How can Brexit Britain navigate Trump’s World?

I apologise for the fact that this is going to be a very long post. But events since the previous one have served not just to illustrate the analysis there of a new global divide, but to show this divide to be deepening very rapidly. As numerous detailed commentaries have explained, the Munich security conference and its aftermath have “laid bare the collapse of the transatlantic alliance”, showing that “the American security shield has gone forever” with the result that “it has been without question the darkest week for Europe since the 1940s”. Phillips P. O’Brien, Professor of Strategic Studies at St Andrew’s University, wrote last weekend that “this is arguably the most important week in European history since 1991 or even 1945”. Unlike those dates, what is happening in 2025 carries little in the way of hope, and, with Trump’s announcements and actions becoming more unhinged by the day, any hope there may be is fading very, very fast.

The analysts I’ve just quoted are not excitable catastrophists, but seasoned, respected experts in politics and international relations. I would like to think I share at least some of those qualities, to at least some degree, and, personally, having for nine years been dismayed by what Brexit has done to Britain, I now actually feel frightened by what may happen here. An obvious response to that would be that there are many places, most especially Ukraine, which have far more to fear. That is most certainly true (and it is also true of the US itself where state-induced political intimidation and fear are flourishing, to the horror of decent Americans). Equally, it may be objected that what is happening has little to do with Brexit. However, that is not true.

What’s it got to do with Brexit?

As all those analysts, and many others, make plain, these ongoing developments are not just about ripping up security alliances and global norms, and not just about the empowerment of nationalist ‘strong men’ to carve up the world according to their whims, crucially important as those things are. Rather, as well as what they mean for relations between states, the pronouncements coming from Washington, most recently in Vice-President J.D. Vance’s Munich speech, are proselytizing for far-right and ‘alt-right’ populism within states. Hence Vance’s praise for Brexit and his comments about the German and Romanian elections, which of course come on the heels of Elon Musk’s repeated interventions in British (£) and German politics.

The two aspects are linked. The Trump regime’s loathing for ‘Europe’ is multi-dimensional, seeing it as a parasite in security terms and the ideological homeland of elitism, woke liberalism, and globalism. The EU, specifically, is despised, and resented, as an economic and regulatory power and, perhaps more diffusely, as an exercise in rules-based international cooperation and pooled sovereignty. Indeed, hatred of Europe and of the EU is one of many strands binding together Trump, Putin and the Brexiters.

Since the UK is geographically, historically, economically and, in many respects, ideologically a European country, this necessarily poses profound questions for this country. But Brexit greatly complicates those questions, not simply because it means the UK is detached from the EU, but because Trumpist approval of that makes it quite likely that the US will attempt to exacerbate that detachment at precisely the moment when its folly is most obvious. That might take the form of offering the UK exemptions from new tariffs (about which much is still unclear) or other, including non-material, favours. Far from the present moment being one where, as Keir Starmer seems to think, the UK can once again be a ‘transatlantic bridge’, the reality is that it has the potential to rupture the country, ripping it further from its ideological and geographical allies in Europe but with no prospect of being anything other than the plaything of Trump’s increasingly vicious and unpredictable whims.

However, it is not just a matter of Trump seeking to meddle in Britain’s international relations and internal politics. Nor is it just that, in doing so, he will be joining Putin’s own longstanding attempts to do the same. If it were only that it would be obnoxious and dangerous. What makes it, also, frightening, is that both Trump and Putin have so many willing and powerful accomplices within the British polity*. That means, most obviously, Nigel Farage, the now dominant alt-right and NatCon elements of the Tory Party, the weird ex-RCP coterie and the Tufton Street mafia – both groupings which enjoy disproportionate media influence – and, it is increasingly clear, the ‘Blue Labour’ movement. And they would be neither so numerous nor so powerful had it not been for Brexit.

It was an apposite coincidence that, on the very same day that Starmer went to Paris to meet other European leaders this week to discuss Trump’s Ukraine démarche, the ‘Alliance for Responsible Citizenship’ (ARC) met for a major conference in London. This was a gathering of the assorted world-wide clans of populism and neo-fascism, with British representatives including Kemi Badenoch, Farage, and the ARC Advisory Board member Maurice Glasman of Blue Labour. For want of a better name, the UK contingent can be called ‘Brexitists’ since their bedrock belief is support for Brexit, denial of its failure, and commitment to some or all of its flawed logics.

There are many things at stake in all these unfolding developments, but for the UK, specifically, their immediate manifestation is the question of this country’s relationships with the EU and the US. The Brexitists are quite clear that this is the latest front in their battle, exemplified by Daniel Hannan (who else?) declaring (£) that “we can’t let Labour drag us back into the shrinking orbit of the anti-Trump Eurosphere”. He was right to identify Vance’s Munich speech as making it undeniable that there is a very fundamental choice to be made but, as usual, entirely wrong about what the response should be.

A new proposal for UK-EU relations

Nevertheless, a response will have to be found, and one proposal was made in a report commissioned by Best for Britain (BfB), which was published at the beginning of last week, and which received a lot of media attention (£). It is a timely, important, and serious piece of work, and warrants serious attention, as a constructive proposal to move beyond the current Brexit impasse and to engage with some of the emerging realities of Trump’s new world order.

The report models the economic effects of ‘strong regulatory alignment’ between the UK and EU as regards goods, and also as regards both goods and services, and then models each of these in the scenario of Trump imposing trade tariffs on all goods imported by the US (at an assumed rate of 20% for those from the UK and the EU). Importantly, pursuing strong regulatory alignment in the meaning of the report would not require the Labour government breaching its ‘red lines’ of not rejoining the EU, the single market, or the customs union, and of not agreeing freedom of movement of people. In that sense, it is intended to be a politically viable proposal from a UK perspective.

The ‘headline’ results are quite striking. With strong regulatory alignment in both goods and services, and if there were no Trump-tariffs, UK GDP could be up to 2.2% higher per annum in the long-run than it would otherwise have been, and, even in the event of Trump-tariffs, up to 1.5% higher. This would make a substantial dent in the standard (OBR) estimate of Brexit making UK GDP 4% lower than it otherwise would have been in the long run, and considerably more effective than the more basic ‘reset’, consisting simply of those things the UK and EU have specified they will seek, which John Springford of CER recently estimated to be worth 0.3% to 0.7% of UK GDP. Moreover, both for many individual EU member states and for the EU as a whole the result would be positive or, in the event of Trump-tariffs, would make their impact less negative than it would otherwise have been. So agreeing deep regulatory alignment is presented as a ‘win-win’ for the UK and the EU.

The core concept of the report is that of ‘strong regulatory alignment’:

“Regulatory alignment in goods in this scenario is based on the principle of mutual recognition by the UK and the EU of each other’s regulations. We envision an expansive approach to mutual recognition, in which the UK and the EU take active steps to minimise regulatory divergence and commit to recognising the equivalence of each other’s regulations.” (p.12, followed by a similar definition for services).

This will be very familiar to readers of this blog, and to Brexit-watchers generally, and perhaps will be ringing some alarm bells, because ‘mutual recognition’ has for years been seen by many Brexiters as the silver bullet to reduce the economic costs of Brexit. BfB, of course, are very far from being Brexiters, but whoever proposes it, it has the same problems. I’ve written about these numerous times before, most recently on the last occasion the idea surfaced.

What is ‘Mutual Recognition’?

This is a very complex issue to unpack in full. In broad terms, mutual recognition (MR) means that goods and services which meet the regulations within one market are deemed to meet those which obtain in another, and vice versa. Within that, one crucial distinction is between MR based on ‘equivalence’ and that based on ‘dynamic alignment’ (and/or other forms, such as MR of conformity assessment testing, which I won’t discuss here, though could also become relevant).

Under ‘equivalence’ agreements, the EU and the UK would recognize that, whilst different in some details, their regulations were broadly compatible, and each party would take responsibility of legally enforcing their own regulations. Under ‘dynamic alignment’ (DA) agreements, one party – and in practice it would almost always be the UK – agrees to completely track EU regulations, and as a result the UK’s regulations would be ‘recognized’ by the EU. This is really only ‘mutual recognition’ by courtesy, as the alignment is all one way, even though the ‘recognition’ goes in both directions, and both the source and the enforcement of regulations would ultimately lie with EU law and EU courts.

So, much depends on what form of MR is envisaged, and in that respect the use of the term ‘equivalence’ in the BfB report is either an unfortunate mistake or a problem. We already know that the EU is very reluctant to enter into equivalence agreements with the UK. They aren’t impossible (there are some in relation to aspects of financial services and, in effect, in the EU recognition of the ‘adequacy’ of the UK data protection regime), but as regards Sanitary and Phytosanitary (SPS) regulations an ‘equivalence’ agreement (sometimes called a ‘New Zealand-style’ agreement) has already been proposed by the UK and rejected by the EU. By contrast, a ‘dynamic alignment’ (or ‘Swiss-style’) SPS agreement has been offered by the EU but rejected by the UK.

