Can Starmer trust Trump? Carl Court/ Pool/Getty Images
Nearly a fortnight into Donald Trump’s tariff war, Europe’s leaders are already taking sides. Italian Prime Minister Giorgia Meloni will pay homage to the American President later this week, while Spanish Prime Minister Pedro Sánchez dropped in on China’s President Xi Jinping on Friday. At this rate, the feuding superpowers could carve up the Continent.
Even before the tariff tiff, Europeans were at risk of a geopolitical squeeze between the US and China. In trade, this is now happening. Despite Trump’s U-turn last week, we are still in a worst-case economic scenario. American tariffs on Chinese imports are now 145% — a level at which nations stop trading, even if Trump has since made an exemption for electronic goods and components. In all this, Europe emerges as the loser: it is far more exposed to trade shocks than America because it relies more on foreign trade.
How, then, can Europeans protect their interests? My advice is first and foremost not to get distracted by military matters. What is the greater threat to Europe — the US abandoning multilateral free trade, or a Russian invasion of Northern Europe in the mid-2030s? In the short term, it’s the former. While Russia has strong defence capabilities, it will not have the resources to fight another big war for at least 10 years. Europe will need to get its military in shape before then, but this is a medium-to-long-term job. By contrast, the split in the transatlantic alliance and the assault on the international trading system is taking place right now. It’s the threat we should be most focused on today.
An adequate response to this threat would require deeper co-operation between the EU and the UK. But this means not getting sidetracked by another Brexit debate. When the European Commission announced it would open talks with the UK on defence co-operation, France immediately suggested that this would be a good moment to re-open the EU-UK talks about fish. Never underestimate the level of pettiness in European politics.
The most immediate joint action I would recommend is a co-ordinated macroeconomic policy response in the form of a fiscal stimulus for consumption and investment. Perhaps Canada could be roped in, or even China. Now is a great moment to do this because it would protect Europe and the UK from a sharp recession — plus, it wouldn’t cost very much. The infamous bond vigilantes are currently busy fighting Trump — and they can’t fight on two fronts at once. Last week, the US bond market came close to seizing up, as people lost confidence in the future role of the dollar as a global reserve currency. If you move your money out of the US, you have to move it somewhere. This is why the euro is rising against the dollar.
Economic stimulus would not only mitigate the economic downturn in Europe, it would also help to rebalance the global economy. The problem of global imbalances is not really about trade, as Trump erroneously insists. It’s about the US saving too little, and the rest of the world, especially China and the EU, saving too much. The difference between what a country saves and what it invests is approximately the same as the difference between what it exports and what it imports. It is the financial side of this equation that drives the product side, and not the other way round.
If the EU, the UK, Canada, and perhaps even China came together to agree on a joint stimulus, it would be a win-win for everyone. If the Trump administration is genuinely keen to solve the problem of global imbalances, as members of Trump’s team suggest, then they should welcome such an antidote.
My next suggestion will probably go down less well with the Americans. The EU and UK should begin to replace a traditional diplomacy centred around relationships with a diplomacy that prioritises the national, or European, interest. After all, Trump’s tariffs do not benefit Europe: not a single European country can align with Trump on this issue and emerge victorious.
If the US and China decide to fight it out, Europe would be wise not to take sides. Keir Starmer, the UK prime minister, has so far refrained from doing so: “We shouldn’t jump in with both feet to retaliate”, he told the Liaison Committee of the House of Commons. This is exactly the right thing to do. And Europe should follow his lead by staying neutral. After all, Trump is not our friend. He could not care less who wins the Russia-Ukraine war, in which he casts himself as a neutral arbiter. He does not play on our team.
Europe should see the US and China as strategic competitors, not as enemies. For the EU, now would be a prime moment to revisit the EU-China investment agreement. Angela Merkel and Emmanuel Macron negotiated the deal with President Xi in 2020, but the European Parliament shelved it a year later, after China banned a few MEPs from visiting. The relationship became frosty, though it has been thawing lately. When Rachel Reeves, the UK chancellor, visited China recently, she came out in favour of greater co-operation. It would be easier to co-operate, however, if the EU, the UK, and Canada acted together. If only we weren’t so afraid of provoking Trump’s fury.
