The threat by Donald Trump to tear up the US-UK trade deal, signed less than a year ago, confirms two things about him.
First, that trade policy and tariffs have nothing much to do with structural imbalances in exports and imports and are more an arm of foreign and defence policy. He is displeased with the British response to his ill-starred war in Iran, so his mind turns towards punishment. As many other nations have discovered, the president can be insulting, capricious and vindictive to anyone, and that clearly includes Britain, fond as he is of King Charles. Mr Trump will reach for any weapon that suits his spiteful purposes, irrespective of whether it might prove counterproductive.
The second lesson, which follows, is that this is a man who cannot be trusted.
It seems an obvious point, given his long and chequered record in business as well as in politics, and indeed in his personal life (which is his own affair). Yet when President Trump signs international agreements, even relatively modest ones such as the UK-US Economic Prosperity Deal and the counterpart Tech Deal, he does so not on his own behalf, powerful though he may be, but on the part of the United States of America. If he subsequently reneges on an agreement or ignores it or rescinds it, it is a matter for him and the American government.
But this happens so frequently and so casually that it makes America riskier to deal with than many of the lesser nations of the world that Mr Trump so often openly disdains. After all, he has practically declared that the US will abandon the most successful defensive alliance in history, Nato, via a social media post, irrespective of Congressional approval, let alone the concerns of long-standing allies.
Again, none of this type of behaviour is exactly a surprise, but it is intensifying. Even in his first term, before he surrounded himself completely with goons and sycophants, he might have conducted some cursory consultations with allies about waging war on Iran. Had he done so this time, he might have developed clear war aims and an end plan, and involved other allies beyond a heavily self-interested Israel.
Now, as has been well noted, there are fewer domestic and constitutional guardrails constraining Trump 2.0, and he is even more contemptuous of allies, international bodies and others, up to and including Pope Leo XIV. He’s even attacked the prime minister of Italy, Giorgia Meloni, an ideological soulmate and one of the very few European leaders he’s ever displayed any affection for.
Some, even those within the Maga movement, say that Trump is unhinged. Things might improve after the Congressional elections in November, but for now, this increasingly uninhibited man is the one the world has to deal with.
It is not good news for Britain, then, even if he decides not to go ahead with his threat to rip up the trade agreement. It can “always be changed”, he says, presumably at a time of Trump’s choosing.
However dark this may appear, the issue must also be placed in perspective. A relatively favourable deal, it was limited in scope, and its concessions aren’t nearly as dramatic as is sometimes assumed. At just 10 per cent, the lower car tariffs compared to other countries were a major win – but the volume of vehicles that can benefit is capped, beyond which more punitive taxes will apply.
One advantageous element of the deal, on steel – an especially sensitive matter for US public opinion – hasn’t been implemented. Even more significantly, the entire Tech Deal was put on hold for months, and work on its fulfilment has only just resumed. Worryingly, an infrastructure partnership with OpenAI, dubbed Stargate, which would include setting up a large data centre in northeast England, has been put on hold because of high energy costs and regulatory concerns. It is a poor augury for the rest of the huge inward investment posited in the Tech Deal.
All of which will surely push the UK further towards its historic trading and investment partners in Europe, as well as newer ones in India, Japan, South Korea, the Gulf and, politics permitting, China. All are demonstrably more reliable and stable partners than the United States under its current leadership, and all, in different ways, carry immense potential.
Of course, a productive and mutually lucrative economic relationship with the United States would be ideal, underpinning strong defence, intelligence and security arrangements. It was one of the great gains that the Leave campaign proclaimed during the EU referendum a decade ago.
Despite Mr Trump’s best efforts, the US, in its 250th year – a youngster when set against ancient Eurasian civilisations – remains a world leader in so many future technologies. It is a financial and entrepreneurial powerhouse. However, it is no longer unrivalled, and it is becoming difficult to do business with Mr Trump in any sense. His infamous self-image as a “very stable genius” is further from the truth than ever.
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