It isn’t just on SPS regulations that we’ve already been round this loop. MR based on equivalence in a number of areas featured heavily in the UK government’s February 2020 document on its approach to the negotiations undertaken by David Frost, under Boris Johnson, which ultimately led to the TCA. Almost all those proposals foundered, as they were bound to. In large part that was because what makes equivalence appealing to Brexiters (most especially lack of ECJ jurisdiction) is what makes it unacceptable to the EU. As Michel Barnier put it in 2018: “In the absence of a common discipline, in the absence of EU law that can override national law, in the absence of common supervision and a common court, there can be no mutual recognition of standards.”

What about expansive use of Dynamic Alignment?

However, although regulatory equivalence as the basis of expansive MR is a non-starter, what about ‘dynamic alignment’ (DA)? Since the EU does appear to be willing to use that form of MR for SPS regulation, could it perhaps be used expansively? It’s true that this would overcome the problem that lack of ECJ involvement poses for the EU. It also seems to be true that the presence of ECJ involvement is no longer a red line for the UK under the Labour government. Nevertheless, other issues would still remain.

In particular, even under DA each side has to monitor (and/or trust the other side to monitor) that both sets of regulations are aligned. This is a much more complex matter when DA is being used over a wide range of sectors, as envisaged by the report, partly because there is so much more to monitor and partly because there will often be difficulties in knowing where MR applies and where it doesn’t. This arises because crucially, even under the most ‘expansive’ use of DA, but unlike within the single market, the UK would retain the right to diverge in areas not covered by DA.

To take one increasingly important example, assume, as seems extremely likely at the moment, that the UK retains (and perhaps even exercises) the right to diverge in AI regulation. Given the extent to which AI looks set to be imbricated, in some way or another, within so many different business sectors across both goods and services, imagine how difficult it is going to be to determine whether, in relation to any particular product or sector, DA does, or does not, apply. I don’t say that it would be impossible, and certainly the AI example, specifically, is largely uncharted water, but it would involve huge technical complexity, at least if attempted not for one or two areas but at scale.

Indeed the problem isn’t DA agreements as such, it is scaling them up so as to meet the ‘expansive’ MR regime required to yield the headline economic benefits of the BfB report. Ultimately, that isn’t just about technical complexity, it is because the expansive use of DA is effectively an attempt to reproduce selective aspects of the single market but outside of the ‘ecosystem’ of single market agencies and institutions. As such, the more it is used, the more of a threat it would represent to the integrity of the EU single market meaning, at its most generic, the way in which membership confers distinctive advantages over non-membership. That notion, which some Brexiters tend to treat as meaningless or, alternatively, as some kind of EU ‘theological’ dogma, is actually of fundamental importance (hence, amongst other things, many of the issues that have arisen for Northern Ireland).

So (why) would the EU agree to it?

To that, there are several answers. One is that, unlike proposals for equivalence agreements, MR hasn’t been proposed before on a DA basis. Actually, that isn’t quite true, as arguably it was proposed, at least for goods trade, under Theresa May’s 2018 Chequers Proposal for a ‘common rule book’, but as that caused her government to implode it never really got to the point of being negotiated in detail with the EU in the form of a TCA, and would undoubtedly have encountered much resistance from the EU (I’m skipping over a lot of detail on this point). Still, something like it might eventually have been agreed and, anyway, we are now in different times, not least because EU concerns that Brexit might lead to a bigger exodus of members have now largely disappeared. Even so, the EU continues to face the possibility that an expansive DA deal with the UK might set a precedent, with member states seeking to ‘mix and match’ areas for alignment/ divergence.

The more important answer is that we are in different times because the economic situation of the EU, and especially of its largest members, Germany and France, is now much worse than it was in 2018, and the most important answer of all is Donald Trump. Those two things are related, because the state of many EU economies makes the threat of Trump-tariffs all the more dangerous. It is this, clearly, which the BfB report highlights, showing how a strong alignment scenario between the UK and the EU could offset some of the damage of Trump-tariffs, and it is on this basis that it is presented as a win-win proposal.

That may well be true, but, although the context is different, it is still a rather familiar idea, and another one which we used to hear from Brexiters. Their claim from the outset was always that there would be a very expansive post-Brexit deal, even to the extent of offering “the exact same benefits” as membership, because that would be in the interests of both sides, and they repeatedly complained that the EU was allowing ‘politics’ to get in the way of economic interests. In particular, they repeatedly argued that ‘German car makers’ (as an emblem for other EU industries) would ensure such a deal and, when that proved false, again framed that as an EU failure to represent the economic interests of its members and instead to prioritise Brussels ‘dogma’.

But (apart from their other flaws) these claims were mistaken by not recognizing that, whatever the immediate economic interests of some businesses, or even some countries, the long-term economic interests of all EU members and businesses were absolutely dependent upon retaining the integrity of the single market, and the expansive use of MR, even in its DA form, necessarily risks that, extensively recreating selective aspects of the single market for non-members. Now perhaps it is true that the possible impact of Trump’s tariffs will change the balance of calculations of the risks and benefits of this. But personally, I feel suspicious of yet again going down the track of making proposals based upon assumptions about what the EU will, or ‘ought to’ recognize as being in its own interests.

Having said all this, it could still be argued that Trump’s return, in a dramatically more aggressive and virulent posture than before, has changed everything, not so much, or not simply, because of the economic threat of tariffs but because of having started to rip up the international security order, and all the issues with which I began this post. Is this true? To be honest, I simply don’t know. In some ways, the opposite could be argued. To the extent that the single market is the economic basis of such geo-political clout as the EU has, that might suggest there is all the more reason to maintain its integrity.

Nevertheless, I do think that, despite what some ‘die-hard remainers' think, the understandable unwillingness of the EU to make economic concessions to the UK in return for security and defence cooperation, a proposition which was first made by May when Article 50 was triggered in 2017, and looked like blackmail then, may have changed. Almost everyone now thinks that Europe, as a continent, needs to get itself together as a serious defence player, and that is not going to be easy. It will entail the EU and its members doing many things they find distasteful, and this could be one of them. It might also be that previous, and again understandable, reluctance to entertain a complex and tangled MR-based relationship between the EU and the UK might be reduced. In a world which has suddenly become extremely disordered that might now seem a relative trivial piece of messiness. It would certainly be lazy simply to dismiss that possibility out of hand as ‘cakeism’, or to dismiss the very real differences created by Trump’s return. This isn’t 2016-2020.

The real choice

For all these reasons, there may well be a good argument for the UK to explore the BfB report’s ‘strong alignment’ model and propose it to the EU, at least informally, and see what the reaction is. But I keep coming back to the problem that it is very difficult to see how the EU can embark on a major deepening of relations without a high degree of confidence that the UK is going to be a reliable partner, and there is no real prospect of that whilst Brexitism remains so influential. After all, it’s perfectly realistic to think we may be only three years away from having a nationalist and populist government with a doctrinal hatred of the EU.

For Brussels, that would mean dealing with a UK government which has scant regard for acting in a trustworthy manner about any MR agreements which may be in force and would very likely revoke them anyway. The answer to that concern cannot, realistically, be that, if it happens, the EU can just revert back to the current TCA terms after having put in all the effort of creating an expansive MR regime involving a complex patchwork of agreements.

Some deny any such risk exists, arguing that UK business lobbies would prevent any future government from revoking agreements made by Labour. But this is really just the ‘German car makers’ argument in reverse, and the history of Brexit hardly suggests that business is very effective in controlling a government – in this scenario perhaps a Reform-Tory coalition – animated by ideological loathing of the EU and populist conceptions of ‘sovereignty’. So the risk is real, and it would be a very considerable one for the EU to take.

Moreover, although this wouldn’t in itself remove that risk, it can hardly be encouraging to the EU that the Labour government has not, as yet, made an explicit commitment even to seeking a DA deal on SPS, let alone to any more ‘expansive’ use of DA. As long ago as May 2023 I wrote a post with a footnote pointing out that whenever Labour politicians talked about an SPS deal they invariably invoked New Zealand (i.e. equivalence, not DA) as a model, and that has continued to be the case, so even in this headline area for the reset, the government still remains ambiguous about specifics.

For what it is worth, I think the government will seek DA on SPS, and will agree it with the EU, but it certainly hasn’t been open or enthusiastic about what doing so means, apparently because it fears the Brexiters’ reaction, hence again demonstrating the unsettled nature of the UK polity. So if the BfB report encourages the government to boldly advocate the use of DA, and to take on and defeat its Brexiter critics, then it will have done a good job.

On the other hand, if Brexitism were to be marginalised in the UK, overcoming this problem, then there would be no need to fiddle around with endlessly complex and sub-optimal MR agreements and security pacts as we could move, as quickly as possible, to joining the EU, boosting the continent’s economy, and developing a proper, fully-integrated, European defence and security capacity. So, for all the talk of the UK facing a choice between the US and the EU, the deeper choice that codes is the domestic one of what kind of country we are. That seems no closer to resolution now than it has been since, in 2016, we embarked on the poorly-designed, divisive and poisonous Brexit experiment, an experiment which has now become the most horrific of political lab accidents.