Of course, any co-operation with China must respect national security interests. It would be wrong for Europe or the UK to rely on China for critical infrastructure — we should not revert to the bad old days when we did not care about security. But co-operation is not the same as dependency. The goal is to make sure that the global trading system can continue to function, with or without America.
The alternative to this would be dire. The US and China could someday stop trading with one another altogether. In such a scenario, China would start selling its unsold goods to Europe at knock-down prices, driving European competitors out of business. The EU and the UK might then respond by imposing tariffs on China. As we saw last week, China would retaliate immediately. The world trading system would suffer a cardiac arrest.
Yet while greater co-operation makes perfect sense for the EU, the UK might be wary of it. The island nation is still holding out for a trade deal with Trump, and hoping that the President will drop the 10% tariff. If this were to happen, the UK would find itself in a very small group of privileged American trading partners. China will clearly not be part of that group. And I doubt the EU will be either, especially if Trump imposes a 20% tariff on the bloc, and it retaliates. Perhaps South Korea, Vietnam, or Japan will make the cut.
But this would mean the world splitting into competing tariff zones, with the EU and the UK on opposite sides of a new global tariff border. And if Trump and Starmer were to agree to a trade deal, Trump would almost certainly insist that the UK mirror US tariff policy. He could not otherwise impose different tariffs on different countries.
Would this make sense for the UK? In 2023, the UK imported £115 billion of goods and services from the US and exported £187 billion. That same year, it imported £466 billion from the EU and exported £356 billion. So the UK imports roughly four times as much from the EU as it does from the US. And it exports twice as much to the EU than it does to the US. The trade numbers with China are smaller, but it all adds up. With this in mind, it would not make sense for the UK to break with the EU and Canada to join Team America.
Naturally, trade numbers are not cast in stone. They would change if the UK were to align with the US. In a world where many services are delivered digitally, and where container shipping is cheap, geography matters less than it used to. And there is at least one scenario in which it would benefit the UK to align with America: if the EU were to retaliate against American tariffs, the UK would be foolish to join in. Post-Brexit Britain cannot afford a tariff war.
The UK and the EU have three options now: align with the US, become more independent, or do nothing and let others decide their fate. My own preference would be the second course of independence. My hunch is that the UK will try to stick with its traditional alliance with the US for as long as possible. I see the EU splintering: Italy, under Meloni, will align with the US. So will Hungary. And so may some eastern European countries that prioritise security over trade. Meanwhile, France will seek greater independence, and Spain will favour a closer alliance with China.
What about Germany? Friedrich Merz, the presumptive next German chancellor, would be more inclined than any of his predecessors to seek a closer alliance with the UK. He did not agree with the EU’s negotiating position on Brexit. What the Germans and the British have in common is that they are instinctive free traders. If there is any hope for Europe to lead a world of free-trading nations, Germany and Britain would need to be at the forefront.
This is, after all, a time for action. Either we rise to the occasion now, or else we allow the era of global free trade to slip from our fingers — and with it, all our prosperity.
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SubscribeClaudia Webbe was found guilty of harassment on evidence that included her threatening a woman with an acid attack. Yet she remains an MP. She is clearly not someone who can offer to mediate between warring groups (even if you disregard how she became the Labour candidate).
This violence is the triumph of identity politics.
Looks like people get what they vote for.
Webbe’s Conservative opponent in 2019 had a distinctly Indian sounding name, but lost. Before that, they kept returning the extremely suspect Keith Vaz.
I see that Webbe’s sentence was reduced on appeal, so a recall is not possible. For all Johnson’s faults, he didn’t pursue a campaign of harassment and threats. Yet, we’re still hearing about cake this, party that, while Webbe is broadly allowed to carry on. See also the COVID Margaret fiasco in Scotland.
This obsession with multi-culturalism is a phenomenon of the liberal woking-class elites of the western democracies. Most cultures outside of this political geography display a marked preference for being with their own kind. They perpetuate their own religious, social, ethnic and community interests without much if any interest in subsuming themselves within a wider cultural context. One won’t encounter preoccupation with multi-culturalism and inclusivity in, for example, China, Burundi, Afghanistan or Japan, except for their cultural appropriation of western technology.
