Ocean archipelago — particularly the US-UK military base on Diego Garcia — is “very, very strategic”.

The encounter came hours after Trump delivered a combative UN speech in which he threatened to “annihilate” Iran if Tehran does not agree to a peace deal, before striking a more conciliatory tone and saying he believed a settlement could ultimately be reached.

After talks lasting about 40 minutes, Trump described Burnham as a “natural business person” and said the two had already spoken several times by phone.

“I think right now, based on my relationship with the prime minister, Andy, I think that we’re doing very well,” Trump said.

Burnham, who became Britain’s prime minister in July, said the two had built on a “good connection” established during earlier conversations.

The talks covered Iran, Ukraine, trade, the Falkland Islands and the future of Diego Garcia, according to reporting from the meeting.

The dispute centres on the Chagos Islands, a strategically located Indian Ocean archipelago that Britain has controlled for more than two centuries.

Under an agreement reached by Britain and Mauritius in 2025, sovereignty over the islands would pass to Mauritius while Britain would retain a 99-year lease over Diego Garcia, home to a major US-UK military facility.

The implementation of the agreement has been paused amid US opposition.

Trump said he did not support the arrangement.

“I think it’s terrible. It was a terrible deal,” he said, arguing that Diego Garcia is particularly important for US military operations.

The president pointed to the US bombing campaign against Iran, saying American B-2 bombers had to fly from Missouri to strike Iranian nuclear facilities rather than operating from a closer location.

“It’s amazing how strategic it is,” Trump said, adding that he believed Burnham would examine the agreement.

Burnham responded: “Yep.”

The disagreement takes on added significance because Diego Garcia has been central to US military power in the Indian Ocean.

Trump specifically linked the base to the Iran conflict, saying US bombers had to make longer flights because they could not use the facility for the initial strikes.

Britain has said it remains committed to securing the long-term operation of the base.

Before travelling to New York, Burnham said he had spoken with Mauritius Prime Minister Navin Ramgoolam and that London was working towards a "resolution".

The Chagos issue sits at the intersection of British sovereignty, Mauritian territorial claims and US military strategy.