 

Note

*On the other hand, the British, Brexitist, variant of this global right-wing movement faces particular challenges. The British public has generally negative views about Putin and Trump, and a generally positive view of Zelensky (and support for Ukraine). Even Reform voters are strongly anti-Putin. As has been shown before Farage’s views of Ukraine and Putin are his most vulnerable political spot, and this is now becoming very clear.

Trump’s new world chaos offers possibilities for post-Brexit Britain

Last week, if anyone can remember that far back, the fifth anniversary of the UK leaving the EU provoked a welter of comment and detailed analysis from which it is hard to escape the conclusion that what I’ve sometimes called ‘the battle for the post-Brexit narrative’ is over. The public view that it was wrong to leave and that leaving has not been a success is entrenched and growing. The bulk of sensible and serious commentary, both in the UK (£) and abroad, endorses that.

Meanwhile, Brexit’s remaining defenders, such as Boris Johnson (£) and Nigel Farage, can only wail about the need to “believe” in Brexit, and the benefits they claim for it range from trivialities to demonstrable lies, the most frequent and most egregious being that it enabled an early Covid vaccine rollout. The very weakness of that defence, combined with the notable absence of celebration of the anniversary, show the abject failure of Brexit to deliver the promises made for it by its advocates.

The core problem in current British politics is that the Brexiters are too shameless to admit this failure, and utterly resistant to even the most modest attempts to address the consequences. Since, public opinion notwithstanding, this stance is baked in to both the Reform and Tory parties, and large and noisy section of the media, Brexit Britain is, as I wrote in my previous post, stuck. Like squatters, having trashed the house, they will neither get out nor allow the owners to repair it.

Thus a reversal of Brexit is politically unrealistic in any immediate timescale, and the government’s promised ‘reset’ is the only game in town. Yet even that has been pursued with frustrating timidity and slowness, not least because of the opposition of the Brexit wreckers.

However, in what has been a tumultuous two weeks, there are at least signs of the reset being pursued with more urgency and a little more resolve. Perhaps more importantly, the tumult, which derives from Donald Trump’s return to power, depressing and disorientating as it is, could present an opportunity to finally break out of the stale circles of the Brexit debate.

Reset: a new urgency?

It’s hard to deny that, even though these events were already planned, Trump’s explosive arrival in the White House put new meaning upon Starmer’s attendance at a meeting of EU leaders, to discuss defence and security issues, and the meeting next day of the EU-UK Forum, where EU Relations Minister Nick Thomas-Symonds delivered a major speech. At all events, although it was scarcely the first time that Starmer has talked about wanting an “ambitious” security partnership and reset with the EU, it was the first time that he and Thomas-Symonds set out a desire to agree a reset deal within the next three months.

It’s not clear how realistic this is, since the related announcement of a UK-EU summit to be held in May would imply that negotiations be completed in advance of this. Nevertheless, both the summit itself, which will be hosted by the UK, and the identification of a timetable, can be read as recognizing the need to deliver, and deliver quickly, on a reset which, so far, has mainly consisted of warm words.

Thomas-Symonds also spoke of the need to approach the reset with “ruthless pragmatism” in place of “ideologically-driven division”. Quite what this means is also unclear. Hopefully, it is a signal to British Brexiters (£) that the government is willing to take on their backlash against the reset, which I discussed in a recent post and which has been much on display in utterly ludicrous attacks on this week’s meetings in the pro-Brexit press*. If that is so, then it would be helpful for Thomas-Symonds, or Starmer himself, to give a big, uncompromising, and full-throated speech demolishing those attacks and advocating, with enthusiasm, a detailed agenda for the government’s still far too vague ‘ambition’. If not now, when?

Less optimistically, it might have been (or have also been) a signal to the EU that the government still clings to the familiar Brexiter line that Brussels should be more ‘flexible’ and less ‘ideological’ in its application of rules for third countries. That line is still, at least implicitly, what Farage believes would “improve” the existing deal, as if post-Brexit ‘red tape’ were an EU imposition rather than an inevitable consequence of decisions taken by UK and urged by Farage himself. I’m only guessing, but it seems to me at least possible that there are still people in the civil service and the cabinet who have the same view, if only because, even after all these years, there is still so much ignorance about how the EU works and what Brexit means.

But even the most optimistic reading of these developments (i.e. that Starmer intends to stand up to the Brexiters and to work realistically and rapidly to agree the most maximalist version of the reset), for all that it would mark a shift in gear compared with the last eight months, already seems inadequate to the scale and pace of events. For, based even on the short period since Trump returned to office, there is a good case for thinking that the fundamental recalibration of global politics, which I foreshadowed in a post in November, is now unfolding in plain view.

Trump’s global coup

That recalibration isn’t only, or even primarily, about Trump’s trade tariffs, which I’ll come back to. There is already a long list of other developments, including the pardoning of the J6 rioters; the forced deportations (with the associated bullying of Colombia and the planned re-opening and re-purposing of Guantanamo Bay); the quite extraordinary handing of access to government finance systems to Musk; the hounding of Federal agencies including the FBI; the attempts to suborn the CIA; the freezing of foreign aid; the purge of all forms of diversity initiatives; the bullying territorial claims made on Panama, Greenland and Canada; the grotesque and yet absurd proposal to “take over” Palestine and create a “Riviera of the Middle East”; the withdrawal from the Paris Accord and the World Health Organization.

That is only a partial list of what has happened so far, and there will undoubtedly be more to come, probably even as I am writing. But it is enough to eviscerate any lingering idea that Trump will show even the restraints of his first presidency. It may be chaotic, but is also a coup of sorts, and arguably an assault on the constitution. Under Trump, the US has launched a global attack on liberalism in its most general meaning, and on many of its specific attributes at home and abroad.

Even acknowledging that many of Trump’s announcements and executive orders are merely performative, that much of what he does will be heavily resisted, that his administration is likely to be characterized by incompetence and infighting, will not last forever, and may become domestically unpopular, it seems certain that the US will be permanently changed and, as a result, so will the rest of the world. Apart from anything else, it shouldn’t be forgotten that Trump is, in fact, doing what he promised he would do, and was given a clear endorsement for it by US voters. So, even if some of those who did so turn against him, it really can’t be denied that there is a deep groundswell of desire for the US to be a very different kind of country to that which, at least, the UK has known, or believed it has known, since, say, 1941. (I realise there is a lot that can be debated in and around that claim.)

Trump’s tariff weapon

When it comes to Trump’s new tariffs, these can be seen as an attack on economic liberalism, and to an extent they are motivated by economic protectionism. But they are not really, or at least not simply, about waging trade wars (although trade wars with China and the EU may be the result). More fundamentally, Trump is using trade as a weapon to intimidate other countries into doing his bidding in both economic and non-economic matters. The non-economic motive was most evident in the threat to Colombia, but was also present in those made to Mexico and Canada, and carried through against China.

The fact that Mexico and Canada struck last-minute deals on border protection to avoid the tariff attacks is in part an illustration of this, but it is also an irrelevance. For one thing, they are only temporary deals, and there is every reason to believe that, like a blackmailer, Trump will come back for more (and, even if he doesn’t, this episode will have done long-term damage to, for example, US-Canada relations). For another, the very rapidity of the reprieves is all of a piece with Trump’s almost cliched desire to ‘do the unexpected’ as a weapon designed to de-stabilize his perceived enemies. Indeed, as legal commentator David Allen Green has pointed out this week, although Trump is often described as ‘transactional’, his approach to deal-making is actually “anti-transactional”, so that “an agreement offers an opportunity to gain leverage, for a new negotiation, for a new exertion of power.”

However, whilst what is happening may be inflected through Trump’s baroque psychology (£), it is not reducible to that. He is both an expression of, and a vehicle for, a deep seam of sentiment in the US which sees the country as the put-upon victim of the international order (despite that order being largely the creation of the US). In that sense, Trump’s tariff attacks are part of the wider picture of a regime determined to use force to dismantle the constraints of law and convention abroad quite as much as those within the domestic sphere. That he has even spoken of the use of military force, extending to the sequestration of territory, against some of the US’s own allies means that, at the most basic level, the US can no longer be trusted by any of its allies.

Trump’s words and actions have therefore already fractured global society. It’s tempting to reach for historical analogies, which might range from Hoover’s Smoot-Hawley Tariff Act, to the America First Committee, to the endless debates about whether Trump is a fascist. But they really aren’t necessary. It’s enough to observe that he is what he is, now; doing what he is doing, now. Perhaps in the future it may seem an overblown claim but, just at the moment, it is plausible to say that we are seeing the beginning of a new global divide between rules and brute force. It is also not necessary to romanticize ‘the rules-based international order’, or to sanitize the history of US foreign policy, to see this as a momentous and highly dangerous development, with the potential to shatter previous alliances and enforce more-or-less binary choices on almost every country in the world.

