Brexiter gloating the other week about Donald Trump hitting the EU with heavier tariffs than those on the UK was both absurd and short-lived.
Absurd because any relative tariff relief for the UK economy would be massively outweighed by the damage from Brexit, which most economists agree is costing us between 3% and 5% of GDP.
Short-lived because Trump changed his mind with a week. He cut the main tariff rate for EU exports to the US from 20% to 10%, the same as for UK goods.
But pro-Europeans in the EU and the UK should not be tempted to take our turn to gloat. Because that is not the point here.
The point is that neither the EU, the UK nor any other democracy can currently rely on the US in the way we have been used to doing.
So we need to get closer together and rely on each other.
We are seeing coalitions of the willing in support of Ukraine and to boost European defence, bringing the UK together with the EU institutions, EU Member States and others. What previously seemed like red lines – for example barriers to major spending on defence from the EU budget, or Germany’s inflexible fiscal rules – are falling away.
The UK now needs in turn to reconsider red lines on trade and the economy, to head off the economic risks presented by a capricious US President.
Trump erecting trade barriers in the Atlantic makes it even more urgent to demolish trade barriers in the Channel and at Irish borders.
So we need a ‘reset of the reset’ with the EU, a new level of ambition. That is essential to get the growth the UK needs to prevent living standards falling, to pay for defence spending and to renew our creaking infrastructure.
The government should at the 19 May UK-EU summit commit to aligning UK standards with EU ones – not just for food but for most products – so as to reduce red tape and better protect consumers. We should sign a youth mobility deal with the EU. And coordinate our carbon border with the EU’s, to halt unfair competition from imports made in places where environmental rules are lax.
In the medium-term we need a clear-eyed look at how best to re-integrate the UK fully into the border-free EU market. Ultimately, we need to get our place back around the EU table when the big decisions are being made.
Trump’s tariffs, whether 10%, 20% (as they still are on steel and aluminium from the EU and UK) or at far higher rates for Chinese products, are for the US like Brexit was for the UK – economic self-harm driven by ideology and delusion.
We are faced with an unpredictable American President who has abandoned allies, elevated arbitrary trade barriers and spooked markets.
Like Brexit, Trump’s trade war has also brought harm and uncertainty to friendly countries. But on a massively greater scale. And he has not ended it – only paused it. There is more to come.
When the US is unstable, the global economy is highly vulnerable, as we have seen with recent volatility in stock and bond markets.
No-one can escape the global turbulence. But the bigger and more diverse an economy, the bigger its domestic market and the greater its trade clout, the more chance of weathering the storm.
This is why the EU – with its massive cross-border single market - has had the confidence to set out measures to retaliate to Trump’s trade aggression. It has – rightly – now paused those measures, but made clear it will reinstate and expand them if necessary.
Brexit Britain is on its own. For us, the harm done by Trump comes on top of the harm we did ourselves with Brexit.
Brexiters like to talk about ‘control’. Well, we cannot control Trump. But we can control how we respond to him. And the best way to do that is to put our relationship with our European neighbours first.
Mark English, Policy and Media Adviser to EM UK (personal views)
SHARE THIS: