As Trump throws bricks at UK plc, we need to work out who our friends are
'Events' keep on making life complicated for Britain's beleaguered government.
A case in point: just a day after confirming that disabled people will have to carry the burden of making her sums add up, chancellor Rachel Reeves and the rest of the cabinet have found themselves facing an orange grenade. Donald Trump is imposing 25 per cent tariffs on car imports into the United States.
We need a sense of proportion here. After the EU, the United States is the UK car industry 's largest export market. But, when it comes to from where the US imports most of its motors, our assembly plants lag behind those of Japan, South Korea, Canada, Germany and especially Mexico.
Moreover, the sort of people who can afford to buy some of the UK's luxury marques – think Jaguars, Bentleys, and Aston Martins – are less sensitive to price than those who rely upon more work-a-day vehicles sent up over the border from Baja California, or using parts made in Canada.
But the tariffs will still hurt what remains an important industry for the UK – doubly so in manufacturing, an area that has been struggling. It is the last thing that Reeves and co need, coming on top of the tariffs the UK has already had imposed on its transatlantic steel exports.
Manufacturing matters, even if it is dwarfed by the gigantic service sector. It can and does provide the sort of relatively well-paying jobs Labour would like to see more of. They are certainly preferable to entry-level positions in the service sector. Just ask people living in regions affected by de-industrialisation, where call centres and warehouses have replaced metal-bashers and miners.
The sector's troubles have dragged down the UK's stuttering economic performance at a time when the government is desperately trying to find growth.
The closely watched, forward-looking Purchasing Managers Indices (PMI) produced by S&P Global have been telling a grim story. The flash results for March showed UK manufacturing in a slough of despond, recording a 17-month low of 44.6, where anything above 50 indicates growth. By contrast, the service sector turned in a score of 53.2, which is a seven-month high.
Trump's trade vandalism thus looks like a raised middle finger spray-painted across a map of the UK's struggling manufacturing hubs.
The government's response has, for a change, been cautious and mature. It stands as an all-too-rare example of sensible policymaking in stark contrast to 'desperately throwing stuff against a wall in the hope that something will stick with the public', which was how one insider put it to me.
The attempt to negotiate – and make the point that the UK does not run a chunky trade surplus with the US, according to the perferred US measure (the one the UK uses has it the other way around) – is similarly wise, even as the parties on Labour's left flank (Lib Dems, Greens and the SNP) pout and posture. Retaliating immediately with tariffs of our own would hurt more than help.
However, we can't escape the fact that this does rather make the point that if there ever was a 'special relationship', the thing the UK's vocal and influential corps of Atlanticists have always hung their hats on, it is now dead and buried. Trump has thrown a tin of petrol over its rotting corpse. If the negotiations fail – and is anyone terribly hopeful at this point? – this would be him lobbing a lit match over his right shoulder as he heads off for a round of golf at Mar-a-Lago.
That the UK is in this uncomfortable position only emphasis the profound act of economic and geopolitical self-harm that was Brexit. However vexatious and irksome people find Brussels, before or since, the EU has never done anything like this, has never even contemplated such wanton thuggery. To the contrary. Keir Starmer's election win saw it making overtures of friendship – swiftly and stupidly rebuffed – to the new Labour government by dangling a youth mobility scheme that would allow young Britons to live and work across the continent.
If the UK's attempt to talk its way out of this potential economic jam fails, it might serve as an opportune time to take a step back and consider where its economic interests really lie, how they are best served – and who our friends are.
There is an easy answer, sitting across the Channel. When you're a mid-sized player, there is value to being part of a club, even if, for now, that would mean being a partial, semi-detached member of the gang without access to the treehouse.
Labour needs to wake up and see that a genuine effort to pursue closer ties with Britain's friends would be a smart move, economically and geopolitically, at a time when the world seems to be getting more hostile by the day.
alienating the people who voted for it with wild abandon could really use right now.
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