What of Brexit Britain?

If this analysis, or anything like it, is correct, then the issues it poses for the UK, specifically, go well beyond those of UK-EU relations, although they encompass those relations, and beyond those of tariffs. Thus most current discussions, which focus on Britain having to navigate a careful path in the event of a US-EU trade war, don’t fully address what is at stake. It is not even as simple as picking a side between the US and the EU. It is about picking a side between liberalism and illiberalism (or worse).

This would have created profound problems for the UK even without Brexit, given the role it had roughly established for itself as a ‘transatlantic bridge’. But EU membership would have half-addressed those problems, anchoring one end of the bridge even as the other imploded. As it is, the combination of Brexit and Trump 2.0 has burnt both ends. This poses questions about UK-EU relations, of course, but Trump hasn’t simply turned on the EU. In some ways, the bigger issue his presidency has raised for the UK is illustrated by his assault on Canada, not just with tariffs but with the extraordinary suggestion that it might “cease to exist” as an independent country and could become “America’s 51st State”.

This, then, is an attack on one of Britain’s closest and most longstanding allies, and, indeed, a country of which the British monarch is still the Head of State. The UK-Canada relationship is also, let us not forget, a prime example of the kind of ‘old friendship’ which the Brexiters claimed would be rekindled by leaving the EU. Some even continue to fantasise about ‘CANZUK’ and ‘the Anglosphere’. Moreover, Canada’s relationship with the EU was constantly held up as the template for what Britain’s should become.

In this sense, Trump’s hostility to Canada, quite as much as his hostility to the EU, presents a moment of choice. What, now, should Britain do? Keep quiet? Seek to ‘navigate’ a path to spare itself Trump’s disfavour whilst its ‘old friend’ takes its chances? Indeed one might ask what Farage, the man who always claims to stick to his principles, to care deeply about national sovereignty, and to have a hot-line to Trump, had to say about Canada this last week or so. The answer, so far as I can find, is nothing.

Similar questions apply not just to the UK’s relations with the EU, generally, but to those with Denmark, in particular, and with Greenland. They also apply, in a different way, to its relations with China, which Starmer’s government has recently tried to reset. And they also apply, again in different ways, to its relations with global institutions. To put all this a different way, the vision of, at least, the global Brexiters was of being ‘freed from the shackles of the EU’ in order to participate fully in a global order, including but not limited to a global trade order, an order to which the US now is wholly opposed and bent on destroying. Even the Brexiters’ more limited notion of the Anglosphere was predicated on the US as a bulwark of the ‘rules-based’ order. Equally, they looked to NATO as the sole international basis of UK defence and security, an approach which now looks increasingly precarious. So even if there had ever been a geo-political logic to Brexit, which there wasn’t, the entire basis of that logic is now rapidly disappearing.

A UK-US deal?

To the extent that the Brexiters have any response to this situation, it is the idea of the UK creating a Free Trade Agreement with the US (and/or an exemption from new punishment tariffs). Indeed, some clearly imagine that this, finally, will be a concrete demonstration of the benefits of Brexit.

However, it is an utterly inadequate response. Although there is no doubt that Trump will dangle this possibility in front of Starmer, that doesn’t mean he will do such a deal. In fact, as is already beginning to happen, he is likely to alternately hint that he is going to spare Britain or that he is going to punish us, just as a way of demonstrating his power. But even if he does a deal, his protectionism and nationalism, not to mention his own concept of deal-making, will mean that it will not be a good deal for the UK, and will come with numerous conditions. In any case, as Mexico and Canada are finding as regards USCMA, a deal with Trump is not worth the paper it is written on. His “anti-transactionalism” means he is always liable to make some new demands for obedience from the UK.

Most importantly of all, were a US-UK trade deal to happen in the new context Trump has created it would, for what at best would be only a small economic benefit, engender not just dismay but disgust from most of Britain’s friends and allies. Brexit Britain would cease to be regarded by them, as it has been since 2016, with bewilderment and even sympathy, but instead with loathing and revulsion, a Quisling in Trump’s global war.

The very idea that Brexiters like David Frost should think that their project is justified by the ‘freedom’ to act in such a cowardly and contemptible way shows the depths and desperation they have reached. Certainly their advocacy of dancing a humiliating jig to the tune of a capricious bully removes any vestigial illusion that they are in any way patriotic.

Starmer’s opportunity

The temptation for Starmer, partly as a matter of temperament, but partly because Brexit has left Britain in such an enfeebled position, will be to go on doing nothing and saying little other than platitudes. But inaction and quietude will amount to taking sides or, even worse, will be seen by each side as taking that of the other. Likewise, it will not silence the Brexiter call for doing a deal with the US, with Farage and his acolytes acting as Trump’s Fifth Column in British politics.

Conversely, Starmer has a real opportunity to exert leadership, and in the process has been gifted an opportunity to release Britain from the drift and dither to which it has been consigned by Brexit. He could, in one bound, position the UK as an international beacon of probity, as a strong regional partner, and perhaps even as a galvanizing convenor of medium-sized and small powers, and in the process marginalize Farage as an unpatriotic scoundrel. Similarly, resistance to closer EU ties from the Conservatives and their media supporters could be positioned as undermining Britain’s staunch support for its allies. Doing so would go with the grain of public opinion. Trump and his side-kick Musk are not popular in the UK. Equally, there is public support for closer relations with the EU rather than with the US, and probably (though I haven’t found polling data) for siding with Canada, Greenland/ Denmark, and perhaps even Panama, against Trump’s aggression.

In this way, all the talk still coming from Badenoch, amongst others, of ‘honouring the will of the British people’ and ‘retaining our hard-won Brexit freedoms’ as a reason to oppose the reset could at a stroke be derided as the tired repetition of long-outdated slogans, wrenching political discourse free of the detritus of 2016 and its aftermath. That wouldn’t imply re-opening the Brexit question, or crossing Labour’s ‘red lines’, but it would imply pursuing a maximalist reset with the EU, at speed, and with open enthusiasm rather than coyness and reluctance. Doing so would not just reset UK-EU relations, it would also reset UK international relations generally and, perhaps most importantly, reset the terms of domestic political debate.

Starmer may never have a better chance than now, and, if he is to take it, then the sooner the better if he is to get kudos for being at the forefront of this new global divide. Standing up to Trump in this way would not be easy or cost-free for Britain. Doing so would have significant security and economic ramifications. But the same is true of not doing so. And it’s even possible, given Trump’s bullying temperament, that standing up to him might earn Starmer a degree of grudging respect.

In some ways, Starmer is ideally placed to take this kind of stance. As I wrote recently, his persona and politics are very clearly aligned with the principles of ‘rational-legal authority’ in both the domestic and international spheres, placing him in direct contrast to Trump’s ‘anti-ruleism’. However, at the same time, and relatedly, he is almost preternaturally cautious, lacking vision and perhaps distrustful of the very concept of vision, and as a result inclined to ‘wait and see’ and to dodge hard choices. Hence his current rejection of the bare idea that there is a choice to be made between the US and the EU. That is misguided even if the choice is framed in that way. It is even more misguided when the choice is framed, as it should be, between accepting or rejecting Trump’s new barbarism.

 

*Of these attacks, probably none was more ludicrous than that of Kate Hoey. It isn’t only that she sees betrayal in the UK Prime Minister meeting EU leaders, it is that having campaigned for years against membership of the EU because of its supra-national powers she now proposes that the UK need not deal with the EU at all, but simply with its individual members. And this is only one aspect of the idiocy on display in just this short clip.

Welcome to 2025

In one way, it has been a quiet period for Brexit news since my previous, pre-Christmas, post. That is hardly surprising, given the season. But it is only true if Brexit is understood in its narrow and literal sense. Understood in the wider sense of the unfolding of populist politics, 2025 has started with a noisy tumult, of a volume and variety which make it hard to analyze. For personal reasons (my mother died this week), this is a much shorter post than usual, but there is already no doubt that this is going to be an eventful Brexit year.

Brexit costs, again

Starting with the narrower and more literal issues, there has been another outbreak of claim and counter-claim about the costs of Brexit, largely sparked by a report in The Independent trying to summarize these costs. It referred to many of the studies and estimates which I’ve discussed previously on the blog, and provoked the usual criticisms of those estimates from the usual Brexiters (£).

Some of those criticisms have a spark of validity. In particular, as I’ve pointed out before, it is correct to say it is misleading to describe the ‘divorce bill’ as a cost of Brexit because they are payments for liabilities the UK had incurred as an EU member so, in that sense, would have been paid one way or another regardless of Brexit. Nevertheless, it shouldn’t be forgotten that many Brexiters insisted, amongst them Nigel Farage, that there would be no ‘divorce settlement’ to pay or, even, that the EU would owe money to the UK. Even when installed as Foreign Secretary, Boris Johnson said the EU could “go whistle” for a financial settlement.

