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Keir Starmer is “walking a tightrope” between the US and EU on trade, experts said after Donald Trump unleashed a global tariff war.
The prime minister insisted it was not a choice of “either or” as he sat down with EU leaders for dinner last night to launch his post-Brexit reset talks.
And leading trade experts told The Independent there are “reasons to be optimistic” that Britain can land good trade deals with both Brussels and Washington.
It came as Trump threatened tariffs against the EU, after announcing plans to impose them on Canada and Mexico.
Members of his inner circle have made it clear tariffs could be imposed on Britain, however there were signs of optimism on Monday as Trump said the UK was “out of line” on trade “but I’m sure that one… I think that one can be worked out.”
It comes as hardliners on both sides of the Brexit debate have called on Sir Keir to “choose a side”.
But at a Nato news conference ahead of his dinner with EU leaders in Brussels, Sir Keir appeared to almost relish the position of being caught in Trump’s emerging global trade standoff.
Asked if he was trying to “have a foot in both camps,” the prime minister said: “In relation to the US and the EU, it’s really important that we work with both, and we don’t see it as ‘either or’ on defense and security. We are working very closely with our European allies every day, particularly in Ukraine, but not only in Ukraine, but equally on defence and security with the US with the special relationship.
“When it comes to trade, equally with a huge amount of trade between the US and the UK, as we have with the EU.”
Markets were in turmoil around the world on Monday over fears of a trade war – but Britain’s markets fared better and the pound gained against the Euro following Trump’s hint on tariffs.
There was also speculation that Trump’s more positive approach to the UK compared to other nations was based partly on a desire not to offend the Royal family. A White House official told The Independent that “the president would never do anything to disrespect the king.” However it became clear officials were unaware King Charles was also head of state in Canada.
Lib Dem leader Sir Ed Davey has called for an emergency Commonwealth summit to support Canada in the wake of Trump’s threats.
But trade experts believe Britain is poised to make the most of the turmoil.
Marco Forgione, director general at The Chartered Institute of Export and International Trade, told The Independent threats of tariffs against Canada, Mexico, Panama and Columbia were “geopolitical” but warned “with the EU there is something much more fundamental going on, Trump does not like them.”
He added: “Because of Northern Ireland we will not completely escape being affected by US tariffs on the EU.”
However, he went on: “The prime minister is walking a tightrope here but there are reasons for optimism, even if there is a very narrow landing strip. I think the prime minister can get a better deal with the EU, there seems to be an appetite for that, and at the same time get one with Trump and the US.”
But he noted: “To avoid US tariffs and to get a deal we will have to play by their rules to a large extent. That will mean de-China-ing our supply chains.”
Sources in both sides of the Atlantic raised concerns that chancellor Rachel Reeves’ trip to China just before Trump’s inauguration sent a negative signal to the new US administration.
Economist Shanker Singham, chairman of the Growth Commission, said: “The UK government is in a position to deftly steer the ship of state between the twin dangers of the US and EU. What Starmer needs to do is ensure that any EU reset does not compromise his independent trade policy and regulatory autonomy.”
But others were pressing for Britain to make a firm choice, with the Lib Dems renewing calls to rejoin the EU customs union.
European Movement vice chair Professor Molly Scott Cato added: “Trump’s aggressive trade policy makes clear that he is an unreliable ally and a threat to global economic prosperity. Starmer has only one option. We need our Prime Minister to be clear that he will not be drawn into Trump’s dangerous trade wars but will seek a genuinely close relationship with the EU instead. “
But in the US there was a warning that choosing the EU over the US would cause Britain long-term harm.
Andrew Hale, trade analyst at the Heritage Foundation which helped draft Trump’s policies in Project 2025, said: “Starmer is foolish to cozy up to the EU at a time when Trump has announced he is preparing tariffs against the EU. He should be staying as far away from any potential tariff targets if he had any sense.
“Starmer’s government has doubled down on the failed economic policies of Jeremy Hunt and the previous Tory prime ministers of punitive taxes, increased borrowing, increased regulations, and a dangerous debt to GDP ratio. The UK economy is on the verge of collapse already, and US tariffs could trigger that. It would not take much.”
And a Trump team insider repeated a warning that Britain could still face tariffs.
“I don’t think the UK has had much attention so far,” the insider said. “Most American politicians view Starmer the same way they viewed Biden – an empty suit with a lot of platitudes; lacking substance. The UK government seems rudderless and unable to handle the most pressing issues of its own time.”
