Sir Keir Starmer could 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 subsequent White Home to work collectively on thorny international points, whereas guaranteeing he doesn’t alienate home voters who largely take a dim view of the president-elect.
Whitehall insiders are additionally bracing for character clashes, significantly with Elon Musk, who’s tipped for a distinguished function in Trump’s staff and has revelled in utilizing his social media platform to goad Starmer and criticise the UK.
Tariffs
Economists have warned Trump’s risk 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 may trigger a £22bn annual hit to UK exports, with key sectors resembling fishing and petroleum going through sharp declines.
“Most UK industries . . . will face steep challenges if the US goes forward with the proposed tariffs,” mentioned UKTPO economist Nicolò Tamberi, although he added textiles “may even see good points from commerce shifts because of diminished Chinese language competitors within the US market”.
The Nationwide Institute of Financial and Social Analysis mentioned tariffs of 10 per cent would lower forecast GDP development by 0.8 share factors subsequent yr, and trigger a 1.4 share level discount in 2026.
Ahmet Kaya, principal economist at Niesr, mentioned increased costs would hit lower-income households hardest. “Trump’s proposed tariffs can be yet one more shock to the UK financial system,” 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 “finish wars”, a noble ambition that poses issues for a world at the moment enmeshed in a number of conflicts.
The UK’s steadfast assist for Ukraine beneath successive Tory and Labour administrations may very well be severely undermined by the president-elect, who has indicated his want for Kyiv to agree a swift cope with Moscow, triggering anxiousness concerning the prospect of him urgent Ukraine to simply accept phrases.
Whereas Starmer has promised the UK will increase 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 may present plug the navy and monetary hole if the US, which has offered a serious proportion, pulls again.
Trump’s place may 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 may have over Israeli Prime Minister Benjamin Netanyahu.
The UK authorities has more and more stepped up strain on Israel to ease the humanitarian disaster within the area and to indicate restraint in 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 outcomes point out, a minimum of partially, American voters’ repudiation of the Democratic celebration’s insurance policies in Gaza and the failure to barter a ceasefire deal, it’s tough to see how a Trump administration will pivot to enhance the scenario.”
Nato
Trump has beforehand expressed ambivalence about Nato. Any transfer by him that forged doubt on Article 5 — the precept of collective defence that lies at its coronary heart — may pressure 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 could but be pressured to pour much more money into Britain’s armed forces.
Strategic rivalry between the US and China is in the meantime prone to intensify beneath Trump, which may have penalties for London.
Throughout his first time period, Trump pressured Britain to fall into line on Beijing, resembling banning know-how manufactured by Chinese language firm Huawei from the UK’s 5G rollout.
Know-how
Governments world wide are drawing up guidelines to control how AI is developed and used, making the subsequent 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 intently 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 fairly important” for the UK’s function in tech, they added.
Massive Tech firms are prone to be emboldened by Trump to battle towards European-style regulation of the business, 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 business 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 vitality.
Labour ministers are privately aghast at Trump’s strategy to local weather change however some consider that Europe may develop into a comparatively extra enticing place for low-carbon funding within the coming months.
The Starmer authorities will pitch Britain as one of the crucial politically secure international locations on the earth with a extra interventionist strategy to inexperienced vitality than the earlier Tory administration.
Trump’s victory may 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 resembling French President Emmanuel Macron and EU president Ursula von der Leyen had already dropped out even earlier than the US election.
