All the signs are that new UK government is going to make the most important decision of its term in office in the coming weeks. Unfortunately, it looks very much as if it will make the wrong one.
The trade war’s impact on British industry
Now that Donald Trump’s trade policies have escalated into a full-scale international trade war, Britain has to decide how best to respond. The remnants of British industry were hit hard when Trump announced that he would impose hefty new tariffs on steel. Specialist manufacturers in Britain sell significant quantities of steel to the US, and when the impact of that is combined with the risk of other nations dumping unsold stock onto our market, the US tariffs pose a real threat.
Car manufacturers now face an equally serious challenge. Many jobs in towns that have already suffered decades of neglect are now at risk. Bentley, a high-end car manufacturer, is based in Crewe, a town with a long history of vehicle manufacture. Jaguar Land Rover provides a number of jobs in Birmingham and the Black Country. Scunthorpe is hugely dependent on jobs in the steel industry.
So, the temptation for the government is to try to reach a deal with Trump to stop him imposing these tariffs and to protect British jobs. And no doubt many people will breathe a huge sigh of relief if that succeeds. The problem is that a lot of other people’s jobs will be at risk if Britain accepts the demands of Trump’s team as the price of a deal.
The price of a UK-US trade deal
Any new trade agreement with America is going to come with major downsides. One of those is that Britain will be asked to drop its taxes on US tech giants because they have an impact on some of Trump’s richest supporters. This would be directly contrary to the wishes of the vast majority of people in this country and particularly difficult to explain to once-loyal Labour voters.
How could Keir Starmer even begin to justify cutting the winter fuel allowance, reducing disability payments or increasing national insurance contributions if he then gave the likes of Elon Musk a couple of billion in extra revenue? Britain should be raising its taxes on tech giants and on wasteful scams such as Bitcoin, not lowering the few levies it collects on the activities of companies owned by multi-billionaires.
And then there is the food and agriculture situation. Trump is absolutely determined that Britain should allow US agricultural products be sold on our markets without any checks on standards, apart from the few token gestures that remain in place after his administration erodes most of the already weak control mechanisms in the States.
US agricultural standards and British food safety
This means that products from battery-farmed cattle would be on sale here. It means antibiotic-soaked chlorine-washed chickens being sold here. It means heavily sprayed grain and vegetables. It means UK farmers being driven out of business by US farmers unless they adopt the same mass-production methods that see mile-long monoculture fields and thousands of animals kept in giant sheds. Say goodbye to much of British farming, say goodbye to food standards, say goodbye to environmental standards.
Yet that isn’t the worst of it. What really matters is that any deal with the US locks us into a trading relationship with them that rules out the possibility of building a sensible trading relationship with the EU. Allowing products into the UK market that have been manufactured to US standards guarantees that all products entering the EU from the UK will be subject to even greater border controls. Anything else creates a smugglers’ paradise.
If Britain agrees to Trump’s demands, it will be letting in US imports that are produced to terms and conditions that are very different from those agreed within the EU. Our country would be drawn into the orbit of Trump’s US and would no longer have the ability to restrict free trade across our more important European market.
A trade deal with the US: a dangerous long-term gamble
Put simply, Keir Starmer is making a choice about which trading bloc he wants to be part of that will significantly tie the hands of British prime ministers for years to come. It might seem like a tactical move to negotiate with the Trump administration to relax tariffs against the UK and be nice to us in return for a few painful concessions.
But once we sign up we become dependent on them. Separated from our European allies, we are weak and vulnerable to the next set of threats. Does anyone believe that Trump will play nice and honour his promises if the UK agrees to a trade deal extracted under threat of a tariff war? How long before he smells weakness and demands yet another concession? And then another. Where and when will the concessions stop?
Is a deal worth the risk?
It isn’t a wise strategy or statesmanlike behaviour to allow your country to be bullied into accepting the demands of a Trump-led government. It is extremely risky. It may be temporarily painful to stand firm as Canada and the EU are doing but it is the only alternative to submission. Refusing to stand alongside our most trusted allies when they are under economic attack is not a piece of clever realpolitik. It is a decision that is both morally bankrupt and economically foolhardy in the long run.
Before making such a significant decision, we must ask ourselves a few fundamental questions about the future of Britain’s trade relationships. Which trading bloc most closely champions the values and standards that British people want to uphold? Which trading bloc does more business with Britain? Which trading bloc gives those who do business within it a central role in decisions about standards? Which nation is capable of reneging on its agreements at a moment’s notice when the leader changes his mind about whether he still thinks he signed the best deal ever?
Where is the UK’s genuine path to economic prosperity?
Britain’s future lies with the EU, and Britain’s industry and commerce are best protected by free access to the huge markets immediately adjacent to these islands. The time has come for politicians to be honest with the British public. Brexit hasn’t worked. Rather than restoring British sovereignty, it has completely undermined it at a time when it has never been more important to have reliable allies.
In these circumstances, we must stand by our genuine friends in neighbouring countries, not cosy up to utterly untrustworthy ones on the other side of the Atlantic. There has never been a more important time for politicians to be brave enough to tell the electorate the truth. Britain must act quickly and decisively and rejoin the EU – before it is too late and we become helpless participants in Trump’s warped project.
