The dangerous gamble of a Trump deal

A bargain on tariffs is full of hidden risks for Britain

Donald Trump has returned as President of the United States after winning last week’s election. With control of at least the Senate and a more ‘Trumpist’ set of advisors and senior staff, he will be less restrained than in his first term. Within his agenda for global disorder is a deep commitment to the idea that trade imbalances are bad and correcting these with tariffs can only be good. Trade wars against friends and foes alike will be high up on Trump’s list of priorities when he takes power at the start of next year. At its most maximalist, it could involve punitive tariffs on a wide range of commonly traded goods.

This will be a problem for Europe, which runs a sizeable trade surplus with the US, exporting more than we import overall. While there is nothing inherently wrong with this situation and nothing comparable to the kinds of unfair trade practices seen in China, Trump believes that if America imports more than it exports then it is ‘losing’ at trade, whereas more exports is a sign of ‘winning’. As a result, Europe simply making some products better than the Americans is seen through the same lens as China using massive public subsidies and ultra cheap labour. This is not a view that can be easily reasoned with through facts and persuasion.

As we don’t know the details of what tariffs will actually be implemented, it’s difficult to assess exactly how damaging this policy would be for Britain. However, the starting point of Trump’s trade policy is severe enough that we can safely assume that both the direct effects (tariffs on UK goods) and the indirect effects (negative hits to our neighbours) present a severe risk for our economy.

As a result, a number of commentators have latched on to a rumour that the UK could secure a special deal on trade by distancing itself from the EU.

What would that distancing involve? We don’t know. What would Trump expect for himself? We don’t know. What would we actually get in return for this deal? We don’t know.

Already we can see grounds for caution when discussing this idea. Absolutely nothing is clear about what such a deal would mean for Britain and whether its terms could be even remotely acceptable to a British government. Many Brexiteers online have already begun pre-emptively endorsing an agreement whose terms are unknown and started to blame Starmer for failing to take advantage of this supposed no-brainer. Cynically, one might think the only part of the proposed deal that interests them is the bit that involves distancing from the EU, turning Trump’s tariff policy into a Trojan Horse for what Brexiteers wanted to do anyway.

Of course, cynical motivations may still be correct for other reasons. But in this instance that seems unlikely.

As already mentioned, there is no certainty over what would ask from us. The idea that his only price would be that we don’t align with EU trade policies seems naïve. After all, Trump is a man who hates free trade. It therefore stretches credulity that he would give us a fair free trade deal.

Currently the UK is one of the few European countries not imposing tariffs on Chinese EVs, would Trump be happy to let that continue? What about sanctions on Russia? If he pushes for a peace deal that includes unfreezing Russian assets, would he demand that the UK go along with that in return for continued special treatment? What if it’s a return to the perennially unpopular issues, like allowing American chlorine-treated chicken or opening up UK healthcare to US pharmaceuticals?

American and UK interests are not so intrinsically aligned, and this will be especially true under Trump. Reluctant as they are to admit it, even a right-wing Brexiteer government would struggle with some of the demands Trump might make.

Another issue is trust. Put simply, Trump is a man who has never knowingly entered into a faithful commitment. He is a serial cheater convicted of multiple counts of fraud. He openly denigrates alliances like NATO and is hostile to rules-based, international organisations like the WTO or the UNFCCC. Even if we imagine that a deal could be done, on a basis that is somewhat acceptable, how can we trust that Trump will actually uphold his end of the bargain?

Based on what we know of his personality and his actions, the most rational and prudent course is to assume that Trump will break any deal at any time he feels it is convenient. This could be as radical as abandoning the whole structure of the agreement or as gradual as changing the terms, suddenly demanding more from us while offering nothing further in return. Trump is a man who thinks fair deals and sticking by the rules are for ‘suckers’. Any agreement we strike with him would leave us utterly at his mercy and any British government would be well advised to think twice before entering such a Faustian pact.

Perhaps most importantly, why should we bend to the demands of a bully anyway? When we have countries just next door who share our values and believe in working together, why should we want closer relations with a partner that intimidates and threatens us? If the threat of tariffs were coming from the EU, those same people urging us to come to an arrangement with Trump would be declaring that the ‘prison guards’ have come to administer ‘punishment beatings’.

It may not even come down to a trade-off between closer relations with the EU and a bargain with Trump, but if the choice is there to be made, there is every reason to believe we are better off seeking unity and solidarity with our neighbours than surrendering to the whims of an American billionaire.