The only research mentioned by The Independent which I haven’t previously covered, because it came after I’d written my previous post, was a recent study by the LSE Centre for Economic Performance. As was widely reported, this estimated that in the in the first two years since the transition period ended the UK had “only” lost £27 billion in trade, and that although this had been a “disaster” for small businesses, this is less, so far, than would have been expected from the long-term (15 year) OBR prediction. This caused much back-slapping in Brexiter circles (where the usual objections of it being too early to tell, impossible to estimate, and academics all being remainer stooges were suddenly forgotten). Yet it is hard to see why they should be so gleeful, since Brexit was sold on the basis that it was going to be of positive benefit.

So this, coming up to five years since the day we formally left the EU, is the level to which the grand promises of Brexit have brought us: arguing over just how bad the damage has been. Not a single leading advocate for Brexit has ever apologized for the promises they made. At best, they shrug them off as having been thwarted by remainers and the EU.

How we got here, again

That, too, isn’t a news item, but I am in the process of reading Tim Shipman’s Out, a massive tome which provides a lot of crunchy detail about the politics of the Brexit process, and it serves as reminder of what actually happened in those years. Admittedly, it is only a reminder of a certain sort, not because it is biased in any crass way but because it takes as its frame of reference the idea that this was a negotiation in which the outcomes were about the political power-plays between Johnson’s government, the domestic ‘Bresistance’, and the EU.

In those terms, it is highly informative. But what is missing (unless it comes further on than I have yet read) is an understanding of the real legal parameters in play. In particular, on the key issue of the Northern Ireland border, it proceeds as if a borderless hard Brexit was, in principle, a possibility, and what was at stake was simply whether or not it could be negotiated. In this sense, intentionally or not, it accepts the essentially unrealistic position of the Johnson-Frost-Cummings period of Brexit.

Good evidence that my assessment is an accurate one comes from the laudatory review of Shipman’s book by David Frost himself. Hailing it as the “definitive” account “at least until [his] own book is written” (an implausible boast, but one displaying all his habitual delusion and arrogance), he praises it as “objective and fair” which, from so partisan a figure, suggests the opposite might be the case. More specifically, Frost sees the book as vindicating all his well-rehearsed criticisms of the ‘remainer parliament’ (£), the Supreme Court and, especially the Benn Act. No doubt he would always have been liable to read it in this way, but the fact that he is able to find Shipman’s book susceptible to such a reading (whilst criticising other accounts as biased) is an indication of its fundamentally uncritical framing.

Even so, precisely because of that, Shipman’s book is valuable, partly because it confirms just how ignorant those enacting Brexit were about its realities, and partly because it confirms just how monocular their focus was on ‘getting Brexit done’, regardless of how it was done. This, in itself, gives the lie to the idea that Brexit was undertaken in a form that was foisted on them: Johnson and Frost chose it. That, in turn, also gives credence to Starmer’s claim that, even within the red lines of hard Brexit’ a somewhat different arrangement could be possible. 2025 will be the year when he needs to make good on that claim, if he is ever going to, but that is likely to mean a year of slow grind rather than great fireworks.

Donald Trump, again

The opposite applies to Brexit in its wider sense. This year is going to be an important one for transatlantic populism, and though the connections with Brexit are indirect, they are real. At the most general level, there has always been a connection, acknowledged on both sides, between Trump and Brexit. But there are two more specific connections.

One is to do with how the UK navigates its relationship with the US, and whilst Trump’s second presidency would always pose issues for that, it does so with particular force now that Britain has cut itself off from the EU. Just how poisonous that relationship may become has already been suggested by the berserk ferocity of Elon Musk’s attacks on the UK, and the Starmer government specifically (£), and the frenzy it has engendered in domestic politics. No doubt there is much more to come and, given Musk’s attacks on other European countries, the sense that the UK’s shared interests lie with the EU will be all the more obvious.

The other is the extent to which Trump’s return will be associated with the continued insurgence of Nigel Farage and his Reform Party. But this has the opposite implication for UK-EU relations, because the more it seems obvious that Farage’s populism is a strong and permanent feature of UK domestic politics, the less likely it is that the EU will regard the UK as a stable and trustworthy partner for any kind of new agreements, even those as limited in scope as Labour’s ‘reset’. Just this week, Brexiter fury about the appointment of Sir Olly Robbins as Permanent Secretary at the Foreign Office was a reminder of the hold of Brexitism in the UK.

Stay cool, again

I haven’t had time this week to give much attention to these developments, which is regrettable given how extraordinary Musk’s accusations have been, and the vile manner in which they have been endorsed by some British politicians. But, in another way, it is not regrettable at all.

I pointed out in a recent post how narcissistic politicians like Trump exert power partly by generating a frenzy of comment around their each and every utterance. That’s also true of Farage. It is probably even more true of Musk, not least because he isn’t, in the normal sense of the word, a politician. It is no coincidence that his latest stuff tries to mobilize the natural revulsion most of us feel about the disgusting crimes of grooming gangs. Nor is it any coincidence that it does so in ways calculated to mobilize counter-revulsion at its opportunism and dishonesty. These people want us – need us – to be excitable, angry, confused, befuddled, and upset. They want us to be freaked out by their freakishness.

So our best response, and, actually, our best resistance, is cool, calm, considered analysis. Not only do they hate it, but it’s also the best way of keeping sane in the face of the mad psychodramas they try to create.

I have a strong feeling that this year, more than most, it is going to be important to remember that.

Where is post-Brexit Britain?

I always try, and am usually able, to create an overall theme to each post on this blog. There are times, though, and this is one of them, when there is no particular shape to the latest Brexit-related events. Instead, there has been a ragbag of news, but that in itself is revealing of a more general drift.

Brexit still not done

So where to start? Perhaps with that part of Brexit which is still not, in the most basic meaning of the term, ‘done’: Gibraltar. As long ago as April, under the previous government, it was being reported that a deal was finally ‘imminent’, but nothing came of it. Last time I wrote about this, in October, I suggested that completing the deal was a key test of Keir Starmer’s ‘reset’. That wasn’t an unreasonable claim given that, just a few days afterwards, Nick Thomas-Symonds, the EU Relations Minister, said that doing so was “at the heart of” the reset policy. Yet the territory remains in post-Brexit limbo, leading to a large protest against the delays at the end of October.

Some of the urgency has been removed by the latest postponement of the new EU Entry/exit System, but that still leaves an inherently fragile ad hoc arrangement in place. Their fragility is well-illustrated by a row that broke out two weeks ago. In brief, under the ad hoc arrangements, Gibraltarians may enter Spain without having their passports stamped, so long as they have their Gibraltar ID card. However, last Friday fortnight, the Spanish border police instigated a check and stamp regime. It only lasted for a couple of hours before being countermanded by a higher official, but seems to have arisen because the local border commander did not have clear orders about whether or both Schengen area controls should be applied or not.

This is the second time the same local commander has taken this action, apparently from concern that he and his officers may be in breach of EU law by not applying normal controls. That is now a matter for the courts to decide, but it illustrates the consequences of the lack of a clear, formal agreement. Of that, the latest reports suggest only that the barriers to a deal are of a “deeply technical nature”, but that was also said last April.

In the meantime, the entire saga of Brexit and Gibraltar is the subject of an excellent new House of Commons Library Research Briefing by Stefan Fella, which amongst other things serves as a reminder of the complex issues which were obvious from the outset, but which Brexiters denounced as ‘Project Fear’. There are also signs of the situation receiving more media coverage in the UK, with a BBC Radio Four documentary on ‘the Rock that Brexit forgot” airing this week.

Reset still barely started

It may be that an agreement about Gibraltar will emerge this month or, perhaps more likely, in the new year, and be a sign of, so to speak, a reset of the reset, which began with some energy but appears to have foundered since. That seems possible because there is a sense in which any real progress was always likely to be deferred until the new EU Commission, and the second presidency of Ursula von der Leyen, were confirmed. This has now happened and, relatedly (though not necessarily directly so), Starmer has been invited to meet with EU leaders next February, the first time a British Prime Minister has done so since the UK left the EU.

That meeting is billed as being focused on security and defence issues, but the already planned EU-UK summit, which will take place next year, is likely to have a wider remit, taking in trade and regulatory relationships. A good indication of what the EU agenda for this might be was provided recently in a Bruegel policy briefing written by Ignacio García Bercero, a significant figure in the world of EU trade policy. Many of the issues it covers will be familiar to readers of the blog, and without rehearsing them here the main point I would make about the document is that it is deeply pragmatic, in the sense of recognizing both the constraints of UK and EU red lines and the possibilities that remain despite them.

