Discussing Trade & Tariffs on France 24

For decades, Donald Trump has held firm to his view that the United States has routinely been ripped off by international allies as well as its more obvious competitors. Newly returned to power, but with a window of opportunity that narrows every day, he and his economic team have moved swiftly to impose tariffs and exert pressure on foreign governments. In Brussels this week, the UK government refused to sign a Joint Statement on Artificial Intelligence. This might not have appeared out of the ordinary had the Conservative Party had still been in Downing Street, but with the current Labour government seeking to curry favour with the EU, this was somewhat unexpected. However, the British Prime Minister, Sir Kier Starmer, is not the first, nor will he be the last British Prime Minister to find himself in a pincer movement, caught between Washington and Brussels. Where he chooses to place his ultimate allegiance will be of great significance for himself, his administration, and the future direction of US-UK relations.

Any Labour administration would be far more comfortable dealing with their colleagues across the English Channel, and this is no exception. The challenge it faces, however, is formidable following the vote to leave the European Union. If Starmer gets too comfortable with Brussels, he risks a backlash from the British electorate in any future elections. He must also appreciate the significance of trade, defense, and the historical alliances with the United States and does not want to alienate the White House.

The prime minister seems intent on keeping his head down, attempting to take the easy way out, hoping, perhaps, that if he keeps quiet then maybe nobody will notice that he isn’t doing or saying anything of note. However, his timidity has not gone unnoticed, and at some point, he will need to make his stance. At this point, he is trying to have the best of both worlds and could end up with the worst of all possibilities.

The Trump administration clearly view Downing Street as being led and populated by politicians who have been vocal in their attacks on Donald Trump over the past several years, and as being as far out of step with their own agenda as possible. It is notable that Sir Keir Starmer has not been invited to the White House and has not been the first foreign leader to visit the new president as has so often been the case with other British prime ministers.

Donald Trump does not need to push the UK back towards closer relations with Brussels, since the current administration in Downing Street would quite happily rejoin the European Union if it could, indeed, it has gone out of its way to play nice with the EU. It can, however, only go so far because of the declared wishes of the British electorate. However, many people who voted for Brexit will be fearful of what Starmer and his government are doing, as they continue to chip away at safeguards and red line agreements. Many people in the UK will be fearful of this, leading to even greater support for the Reform Party and Nigel Farage. This is already being borne out in polling that show Reform to be ahead of an increasingly unpopular Labour administration.

At the heart of current tensions are trade and tariffs. Free trade negotiations have been going on for years. People have been talking about a transatlantic free trade agreement since John Major was PM, and we still do not have one in place. There was lots of talk about an alliance between the United Kingdom and the United States after Brexit, which has not come about, neither is there one in place with the European Union. There is a great deal of discussion about the apparent tension between Washington and European capitals since Trump returned to office, but when Joe Biden was president, he made it clear that he had no interest in prioritizing a trade relationship with London, which set back trade talks substantially. It will, therefore, be interesting to see what transpires under the Trump administration, which is using the threat of tariffs as a trade negotiation tactic to get the best deals possible for American citizens and businesses, which is his responsibility and priority as the American president.

This is not merely a trans-Atlantic issue, but one that is impacting relations with the neighbour to the north. Donald Trump is engaging in an extreme form of coercive diplomacy, in large part to stem the flow of fentanyl and illegal immigrants across the northern border. There has rightfully been a lot of focus on the problems that the United States faces in regard to these issues from the southern border, but the Trump administration is trying to clamp down on these problems coming in from Canada, whose government they don’t believe are doing enough to help the situation. However, getting into a tariff war with Donald Trump is no way to solve the problem, and will only increase the pressure, both on the government in Canada and in Washington, DC.

With upcoming elections in Canada, Justin Trudeau is a lame duck Prime Minister. The imposition of tariffs, however, appears to have unified the nation. Donald Trump may will be pleased to see the back of this administration, although whether he may end up wishing for the devil he knew, one can only surmise at this point. His actions have certainly served to unify the Canadian populace into a strong anti-American sentiment, that is manifesting itself with moves to buy Canadian products, and to reject American goods and services. This has even led to incidents whereby business meetings that were due to occur in the United States have been cancelled or re-arranged as Canadian business leaders have insisted that meetings occur in Canada. The extent to which this starts to impact American businesses will be particularly telling for an administration which is looking to bolster the American economy and not do anything to hinder it.

These are very early days, but the Trump administration has made it clear that it means business and intends to do all it can to protect and defend American business interests in the face of increased overseas competition, even if that means speaking uncomfortable truths to longstanding international allies.