‘This obsession with multi-culturalism is a phenomenon of the liberal woking-class elites of the western democracies. Most cultures outside of this political geography display a marked preference for being with their own kind’.
Such inclinations are not only drawn across ethnic or even national divisions, indeed I think value systems are of greater influence.
You will find that the liberal ‘woking-class’ elites have as great a preference for their ‘own kind’ – and a commensurate hatred of others – as any that may be manifest elsewhere.
Mrs Webbe a case in point
Interesting as to how our Orwellian, woke ruled media avoided mentioning that this was a Hindu v Muslim issue… Can one imagine reporting conflict from Ulster avoiding the Catholic v Protestant issue?
Am I not correct in understanding that India has barred all Muslim immigration a year or so ago?
Do most people actually know why India was divided post independence?… No, most people in Britain do not even know the difference between Indians, and Pakistanis and Bangladeshis.
The fact is, again that the media and politicians avoid is that the Indians are far more successful in every area of life than the muslims in Britain, and for that matter than the rest of us, and like the Jews, keep quiet about it.
The Woke narrative in defiance of historical facts is that the partition of India and Pakistan with its consequent violence was forced upon Hindus and Muslims alike.
‘..was forced upon…’ – we’ll, they hardly had a vote, did they? I’d say it’s a fairly good phrase, and not really in defiance of fact. But it’s a fair bit more complex than that.
Exactly – complicated. It was forced upon the people of India by their leaders, not the Raj but Nehru and Jinnah, particularly the latter.
‘India’ historically referred to a landmass like Africa or Europe, not a country or a nation. The ‘Indian’ identity was created in the latter half of British rule. Before the Raj South Asians had no notion of belonging to a single community.
You are wrong when saying India has barred Muslim immigration. The law passed in 2019 only fast-tracked citizenship from countries that were part of (undivided) India and were facing religious persecution. Being successful is not a crime.
‘Undivided India’ is nothing but a fiction. What you really mean is the British Indian Empire and Afghanistan was never a part of it but Afghans get fast-tracked citizenship from India.
Spot on, thanks to MSM most of the ‘demos’ haven’t a clue about India. As for State Education, to which 93% of children are subjected, even worse.
Immigrants will bring their culture with them. Who expected otherwise?
Is this what is happening in Sweden?
…as yet, nothing like as bad…Sweden currently “enjoys” pretty much the highest murder rate in Europe, with many attacks carried out by grenade…and practically all the perpetrators drawn from those either not born in Sweden, or with parents not born there. Although I think the root cause in Sweden is crime, not sectarian ideology…
Isn’t multi-culturalism wonderful…
No, they bring barbarism with them.
How else could it be otherwise?
Diversity is not a strength. Screaming it on every newspaper and from every government bureau for decades does not make it so.
Countries can handle a lot of diversity regarding means (“how do we achieve the common good?”, “how do we balance competing goals?”) but significant deviations on ends (“what is good?”) are fatal.
Turns out secular liberalism isn’t a strong enough glue to compete with religion and ethnic tribal loyalties.
It really is quite extraordinary. Europe fought wars for hundreds of years to draw borders that would allow enough ethnic homogeneity to make governance possible.
And then with just 20-30 years of peace they thought, “let’s just recreate all the ethnic divisions that we just resolved through centuries of war.”
They use words like “balkanise” as though they have no understanding of what happened in the Balkans.
Nigeria, India and most of the world are trying to get to a point of homogeneity where practical governance is possible and, Europe, having largely solved this problem, recreates it of its volition.
The incompetence, olympic stupidity and ideological blindness of this suicide mission is horrifying.
And the tory’s have a lot to answer for. Net migration this last year was 500 000. They are too incompetent to see the problem of ethnic incompatability, much less address it, and their continued existence as a party may be drawing to an end as these predictable and predicted problems increasingly come to a head.
The British conquest of India was one of the strangest things in world history. In the 17th century the two were at technological parity. British innovations like steam trains, steam ships, breech-loading guns and the telegraph lay ahead in the 19th century.
The British crown was usually penniless while the Mughals were a byword for wealth. There was a huge disparity in size and population, both in India’s favour.
No-one would have bet on the Brits.
