The British government’s Trump dilemmas

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The re-election of Donald Trump as president of the US marks a new era in US and global politics. Eight years ago, his victory might have been viewed as an anomaly. This time, after all that has happened since — notably the attempt to overturn the outcome of the 2020 election — it represents a decisive choice for the worse by the American people. With probable control over Congress and a supine Supreme Court, Trump bestrides the US. He seeks to reshape much to his own wishes. This time, moreover, he will have an army of loyalists at his side.

For any UK government, this will create huge dilemmas. The one-sided relationship with the US is overwhelmingly the most important security relationship the country possesses. It is also one of the UK’s two most important economic relationships (the other being with the EU). UK governments have believed ever since the second world war that the US would remain the great bulwark of liberal democracy and co-operative multilateralism. Now all this is more than just a little in doubt.

Yet the US is not the only weakening pillar. The year 2016 brought Brexit as well as Trump. If the alliance with the US, cemented in the creation of Nato, became the foundation of British security, so did the decision to join the EU make the new Europe a central part of the UK’s economic destiny.

Just as there is no substitute for the US security alliance, particularly in today’s disturbed environment, so Brexit has proved that the EU remains the UK’s natural partner, by virtue of its size and proximity, especially in trade. Even in 2023, the EU provided 55 per cent of all UK imports of goods and absorbed 47 per cent of its exports of goods. In foreign direct investment, too, the EU and US are dominant UK partners. Moreover, crucially, the UK is a highly trade-dependent economy. While the larger EU members are even more trade-dependent, their most important partner is the rest of the EU. The UK is now an outsider.

What makes all this so much more difficult is that Trump is set on weakening commitments to Nato, and even more on raising barriers to trade. There is talk of 60 per cent tariffs on US imports from China — clearly an act of economic warfare — and 10 to 20 per cent on everyone else. Analysis by the IMF in its World Economic Outlook and by the UK’s National Institute of Economic and Social Research indicates that these tariffs would have significant negative effects on the US and world economies, in both the short and medium term.

So, what, given all these potential threats and the fragile state of its own economy, should the UK seek to do?

It can do nothing to avert the onset of a global trade war. But it could seek to persuade the new administration that, as a close ally and a country with a structural trade deficit as well, it should be exempt. The price might be a further rise in defence spending. But that could be wise, in any case. Would it work? Perhaps not. But Trump would surely enjoy the grovelling.

An opposite option would be to decide that the US pillar has collapsed and seek to make common cause with the EU in resisting the onslaught. That might even, in the extreme, take the form of reconsidering Brexit itself, on the not so ridiculous grounds that the political and economic assumptions on which that decision was based are now utterly out of date.

The difficulties with this idea are at least three-fold. First, it is not at all clear that under current circumstances, not least those in the US, the EU can function successfully. Second, given all their problems, existing and to come, it is unlikely that even a functioning EU would summon the energy to reopen this poisonous debate. Third, for the UK the discussion to revisit Brexit would tear the country apart, again. The sensible course seems to be to let sleeping Brexits lie. But that does not rule out seeking to improve relations with the EU wherever possible.

The wise path now is to recognise the dangers heading towards the UK, try to strengthen the domestic fundamentals and seek to do whatever is possible to preserve what this country perforce has to believe in — open markets, multilateralism and international co-operation, but also the defence of liberal democracy, especially on its home continent. All this will have to be attempted in a far more difficult global context.

The UK cannot oppose the US on its own. If it dares to do so in some vital areas, it must find credible allies in Europe and around the world. But its interests and its values no longer align fully with those of its historic ally. It is a new age. The British government will need to be brave and shrewd in response.

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