Sir Keir Starmer might have despatched his “hearty” congratulations to Donald Trump on his victory within the US presidential election this week, however there are a selection of coverage areas the place the UK authorities is poised to conflict with the incoming Republican administration.
The prime minister might want to strike a balancing act: sustaining goodwill with the following White Home to work collectively on thorny international points, whereas making certain he doesn’t alienate home voters who largely take a dim view of the president-elect.
Whitehall insiders are additionally bracing for character clashes, notably with Elon Musk, who’s tipped for a distinguished function in Trump’s workforce and has revelled in utilizing his social media platform to goad Starmer and criticise the UK.
Tariffs
Economists have warned Trump’s menace to impose 10-20 per cent tariffs on all imports into the US — and 60 per cent tariffs on Chinese language items — would hit UK commerce and funding.
A sector-by-sector evaluation by the Centre for Inclusive Commerce Coverage at Sussex College forecast Trump tariffs might trigger a £22bn annual hit to UK exports, with key sectors similar to fishing and petroleum dealing with sharp declines.
“Most UK industries . . . will face steep challenges if the US goes ahead with the proposed tariffs,” mentioned UKTPO economist Nicolò Tamberi, although he added textiles “may see gains from trade shifts due to reduced Chinese competition in the US market”.
The Nationwide Institute of Financial and Social Analysis mentioned tariffs of 10 per cent would minimize forecast GDP progress by 0.8 share factors subsequent yr, and trigger a 1.4 share level discount in 2026.
Ahmet Kaya, principal economist at Niesr, mentioned greater costs would hit lower-income households hardest. “Trump’s proposed tariffs would be yet another shock to the UK economy,” he added.
The prospect has despatched shockwaves by way of Whitehall. “This has the potential to be as problematic for us as Brexit,” mentioned one British authorities determine.
Overseas and defence
Trump has pledged to “end wars”, a noble ambition that poses issues for a world at the moment enmeshed in a number of conflicts.
The UK’s steadfast help for Ukraine underneath successive Tory and Labour administrations could possibly be severely undermined by the president-elect, who has indicated his want for Kyiv to agree a swift take care of Moscow, triggering nervousness concerning the prospect of him urgent Ukraine to just accept phrases.
Whereas Starmer has promised the UK will elevate defence spending to 2.5 per cent of GDP — in contrast with 2.3 per cent at the moment — there are questions over whether or not European states might present plug the navy and monetary hole if the US, which has offered a serious proportion, pulls again.
Trump’s place will even have a bearing on Israel’s conflicts with Hamas in Gaza and Hizbollah in Lebanon, though it stays to be seen how a lot leverage he could have over Israeli Prime Minister Benjamin Netanyahu.
The UK authorities has more and more stepped up stress on Israel to ease the humanitarian disaster within the area and to indicate restraint in the direction of Iran to keep away from spiralling battle within the area.
Dr Burcu Ozcelik, senior analysis fellow on the Rusi think-tank, mentioned: “If the election results indicate, at least partially, American voters’ repudiation of the Democratic party’s policies in Gaza and the failure to negotiate a ceasefire deal, it is difficult to see how a Trump administration will pivot to improve the situation.”
Nato
Trump has beforehand expressed ambivalence about Nato. Any transfer by him that solid doubt on Article 5 — the precept of collective defence that lies at its coronary heart — might drive Britain and Europe to shoulder much more of the burden of securing their very own area, above and past present deliberate will increase.
Whereas the prime minister want to focus expenditure on vote-winning areas just like the NHS and schooling, he might but be compelled to pour much more money into Britain’s armed forces.
Strategic rivalry between the US and China is in the meantime prone to intensify underneath Trump, which might have penalties for London.
Throughout his first time period, Trump pressured Britain to fall into line on Beijing, similar to banning know-how manufactured by Chinese language firm Huawei from the UK’s 5G rollout.
Know-how
Governments around the globe are drawing up guidelines to manipulate how AI is developed and used, making the following few years key to the protected rollout of the rapidly-evolving know-how.
Trump has mentioned he plans to scrap the Biden administration’s Government Order on AI — which was tied carefully to the UK’s AI Security Summit final yr.
The transfer would put the US on a collision course with the UK authorities on regulation, one UK-based know-how lobbyist warned. “To me, the downsides are quite significant” for the UK’s function in tech, they added.
Massive Tech corporations are prone to be emboldened by Trump to combat towards European-style regulation of the trade, such because the UK’s On-line Security act and new Digital Markets Unit regulator.
Policing of on-line actions is an space the place Musk, Trump’s prime tech trade ally, has already clashed with the UK. The X proprietor repeatedly likened the UK to the Soviet Union for its policing of offensive speech after far-right riots unfold throughout the nation in August.
Local weather
An avowed local weather change sceptic, Trump promised whereas campaigning to extend drilling for fossil fuels within the US and vowed to repeal the Inflation Discount Act, Joe Biden’s flagship laws to encourage funding in clear power.
Labour ministers are privately aghast at Trump’s strategy to local weather change however some imagine that Europe might turn out to be a comparatively extra engaging place for low-carbon funding within the coming months.
The Starmer authorities will pitch Britain as one of the vital politically steady nations on the earth with a extra interventionist strategy to inexperienced power than the earlier Tory administration.
Trump’s victory will even overshadow the UN COP29 local weather talks in petrostate Azerbaijan subsequent week, given the president-elect’s promise to withdraw from the 2015 Paris settlement — as he did throughout his first time period within the White Home.
Starmer is attending the COP talks in Baku however different main political figures similar to French President Emmanuel Macron and EU president Ursula von der Leyen had already dropped out even earlier than the US election.
