Does Britain Have a 'Trump' Card?


The reaction of most European leaders to the election of Donald Trump as US President has been lukewarm at best. Angela Merkel, Germany’s Chancellor, offered co-operation with the President-elect based on the common “values of democracy, freedom and respect for the law and the dignity of man, independent of origin, skin colour, religion, gender, sexual orientation or political views”, which are hardly certain given Trump’s past comments. Francois Hollande, who openly endorsed Mrs. Clinton, described Trump’s win as opening up a “period of uncertainty” and argued that some positions taken by Trump should be “confronted with the values and interests we share with the United States”.

However, there was a notable exception to this pessimistic mood amongst European leaders. Theresa May congratulated Trump and said that Britain and the US have “an enduring and special relationship”, notably without the conditions imposed by Mrs Merkel. Only a year ago May described Trump’s proposed ban on Muslim immigration as “divisive, unhelpful and wrong”, so it is unlikely her views have changed substantially in this time. However, it is clear that May is taking this stance in the national self-interest.

Many Tory MPs have talked up the possibility of a post-Brexit trade deal as a reason to keep close ties with the United States under President Trump. They have cited Trump’s rejection of Obama’s previous stance that the UK would be “at the back of the queue” for a trade deal with the US if it voted to leave the EU. Trump has also argued against new trade deals encompassing many countries, such as the TPP and TTIP, instead preferring to strike deals with individual countries.

So far May’s attempts to stoke interest abroad in trade deals with the UK have not been successful. During her three day visit to India, her first outside Europe, she had hoped to focus on trade and investment links between the two countries. However, India has barely shown interest in free trade deals, and instead pressed May to allow greater freedom of movement between their countries. Ironically, this is mainly due to May tightening visa rules during her six years as Home Secretary, which has caused the number of Indian students at British universities to plummet from 68,000 to just 12,000. Therefore, the possibility of a UK-US trade deal could be a perfect scenario for Mrs May’s government.

The United States is our single largest export market, making up 14.5% of our total exports in 2015, compared to just 5.9% to France, for example. This means that the economic benefits of a UK-US trade deal could be significant, especially with the UK leaving the EU, which is likely to be detrimental to the economy. The TTIP, a trade and investment deal between the EU and USA, which looks set to be ditched by the US under Trump, had looked likely to boost the UK economy by around £10 billion. Therefore, a UK-US trade deal would be likely to achieve at least this economic boost.

However, there are reasons to be cautious about this prospect. Firstly, everything that Trump said during the campaign trail needs to be taken with, at the very least, a pinch of salt. Many of his remarks will not end up forming the policy platform during his presidency, and it could be that a UK-US trade deal is one of these. The fact that Mrs May was the tenth world leader that Trump called upon his election victory, speaking to the leaders of countries such as Ireland and Australia beforehand, suggests that the “special relationship” is not at the forefront of his mind. There are also claims that Trump’s chief strategist will “run ideas” past Nigel Farage before consulting Theresa May, which does not bode well for building a Thatcher-Reagan style relationship between the two leaders.

This is the main problem with the UK’s situation. A trade deal with the US would be both economically and politically beneficial for May’s government. It would provide an economic boost just as worsening trade conditions with Europe take hold as Britain leaves the EU. Politically, it would be the perfect example of May’s vision of an outward-looking, free trading country, and would be uncontroversial domestically. However, trade with the UK makes up just 3% of the USA’s total trade, so it remains to be seen whether Trump will see this as a priority, especially as he is not the most predictable politician. Overall, May has chosen the right approach by responding well to Trump’s election, which allows the possibility of a UK-US trade deal. However, as with the majority political events this year, whether it actually happens is unpredictable.