Trump, who is a protectionist, has said that he plans on introducing a 20% levy on most imports to the US in order to help out domestic businesses, with 60% on imports from China.
After President-elect Trump made clear his intentions to engage in a trade war and impose tariffs on all imports, which would harm the UK economy, a former world trade expert has warned that the UK must now choose between the EU and the U.S. if it is to grow its economy.
Trump, who is a protectionist, has said that he plans on introducing a 20% levy on most imports to the US in order to help out domestic businesses, with 60% on imports from China.
According to analysis from the Centre for Economics and Business Research, those plans will mean a hit of £20bn to the UK economy, amounting to a reduction in the UK’s economic output by 0.9 per cent by the end of his presidency.
With economic growth a priority for Keir Starmer’s government, some have been pushing him to adopt closer ties with the EU in order to counter balance any economic hit from Trump’s plans.
The former head of the World Trade Organisation (WTO), Pascal Lamy, has said that it is clear that the UK’s interests lay in staying close to the EU on trade, rather than allying with Trump, not least because it does three times more trade with Europe than the US.
His comments came after an adviser to Trump warned that the UK should align itself with the American “free enterprise” economic model instead of the “more socialist” European system.
In an interview with the Observer, Lamy said: “It’s an old question with a new relevance given Brexit and given Trump. In my view the UK is a European country. Its socio- economic model is much closer to the EU social model and not the very hard, brutal version of capitalism of Trump and [Elon] Musk.
“We can expect that Trump plus Musk will go even more in this direction. If Trump departs from supporting Ukraine, I have absolutely no doubt that the UK will remain on the European side.
“In trade matters, you have to look at the numbers. The trade relationship between the UK and Europe is three times larger than between the UK and US.”
Basit Mahmood is editor of Left Foot Forward
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