That’s important because there are people, on both sides of the Brexit divide, who persist in saying that there is no prospect at all of improvements, whether they ascribe this to EU ‘punishment’ or a kind of Brexit ‘hair-shirtism’. On the remain side, in particular, there is sometimes the impression given that, for so long as Starmer remains committed to the ‘hard Brexit’ negotiated by the Tories, nothing can change. But that ignores the way that, even within the Frost-Johnson agreements, there was scope for a closer relationship, illustrated by the non-binding Political Declaration which they signed, even though they chose not pursue it. In other words, even within hard Brexit there exists a range of hardness.

Obviously, the significance of that shouldn’t be overstated. There’s a big gulf between the softest of hard Brexits and the hardest of soft Brexits. But there is an agenda, that in the past I’ve called ‘maximalist’, which whilst still ‘hard Brexit’ is different to Johnson-Frost, of the sort articulated by Peter Foster in the UK and, now, by García Bercero. Of particular relevance is a point the latter makes early on, about the apparent dropping of the UK red line against ECJ involvement under the Labour government. More generally, his key point is that “a repetition of Brexit discussions can be avoided if there is political will to explore the margins of flexibility around the red lines.”

Political will (or won’t)?

That clearly begs the core question of whether there is such a political will. If voices like García Bercero’s hold sway within the EU then, from that side, the answer might be yes. But what about the UK? One sign of a new seriousness might be the announcement of a new post of a second Permanent Secretary to the Cabinet Office, with a specific focus on the EU, and undertaking a ‘sherpa’ role there. The interview panel will, with depressing irony, be chaired by Gisela Stuart, who chaired the Vote Leave campaign, though not because of that but because she is now the First Civil Service Commissioner. It can only be wondered what attributes she will prioritise for the post, but the appointment will be made by Starmer.

At all events, the appointee is expected to be a heavyweight figure, and it is hard to see the point of creating this role unless it reflects real political commitment to the reset. That said, my general observation about this government is that it seems to place a premium on creating structures (delivery groups etc.) as if these, in themselves, solve problems. They don’t, although they may be a necessary precondition of doing so, and in particular they don’t, in and of themselves, create political will.

In this particular case, it remains to be seen what the political will is as regards a youth mobility scheme (YMS) which, even if under some different label, is evidently going to be a, if not the, key issue for the EU (a “threshold issue” as García Bercero calls it). We’ve repeatedly seen the Labour government dismiss this on the absurd grounds that it would somehow amount to ‘free movement of people’, but the question is how intransigent it will be.

As always, the problem is that Labour remains deeply neuralgic about anything relating to immigration. This was illustrated by Starmer’s response to the latest immigration figures, which he denounced as showing that “Brexit was used … to turn Britain into a one nation experiment in open borders”. It’s nonsense, and what’s worse is that it is the same nonsense that Farage is talking. What actually happened was that Brexit was used to create exactly what the Brexiters, including Farage, said they wanted, a wholly UK-determined immigration policy which used a points system set according to the needs of the UK economy.

For various reasons, not all economic, that led to an increase in the net migration figure, and a re-distribution of the countries of origin of immigrants away from the EU. That figure is now falling, also for various reasons, but these include new restrictions which are doing profound damage, especially to social care and to universities. What the Labour government needs, as Professor Jonathan Portes, the leading academic expert on this policy area, argues, is to be honest about immigration.

That raises bigger issues than that of a YMS with the EU, but honesty about that would, just in itself, be desirable. It’s an oversimplification, but not a huge one, to say that Britain left the single market, specifically, to appease public hostility to immigration. The country is paying a substantial economic price for that, yet without even assuaging the hostility. It is certainly freedom of movement of people, rather than a commitment to regulatory divergence, which explains why Starmer’s government will not even entertain the idea of single market membership, and is apparently willing to go on paying that price.

So the question now is whether that extends even to the YMS, with Starmer sacrificing things he undoubtedly wants, and the country undoubtedly needs – most obviously an SPS deal – on the altar of this immigration fetish. Just how high a price are we all meant to pay to pander to the sensibilities of a noisy minority who will never be satisfied anyway? It’s not even as if agreeing a YMS would take much political courage: opinion polls suggest 58% of the public think it is a good idea, and only 10% that it is a bad idea. Some reports in the last few days (£) suggest the government is coming round to agreeing some version of it, and my guess is that this will be true. If so, it would have been far better in terms of creating conditions for a maximalist reset to have accepted the idea wholeheartedly rather than being dragged to it reluctantly.

Meanwhile, things don’t stand still

With the new Commission in place, and Trump installed in the White House to concentrate minds, next year is probably going to be the crucial one in determining whether or not there is going to be any kind of substantive reset in UK-EU relations (though it would take longer than that to be brought to fruition). Even for that to happen needs some urgency of purpose to be brought to bear. For the reality is that any reset is not happening against a static background. That is most obvious in relation to the broad geo-political situation. But it’s also the case UK-EU relations are themselves changing, irrespective of any negotiations about them.

Two recent examples illustrate this (others can be found in the latest UKICE regulatory divergence tracker). One is the only now emerging realization that new EU product safety rules mean that British (in the sense of Great Britain) companies selling goods to the EU (including Northern Ireland) need a ‘responsible person’ within the single market to confirm compliance. As with so much of the Brexit-created red tape this will impact most heavily on small businesses, and it comes into force at the end of next week. At a stroke, this is a new non-tariff barrier to trade with the EU, and a thickening of the Irish Sea border. It won’t, to my understanding, be helped by the government’s Product Regulation and Metrology Bill because the issue isn’t alignment with EU standards, it is the certification of compliance (i.e. a version of the issue, discussed many times on this blog, that ‘alignment doesn’t mean access’).

A second example is that the EU Carbon Border Adjustment Mechanism (CBAM) is now beginning to bite (£) on British exporters to the EU, again with small businesses worst affected. In some ways it is a similar issue to the product safety one, in that exporters now need to provide evidence of the embedded carbon content of their products. However ultimately it will also mean not just reporting but, if necessary, tax being levied on that content.

Both of these examples are potentially within the scope of a UK-EU reset, though the word ‘potentially’ is doing a lot of heavy lifting. The first of them might conceivably be dealt with through formal dynamic alignment (note the tentative formulation). Less tentatively, because it is within the scope of the existing Trade and Cooperation Agreement, the second of them could be addressed by linking both UK-EU Emissions Trading Systems (ETS) and CBAMs (the UK version has yet to be created). Linkages of these are two different, though potentially related things, as García Bercero says. That is, it might be possible to link either, both, or neither (it’s also worth noting, as trade expert Sam Lowe explains, that these different possibilities could have different implications for the UK’s relationship with Trump’s US).

Everything is connected

Although I’ve bracketed that last point, because in a sense it’s a technicality, it does indicate the deep inseparability of all of the issues facing post-Brexit UK. That is to say, the more-or-less economic questions of terms of trade, including regulatory barriers to trade, with the EU cannot ultimately be separated from geo-political issues of the UK’s relations with the rest of the world. This means that not only do discussions of UK-EU relations take place within a dynamic landscape (e.g. new EU regulations) but also they do so as part of the UK’s positioning in an international order which is itself rapidly changing, and not only because of Trump’s coming presidency.

There are many moving parts in this, but they mean that my argument in a post at the end of the summer that the government needs a post-Brexit strategy already looks inadequate. I talked there as if UK-EU relations are a discrete issue. I’m not sure I actually meant to imply that but, at all events, it is now quite obvious that such are relations are imbricated in the entirety of UK economic, industrial, foreign and defence policy. It is equally obvious that articulating what this means for the UK is an urgent task.

There are limited signs that Starmer understands this, especially in the major speech he gave on foreign policy at the Lord Mayor’s Banquet this week. In it, he did at least attempt to do what Olivia O’Sullivan, Director of the UK in the World programme at Chatham House recently urged and “make an energetic case” to voters explaining the domestic importance of foreign policy and international relations. Whether it was as ‘energetic’ as needed is another question, but it was certainly an attempt to make the case. However, the content was anodyne, and didn’t give any real sense of the choices and trade-offs the UK faces.

By that, I don’t so much mean the headline reports that Starmer denied there was any need to choose between Trump’s US and the EU. That was entirely unsurprising, not least because, at this point, it’s not yet clear exactly what those choices may be (a situation which is unlikely to last, however). Rather, what was missing was an acknowledgment that Brexit has de-anchored the UK internationally, and created new constraints on its options. Instead, there were airy platitudes about Britain being “a strong, still point in a changing world.” Which, as politics professor Simon Usherwood of the Open University put it “leaves us... somewhere. With all the talk of a reset, there remains minimal evidence of a plan on Europe, in either abstract or concrete terms, which intrinsically weakens the ability to pursue whatever course is taken.”

Where is post-Brexit Britain?

It’s not enough. At the very least, there needs to be an explicit acknowledgment that the immediate post-Brexit strategy of ‘Global Britain’, already effectively abandoned by the previous government, does not provide a framework for the present government’s policy decisions. Which in turn requires specifying the framework which does. That could and should mean that where closer relations with the EU come into conflict with other demands it is the former which will be prioritised now. That wouldn’t be outrageous. Only the other day Foreign Secretary David Lammy said, as he has in the past, that a European reset is the UK’s “number one priority in foreign policy”.

