A possible trade war with the US will not be as bad as feared, a former political appointee in the last Trump administration has said – claiming the president-elect will target the European Union more significantly than Britain as he wants to see a “successful Brexit”.
Peggy Grande, who was a political appointee for Donald Trump, told The Independent he is likely to give a “preferential trade deal to the UK” and she thinks tariffs will “more greatly affect the EU than the UK”.
It comes amid fears of a global trade war, after the Republican politician pledged to impose levies of 10 per cent on all goods imports from US trading partners, and up to 60 per cent and 100 per cent for China and Mexico.
But Ms Grande, who also worked as Ronald Reagan’s executive assistant after he left the White House, said Mr Trump “believes in the special relationship”, adding: “I anticipate that if tariffs are involved, they will more greatly affect the EU than the UK.
“Donald Trump has a great fondness for the UK and wanted to see a fully implemented successful Brexit and wants to help with that still by giving a preferential trade deal to the UK.
“Go back to the US-UK free trade agreement he was working on during his first term – I anticipate he will pick that up right where he left off and lean into it again, especially in alignment with tariffs on China.
“The more our countries can unite to put pressure on China, the more it will benefit us both from a trade perspective. It will require both sides, though. Trump is committed. Will the UK be as well? That remains to be seen.”
But former British ambassador to the US Kim Darroch said he expects Mr Trump to follow through on his threat, possibly putting Rachel Reeves on a collision course with the president-elect.
The chancellor, preparing to push back against the possibility of tariffs, is expected to use a keynote speech this week to promote free and open trade between nations as a cornerstone of UK economic policy.
She is expected to use her first Mansion House speech to set out a post-Budget plan to “go for growth”, as well as make the case that global business connections have supported economies around the world in times of crisis. She will call for continued partnerships with Europe, the Middle East, Asia and the US.
Mr Darroch said he thinks there will be a “stark choice” for Britain, between siding with the EU or sacrificing our agriculture.
Writing about Mr Trump’s remarks on free trade in The Observer, Mr Darroch said: “On tariffs, I expect the exact opposite of a mere threat.
“I think Trump will impose tariffs on all US imports immediately and say, ‘If you want them lifted, offer me something to rebalance trade’.
“The EU will almost certainly retaliate and the UK will face a difficult decision. Do we match EU retaliatory tariffs? Or do we seek a bilateral deal, like a free trade agreement?
“I think an FTA would be on offer from Trump as in 2017: but the top US demand, as was the case then, would be unrestricted access to the UK market for the low-cost products of the US agricultural sector, hormone-treated beef and chlorine-washed chicken included. So the stark choice would be: side with the EU or sacrifice our agriculture.”
There is already growing fury from farmers in the UK over the government’s decision to extend inheritance tax to cover agricultural properties.
But the governor of New Jersey state Phil Murphy suggested his “gut” is telling him the president-elect would not pursue tariffs “against allies like the UK”.
Asked about the issue, the Democrat said: “Do I believe it? I’m not sure. I think if you and I were sitting and speaking about the People’s Republic of China, I’d believe it.”
On Sunday, Treasury minister Darren Jones said Whitehall officials will be “considering lots of different scenarios”, amid growing concerns about the possible impact of tariffs.
Mr Jones said Mr Trump “recognises” the important relationship between the UK and America, adding: “The position of the government is that we support free trade and we support the trading relationship between the United States and the United Kingdom.”
A government source confirmed that officials would “continue” to “take advice” to ensure that Britain was “in the best possible position”.
“We look forward to working closely with President Trump’s team to strengthen UK-US trading relations to support businesses on both sides of the Atlantic,” the source said.
