A senior adviser to incoming president Donald Trump has urged the UK to prioritise trade relations with the US over what he describes as a “socialist” EU.
Speaking to the Times from Trump’s Mar-a-Lago residence in Florida, Conservative writer Stephen Moore said the UK “has to decide” between the two, but said the recent budget from the Labour government indicated it may choose a more Europeann approach to trade.
“I’ve always said that Britain has to decide — do you want to go towards the European socialist model or do you want to go towards the US free market?” he said.
“Lately it seems like they are shifting more in a European model and so if that’s the case I think we’d be less interested in having [a free trade deal].
“I hope they would move towards freedom but that doesn’t seem to be the case given the budget that they just came out with in London.”
Moore has backed Trump since 2016 and was nominated in 2019 by the then-president to serve as governor of the Federal Reserve. He withdrew his candidacy following bipartisan resistance in the Senate.
Playing chicken
Chancellor Rachel Reeves responded to Moore’s claim in an interview with ITV News, saying the government will “work with president-elect Donald Trump” to “improve trade between our two countries”.
However, she also said that the UK would not lower food standards in the UK – a key obstacle to any hopes of a UK-US free trade agreement (FTA).
“We are not going to allow British farmers to be undercut by different rules and regulations in other countries,” she said.
She also refused to say whether she would follow the EU if it imposes retaliatory tariffs on the US, should the country impose the 20% flat tariff on imports pledged by Trump in the election campaign.
Stuck in the middle with EU
Pascal Lamy, a previous director general of the World Trade Organization, has weighed into the debate, telling the Observer that the UK’s economic model was “much closer to the EU”.
“It’s an old question with a new relevance given Brexit and given Trump,” he said.
“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.”
“In trade matters, you have to look at the numbers,” he added.
“The trade relationship between the UK and Europe is three times larger than between the UK and US.”
Top Trumps
Hopes of closer UK-US trade ties were raised during the previous Trump administration, when then-prime minister Boris Johnson’s UK government was thought to be making progress on talks for a bilateral FTA.
These hopes were quashed when Joe Biden entered the White House, with the Democrat less inclined to pursue bilateral agreements. The UK instead struck a series of state-level deals.
However, the Telegraph reported last week that Trump continues to be “fond of the UK” and that he could exempt the UK from his proposed tariffs.
“Sources close to Mr Trump said the UK could be exempt from the tariffs, under the terms of a deal that Britain hopes to negotiate in the coming months,” according to the paper.
However, it goes on to report that Trump’s administration would demand concessions from the UK on key policy issues, including agricultural standards, and that the current UK government’s plans for closer trade ties with Europe would be affected.