Yet Starmer did not say or even imply that. Why not? Is this government policy or not? Without such consistency, Starmer’s promise that his country will be a reliable, dependable, and predictable international actor is virtually meaningless, since it gives no insight into where its priorities lie. How, then, can its actions be predicted? Conversely, unless relations with the EU are prioritised, how seriously should anyone, most notably the EU, take the reset?

That wouldn’t, in itself, entail an argument to ‘reverse Brexit’ by seeking to rejoin the EU in any form (which Starmer again ruled out in his speech). But it would entail publicly acknowledging that Brexit has created new problems, not new opportunities. Doing so would attract a flaying from the pro-Brexit commentariat, but would chime with public opinion by recognizing both that Brexit has not been a success and that there isn’t much public appetite to return to the Brexit battles in the immediate future*. In the longer run, admitting that lack of success would also be a necessary step to re-visiting Brexit itself, of course, but even those who want to rejoin at the earliest possible moment need to recognize that, whatever ‘earliest possible’ means, the UK needs, at least, an interim strategy.

However, I don’t really expect Starmer will do any of this. At best, he may put more energy into reset discussions with the EU in the coming year. At worst, he will drift along without much happening to show for the reset apart from warmish words. In that sense, the ragbag of this fortnight's Brexit events reflects more than my failure to find any shape to them. Rather, it captures the shapelessness of Labour’s post-Brexit policies and, more fundamentally, the shapelessness of the UK’s post-Brexit condition. It is a grim irony that on one edge of Europe there is war and civil unrest in countries which dearly wish to anchor their place in the world by joining the EU whilst here, on the other edge, we have given that prize away in order to drift into confusion.

The final words of Starmer’s Lord Mayor’s Banquet speech were that “Britain is back.” He didn’t say where.

 

 

*That is, support for holding another referendum doesn’t begin to approach a majority until posited as ten years hence. Interestingly, put at that time scale, Reform voters are the most supportive of it.  Admittedly the polling data I cited in the link is over a year old, so things may have changed but I haven’t found anything more recent on the specific question of timescales.

I can’t even bring myself to discuss the cretinous attempt to resurrect ‘Mutual Enforcement’ as an ‘alternative arrangement’ for Northern Ireland `(the Allister Bill) but may come back to it next time. It isn’t going to pass, but it does have a purpose in the context of the forthcoming ‘consent vote’ under the Windsor Framework in the Northern Ireland Assembly. For now, see the Best for Britain Blog on this, which notes, correctly but over-politely, that “the notion that such a process of mutual enforcement is remotely achievable is remarkably misguided.” 

Post-Brexit Britain’s Trump problem goes much deeper than trade tariffs

Brexit is back in the news again. That is partly the aftermath of the budget, discussed in my previous post, which was followed by speeches at the Mansion House by Chancellor Rachel Reeves and the Governor of the Bank of England Andrew Bailey. The latter highlighted the economic damage of Brexit and called for a re-building of relations with the EU “while respecting the decision of the British people”.

It's true that, as economics commentator Simon Nixon observed, this marked a notable break with official Brexit omerta. Still, it was not exactly dynamite stuff. The economics are well-known and the political message was identical to the government’s own stated policy. Indeed, Reeves’ own Mansion House speech said the same thing. In that sense, Bailey’s comments showed the limitations of government policy in that, as he must know, closer relations with the EU will only marginally reduce the ongoing costs of Brexit. So, despite being accused by Matthew Lynn in The Spectator of “reopening the Brexit debate”, Bailey hardly did that, unless even the barest mention of Brexit is now to be described that way.

If his comments attracted attention, it was mainly because of the wider context of now intense discussion about what the coming Trump presidency is going to mean for post-Brexit Britain. In my previous post I suggested that ‘hot takes’ on this were not wise, and to an extent I think that is still the case. Apart from the fact that he isn’t yet in office, he is by any standards a capricious politician. What he may actually do when he comes back to power is highly unpredictable.

Trump’s psychodrama

I don’t mean, of course, that it isn’t already abundantly obvious that it is going to be dire. The choices he is already making for key appointments demonstrate he is going to oversee a depraved, intellectually and morally bankrupt, regime. About the only thing which may save us from the worst is that it may well also be too incompetent and too prone to infighting to deliver what it threatens.

However, within that broad picture, it remains to be seen exactly what he does in terms of the two issues most obviously of concern the UK: defence posture as regards NATO generally and Ukraine specifically, and a blanket hike in trade tariffs. I’ll discuss the latter shortly, and whilst I won’t discuss the former in this post there is a good analysis by Benjamin Martell of Edinburgh University in The New European, building on his and others’ report for the Independent Commission on UK-EU Relations earlier this year.

Beyond the difficulty of predicting what he will do, I think there is an undesirability in doing so. One of the ways in which narcissistic bullies like Trump exert power – and it’s the same in playgrounds, prisons, and some businesses as it is in politics – is precisely to generate a psychodrama of fearful uncertainty around themselves: ‘what will he do? What will we do if he does that? What will he do then if we do that?’

In this way, those around the narcissist become unwittingly complicit in his way of exercising power. It is very difficult to find a way of resisting that kind of power, but one possibility might be to stand back a little from the frenzy. To play it long and cool, rather than short and hot. Admittedly, that is not a luxury open to the heroic defenders of Ukraine, but it might be good advice to the UK. However, as a matter of fact, political actors and commentators here are currently engaged in trying to work out what Trump means. So the frenzy can’t be ignored.

Trump’s tariff threats

In the UK, and very directly connected with Brexit, much of that frenzy has been to do with trade. Specifically, if Trump does impose a blanket 10% or even 20% on imports to the US it would mean, at the upper end of that range, an estimated 0.8% fall in annual UK economic output. That it is not even worse is because the bulk of UK exports to the US are services (which do not attract tariffs) rather than goods. But, in the context of already anaemic growth forecasts, and the very urgent political and economic need for improved growth, that would be quite bad enough. That seems to be the baseline assumption in most commentary, but of course if it turned out to be 10%, or if the uplift was only applied to certain sectors (and depending what these were) the impact would be less. But it still wouldn’t be good.

If any of these scenarios happens, then one response, and it may well be the EU’s response, could be to impose retaliatory tariffs on imports from the US. A trade war, in other words. The UK could do that on its own account, but it is far too small to be able to win a trade war with the US. So this exposes the weakness of post-Brexit Britain. For many of those opposed to Brexit, it re-presents a choice between the EU and the US, to which the answer must be the EU. According to Brexiters, though, the opposite is true (£), and being outside the EU means that the UK could strike a deal with the US on its own account.

Others, by no means confined to Brexiters, see a less stark choice. Peter Mandelson, tipped as the possible next Ambassador to the US, sees a third way, with the unfortunately worded suggestion (£) that the UK could “have its cake and eat it”. It’s a possibility endorsed (£) by the generally acute Financial Times commentator Robert Shrimsley. Similarly, Andrew Haldane, the former Chief Economist at the Bank of England, believes a deal is possible without prejudicing relations with the EU. One reason for making such a claim is that not only are most UK exports to the US made up of services, but it is services trade where the UK has a trade surplus. Given that Trump’s tariffs are aimed at those countries with surpluses in goods trade, the UK isn’t so much his target as potential collateral damage.

What does a ‘deal’ mean?

However, the discussion of all this has already become mired in confusion. That is principally because it has conflated two potentially very different things. One is the old Brexiter dream of a UK-US Free Trade Agreement (FTA), meaning, at its most basic, an across-the-board removal or reduction of all or most tariffs, but potentially including the removal of some non-tariff barriers to trade. The other is a specific deal to be exempted from the blanket imposition of Trump’s new tariffs. An FTA would improve the current terms of trade. An ‘exemption deal’ would simply return terms of trade to the status quo ante.

They are also different in that FTAs typically take a long time to negotiate, whereas an exemption deal, at least in principle, need not. And that reflects the fact that the things required of the UK for an FTA would be likely to involve substantial concessions on regulatory issues (‘chlorinated chicken’ being the symbolic one), especially as regards agriculture and pharmaceuticals. What would be needed for an exemption deal is less easy to predict, but could be things like voluntary export quotas, restrictions on Chinese imports, or agreement to import large quantities of US military equipment – but not, necessarily, regulatory concessions. [1]

These two scenarios therefore have different implications for the other side of the coin, UK-EU relations. An FTA, to the extent it entailed regulatory change, would move the UK further from the EU regulatory orbit. That would derail the current direction of Labour’s ‘reset’ policy, which is primarily based on continuing alignment with the EU. It would certainly derail the centrepiece of that policy, a UK-EU SPS deal (which would entail regulatory alignment on agricultural standards, especially). It would also have implications for Northern Ireland, which would remain bound by EU goods regulations, and thus would ‘thicken’ the Irish Sea Border. A more limited exemption deal might well avoid these things, but would certainly do political damage to the reset in terms of trust, assuming that it left the EU fighting a trade war with the US which the UK had managed to slide out of.