India was extremely diverse; different races, languages and religions. Not only were there Hindus, Muslims, Sikhs, Jains, Buddhists and Zoroastrians, but the Hindu majority were further divided by caste.
Is it possible that the exemplary diversity of Indians made it possible for the British, few in number, penurious, technically not advanced, to exploit them?
Very good question. But surely even the lo-tech gun-power the British had was a big advantage at the time? And tactical superiority was valuable, too.
No, the Mughal empire had matchlock muskets and muzzle loading cannons, just like us.
And they had elephants!
At the battle of Plassey, 1757, Siraj-ud-Daulah’s army with about 50,000 soldiers, 40 cannons and 10 war elephants was defeated by 3,000 soldiers of Col. Robert Clive. The British had six field guns and two howitzers.
How then was the British victory at Plassey possible and how were we able to conquer India? This is not a rhetorical question. I would like to know.
I believe that victory was assured when Mir Jafar, the Nawab of somewhere that I can’t remember, defected to the British; importantly he was the senior commander of the British opponent.
Jafar Ali Khan. Clive promised to make him Nawab of Bengal.
https://en.wikipedia.org/wiki/Battle_of_Plassey
…up to a point, although we were more advanced in ship-building, gun-founding…and both military and civilian administration. Essentially we went to trade, got a concession to create a base for that purpose…and ran it so well that we got more and more drawn in to local matters…often invited to do so by Rulers seeking our support against their enemies, or looking for greater efficency in matters like tax collection…
That’s pretty much what I said. Extreme diversity made them eminently divisible.
Yet India was conquered by two Moslem Empires long before the British got there, and apart from the rulers was a very poor sub continent. The Moslem Empires were won by military might, and destroyed much of Hindu culture.
But Hindu culture was never destroyed either in the centuries of the Delhi sultanate or during the rule of the Mughals. Indeed conservative Muslim scholars feared during the reign of Akbar and his two successors that Islam might be dissolved in India. And it was for more than a century until the accession of Aurangzeb that strict Islamists fought a defensive action against elements they thought assimilationist – notably the Chistiya sufis. The long march of what became the Deobandis then the Taliban started in opposition to Akbar’s syncretism in the 1580s. Though the force of Muslim arms and rule overwhelmed many of the lands they conquered, in India they failed to subdue people they regarded contemptuously as worshipers of idols and animals.
The only silver lining being that the children of Leicester will be a bit safer while the Muslims are distracted.
Seems to me there has been a fatal ignoring of the requirement to ensure integration; or rather there has been a, not unsuccessful, intimidating of the ‘native’ population of these isles into accepting undigested immigrant communities. Of course, the overwhelming majority of immigrants just want to get on, and good luck to them, but for those who can’t, they fall back into their own community, and here they are prey to so-called ‘community leaders’ for whom identity politics offer a route to power.
It happened with the Irish, in their successive immigration waves, and is happening now with South Asian communities. I do know whereof I speak for those interested: my Mother was Irish, and my Father’s family is too (two generations further back); my father-in-law is also from Pakistan. In all three instances, successfully integrating immigrants got on; those that didn’t invariably fell back into the hands of ‘their communities’.
Integration is hard work though: much easier to hope it just sort of happens but it rarely does and second generation immigrants can be particularly vulnerable.
Totally agree, but this recent violence in Leicester was caused by students and other recent arrivals from India pumped up with hardline Hindu nationalist ideology. The Gujarati Hindu and Gujarat Muslim communities of Leicester are both peaceful and law abiding.
Fake narrative. Read this:
Did misinformation fan the flames in Leicester? https://www.bbc.co.uk/news/blogs-trending-63009009
So the Hindus shout things but the Muslims have vandalised and destroyed Hibdu property. Its not exactly like for like.
In India, Islamists hurt and bully Hindus all day long, both inside and from Pakistan next-door. It’s a common thing, both in that region of the world and elsewhere.
Something something foaming in the Tiber.
“recent events in Leicester show what can happen if interfaith relations are neglected by political and social institutions who should….” – Wo, wo, WO, stop right there. Let’s not blame the inclusive, respectful host culture for the violent sins which some religions consistently import to whatever nations host them –
Every. Single. Time.
We need a Lieutenant Colonel Colin Mitchel here. He ‘sorted out’ Crater in short order.