He was supposed to be its biggest fan, but Donald Trump has just declared war on Brexit, says ANDREW ADONIS
Terrible news for the Brexiters: Trump has declared war on Brexit. The good news is that he has done so in time for us to reassess the value of the EU for our trade and security.
Remember ‘Global Britain’? All those trade deals Liam Fox was going to sign once free from the tyranny of Brussels? How UKIP’s friend Donald Trump was going to put plucky Britain at the front of the queue, having watched the films Dunkirk and Darkest Hour?
All that just died when Trump slapped a 25% tariff on UK steel imports and announced that ‘trade wars are good’ and he would win them. This is a humiliation for Theresa May, not only because Trade War Trump is unlikely to be doing deals of value to Britain, but because, having decided on his trade war, he went out of his way to do down Britain.
Trump was presented with two options. The first was for a 53% tariff on just 12 countries. This would have targeted the main culprits for ‘dumping’ lower priced steel on the US, and avoided hitting US allies.
Instead, Trump went for an across-the-board 25% tariff, hitting Britain, even neighbouring Canada, equally. And this despite a beseeching personal phone call from May.
Why did he do this? It is easier to ‘police’ a single tariff on all imports. It avoids discrimination arguments in the WTO. It also makes a more dramatic gesture for a president who deals in little else. What about the ‘special relationship’ with the UK? Strip away the warm Churchillian words – not many of those pass Trump’s lips anyway – and the essential US interest is in defence co-operation. Trump figures correctly that given the huge US commitment to NATO, Britain won’t fall out of line. It is a master-servant relationship, and we are the servant.
For Britain, steel exports worth nearly £400 million a year are at stake. It’s now touch and go whether our steel industry will survive, and Britain’s vulnerability to capricious trade bullying by the US has been demonstrated cruelly.
Thank goodness we are in the customs union and single market, where there is no danger of unforeseen or capricious tariffs and we have complete security for our trade. Oh, but didn’t someone say we were thinking of leaving?
As we reassess the collapsing intellectual remnants of a ‘Global Britain’ outside the EU, other elements of the Trump trade war ought to alert us. First, even existing trade treaties with allies are being questioned. NAFTA has been in Trump’s sights from the first day he started campaigning, and a lurch to suspend parts of it could come at any time. Even if we got a trade deal with an American president, and it passed Congress – two huge ‘ifs’ – it would still be vulnerable to political uncertainty thereafter.
By contrast, the EU is a legal construct of a wholly different order to a trade deal. Its trade regime can’t be chopped and change at the whim of populist governments.
But second, what chance would there be of a good trade deal between Britain and with even the most favourable US president? The imbalance of power, and the raw protectionist interests in the US, are so great that it is almost inconceivable. Third, trade deals take time. Years and years. Yet we now have precisely one year before we leave the EU.
As Brexit day becomes a matter of months, this becomes ever more urgent. It also raises an important issue barely debated yet: the procedure for the UK leaving the European Economic Area, continued membership of which would be the next best thing to full membership of the EU.
The government is hoping to smuggle departure from the EEA through in the EU Withdrawal Bill currently before the Lords. But if they have to go through the withdrawal procedure laid down in the EEA Agreement itself, they have to give notice. The required period? Twelve months!