A trade deal with Trump?

Some Brexiters would undoubtedly argue that the distinction I’ve drawn is irrelevant, in that an FTA would also be an exemption deal (even though an exemption deal wouldn’t be an FTA). That’s true, but it doesn’t affect the point that an FTA would take longer to agree, and in the meantime there would be no exemption from the blanket new tariffs. Nor does it recognize the profound political difficulties any UK government would face if it met likely US demands on regulations.

But there is a more fundamental issue. Brexiters, both in the Tory and Reform parties, are now talking as if a UK-US FTA was there for the taking under Trump’s first presidency, and will now be available again. Kemi Badenoch is even claiming (£) that there is an “oven ready agreement negotiated by the last Tory government”. This is nonsense. There was no such agreement [2]. In fact, Trump blew hot and cold about a deal first time round. That’s actually a specific example of my earlier point about how narcissistic bullies use uncertainty to exert power. And even if he ever did offer such a deal, it would be on one-sided terms (that would probably be true under any US administration, but certainly under Trump’s ‘winner takes all’ version of deal-making).

In any case, this latest upsurge of talk about trade talks is exhibiting some of the same deficiencies as the earlier version. One concerns the relative importance to the UK of trade with the US and the EU. Brexiters, including Badenoch, are already wheeling out the misleading claim that the US is the UK’s largest trade partner. That’s misleading because it treats each member of the EU as a separate trade partner. They aren’t, to the extent that all are part of a single market and customs union. Brexiters really can’t have it both ways, saying that EU membership prevented the UK from being independent, especially in trade policy, but then talking as if each EU member is a separate trading entity. Secondly, it resurrects the misleading idea that a UK-US FTA would be much of an economic prize anyway. The previous government’s figures suggest it would provide an additional 0.07% to 0.16% per annum to GDP over 15 years.

Nevertheless, what we are going to see, and are already beginning to see, is Brexiters pretending that there is an easy, perfect solution to the Trump tariffs, but one that the Labour government is refusing to take because it is anti-Trump and pro-EU. We will see, as is also already beginning, Nigel Farage claiming with smirking self-importance that he has his own special relationship with Trump, giving him a unique influence and insight, just as he did first time round. Along with that will be noises from Trump supporters, and again they are already beginning, suggesting a deal is possible if only the UK abandons ‘EU socialism’. Trump will undoubtedly throw fuel on to that fire (‘I offered them a great deal, it was a beautiful deal, but they didn’t want it. I d’know why, I hear they preferred the EU, I d’know, but it was a beautiful deal’).

Beneath this, there is a still more fundamental issue. Trade policy is never wholly about economics, or economic rationality. But this is unusually so for Trump. If it wasn’t he would hardly even be contemplating the blanket tariff, which will increase prices in the US (though, despite what some think, that probably won’t bother his supporters). Instead, trade policy for Trump is about beating his enemies, in this context meaning the EU and China (which may face 60% tariffs). So there’s no point in thumbing through Ricardian theory on comparative advantage to try to understand Trump’s policy. But the corollary is that there’s no point in trying to frame responses in these terms.

In concrete terms, this means that the UK government should not weigh its (distinctly limited) options simply in terms of economic effects. An exemption deal might reduce the immediate economic damage, but its longer-term costs to the UK, both economic and geo-political, would be considerable in terms of the EU and, very possibly, China. The potential Chinese dimension is worth stressing, because at issue for the UK is not a just a two-way tug between the EU and the US, but being stuck between all three blocs. That was brought into focus by Keir Starmer’s attempts this week to improve relations with China, which might well be jeopardized by any form of deal with the US. To put all this another way, the only deals Trump does are those that favour him.

The cleavage in 21st century politics

This brings us to the final, and deepest, level of what is at stake here, and it is far more important than tariffs on this or that, or small percentages of GDP. It is that what Trump represents, as Brexit does, is what I’ve elsewhere discussed as ‘anti-ruleism’. In the most basic way, his anticipated blanket tariff policy makes a mockery of WTO rules. But his entire approach to politics is one which rejects the rule of law, scientific rationality, and, ultimately, the concept of ‘rational-legal authority’. I try to avoid social science jargon on this blog, but I think it may be useful here.

The sociologist Max Weber developed the idea that modern, industrial societies were increasingly characterised by systemic, codified rules and laws, objectively formulated and applied. So we obey X because s/he is the legitimate holder of the office (of President, or CEO, or whatever), not because of the person holding it. Weber contrasted that with authority that was ‘traditional’ (e.g. monarchy, church) or ‘charismatic’ (derived from the persona of the leader).

Trump fairly obviously seeks to elevate charisma over rules, but more to the point he embodies a hostility to ‘rules’ as a concept of social organization and politics. In this, he shares a common ideology with the ‘disruptor’ tech bosses, like Elon Musk, who now support him, and, in the UK, with their fanboy Dominic Cummings (£). He also shares it with Vladimir Putin, who relies on a peculiar admixture of charismatic and traditional authority, fused with nationalism, and is equally disdainful of the rules-based international order.

It is also shared by Boris Johnson, exhibited by the way that he (for perhaps idiosyncratic reasons) and the Brexit Jacobins (for reasons of fanaticism) believed it was acceptable to dispose of all conventions and institutions, including parliament itself, in order to ‘get Brexit done’. It is shared by Liz Truss, who still insists those institutions caused her downfall. Emblematic of this is the hostility of both Trump and the Brexiters to bureaucracy and, especially, the civil service, which, not coincidentally, was emblematic, for Weber, of rational-legal authority. That hostility is shared by Kemi Badenoch, in her aggressive diatribes against ‘the bureaucratic class’. Such anti-ruleism is obviously connected with populism, but it isn’t identical to it (there’s a book to be written there). The disjuncture is what did for Boris Johnson, when his disdain for the Covid rules fell foul of the populist idea that ‘rules should apply to all of us’. 

There are many different ways of understanding these developments. One way might be to see them in terms of the latest phase in the unwinding of the politics of the Cold War (that would need another book). Another, even more epochal, would be to see them as a kind of Counter-Enlightenment, in which the eighteenth-century battles over rationality are being re-fought but in the other direction (that’s a third book). Of course, the Trump presidency will not last forever. But there is a sense that deep and profound changes are now established in the US and elsewhere. And why not? Despite the brief moment when some claimed ‘the end of history’, history never ends.

However they are framed, the key point is that these developments are about far more than international trade. That is not surprising, because Brexit itself was about far more than trade with the EU; more, even, than membership of the EU. Needless to say, these are not the terms in which most people are framing the current situation, although Rafael Behr of the Guardian comes close to doing so. If it were framed that way then, indeed, the whole question of Brexit would be re-litigated. It is clear that the government have no intention of doing that.

Will Starmer’s government rise to the challenge?

Nevertheless, in terms of the division I have presented here, Keir Starmer is very much on one side, being almost the epitome of rational-legal authority or, so to speak, ‘ruleism’. That is something to be grateful for, yet even framed in the narrower terms of trade and tariffs his government’s response so far is rather wishy-washy. Reeves has spoken of seeking to do a deal with the US “whether that's through a free trade agreement or through further improvements in our trade and investment flows”. But in the same interview she pledged that “we’re not going to allow British farmers to be undercut by different rules and regulations”, effectively ruling out an FTA. As for some exemption deal on new tariffs, she just says that “we'll make the case for free and open trade”. What does that mean in practice? Who knows.

Perhaps, when Trump’s intentions become clearer then so will those of the British government. But my hunch is that they won’t. I don’t think that the government is, as I put it earlier, playing it long and cool. I think it will simply try to muddle through, dodging or fudging the choices in the hope that they become irrelevant, if only through the decisions made by other countries. Arguably, in a situation in which the UK has so little leverage and so few good choices available, that has a certain pragmatism. But as a response to the bigger framing of those choices gestured towards in this post it is wholly inadequate.

Why are Labour in this situation? In some ways it is because, faced with Trump, any British government, like the governments of many other countries, has an almost impossible problem. But, just as, for Britain, Brexit adds to all the economic problems that other countries face, so too does it add to the Trump problem. For this government, in particular, that is compounded by its commitment to a Brexit policy which it does not believe in but is unwilling, and perhaps unable, to repudiate.

 

Notes

[1] This is my amateurish take on the question. For more detailed analysis (though I think it is pretty much compatible with mine) from trade experts, see Sam Lowe’s Substack newsletter, David Henig on the UK Trade Policy Observatory blog, and Dmitry Grozoubinski’s guest post on Ian Dunt’s Substack newsletter.

[2] It may be that Badenoch was referring to the previous government’s statement of the case for such an agreement (2020) Even if so, that was, emphatically, not an agreement with the US, still less one which is now ‘oven ready’ to be signed with Trump.