Handelsblatt Trade War: Consolation Prize for London

Handelsblatt Trade War: Consolation Prize for London Riecke, Torsten • 21 hours • 2 minutes read The British-American trade agreement is no liberation from Trump's trade war. It is nevertheless a glimmer of hope. It is no surprise that US President Donald Trump is concluding his first "truce" with Great Britain in the trade war he instigated. The two countries have traditionally been closely aligned, and British Prime Minister Keir Starmer skillfully flattered Trump's ego with an invitation from King Charles III. This is enough to make survival easier, especially for the British steel and automotive industries, with a mix of import quotas, tariff reductions, and countertrade deals. However, it is not a liberation from Trump's nationalist tariff curse, if only because all imports from Great Britain to America will continue to be subject to a punitive tariff of ten percent. Starmer is also accommodating the US with a series of concessions on the export of industrial goods and agricultural products. However, the handshake with Trump is a far cry from the comprehensive trade and technology agreement sought by London in particular. Politically, the deal is nevertheless a win-win for both sides. The US President can demonstrate that he is willing to correct his misguided campaign against the US's trading partners through negotiations without losing face. For the British Prime Minister, the "soft" diplomacy toward Trump has at least partially paid off. The positive reaction of the financial markets also signals investors' hope that talks can still bring Trump to economic sense and prevent a self-destructive escalation of the global trade war. The EU should therefore not look enviously at the US-UK agreement, but rather see it as an incentive to conclude a deal with the ruler in the White House itself. Especially since Trump, after the massive warnings from the financial markets, suspects that he has gone astray with his tariff round. For the Labour government in London, the meager trade agreement with Trump's America shows once again that Britain's economic future lies in Europe rather than across the Atlantic.<