Can the special relationship overcome Trump’s protectionist dialogue?

For ultra-Conservative politicians like Nigel Farage, Anglo-American relations have never been better. With Trump in the White House and Britain leaving the EU, it was time to celebrate. When Farage stepped into the lobby of Washington’s plush Hay-Adams hotel earlier this month, to deliver a keynote speech at the Conservative Political Action Conference, one would be forgiven for glossing over the fact that Farage wields no power in the corridors of Westminster.

Nevertheless, the current pastiche of Fox-branded Conservativism is central to the Trump presidency, and it is the Trump presidency that will forge a new era in Anglo-American relations post-Brexit – one that Brexiteers believe will ultimately result in an iconic US-UK trade deal surpassing anything that could have been offered by Brussels.

It seemed Mr Trump agreed, hosting Theresa May just days after his inauguration. The Prime Minister was the first international leader to visit the White House in the Trump administration, and very obvious attempts were made by both sides to reaffirm the “Special Relationship”. Mr Trump held Mrs May’s hand on the walk down the colonnade and assured the world’s media that the US will always have Britain’s interests at heart, likening their relationship to that of Ronald Reagan and Margaret Thatcher in the 1980s.

It was great PR from both sides, but as with many subsequent press conferences from Trump and May, it lacked any evidence of substantial policy to provide certainty as to how this relationship would work in practice. Naturally, the two nations will always continue to collaborate and defence and security matters and will be natural allies in global conflict. For example, Trump affirmed his commitment to NATO, and the two nations reached an agreement in December 2016 to deploy US-built F-35 fighter jets on the Royal Navy’s new fleet of aircraft carriers.

However, the success of Theresa May’s government lives and dies by the completion and success of Brexit. 52% of the population, we are told, voted to take back control of Britain’s borders and statute books, and give Downing Street the power to agree its own trade deals. Therefore, a crucial marker for the success of any post-Brexit government will be its ability to strike better trade agreements for Britain than if it were a member state of the EU. Naturally, all eyes will be on trade negotiations with the US – its largest single-nation trading partner, when Britain leaves the EU in 2019.

Similarly, Donald Trump’s presidency lives and dies by his perceived ability to ‘Make America Great Again’, with his ‘America First’ rhetoric appealing to voters in states like Pennsylvania and Ohio where the decline of traditional industries has caused jobs and incomes to stagnate. It should come as no surprise to anyone Trump’s ‘America First’ policy has significant implications on the administration’s approach to global trade. After all, his campaign speeches often criticised the Obama administration’s handling of the North American Free Trade Agreement (NAFTA).

What started as vague threats on Twitter has recently turned into real action, with Trump announcing tariffs of 25% tariff on steel and 10% on aluminium imports on March 9th, a move which apparently triggered the resignation of Gary Cohn, Trump’s chief economic adviser. This followed announcements in January over tariffs on solar panels and washing machines – all decisions made in Trump’s mind to protect American businesses and give a competitive advantage to US-based manufacturers, by increasing the prices of foreign goods.

Although the White House has offered exceptions to the tariffs for America’s, the move has been heavily criticised by China and South Korea, who supply the US with aluminium, steel and white goods. They both believe that the policy violates World Trade Organisation rules, though Washington argue that the tariffs are in the interests of national security under Article XXI of the WTO treaty. At the time of writing, European Council president Donald Tusk is urging the US to resume trade talks on the Transatlantic Trade and Investment Partnership, in response to Trump’s threat of increased taxes on EU cars.

So where does this leave Britain? Clearly, protectionist trade policies and threatening America’s most important existing agreements in TTIP and NAFTA make for a less-than-ideal environment for Liam Fox and his team, tasked with eventually securing the US-UK trade deal promised at the start of Trump’s presidency. Fox’s first task is to ensure the UK will be exempt from the punitive tariffs on steel and aluminium while it is still a member of the EU, a tariff that has many British companies such as Jaguar Land Rover very worried.

As for the wider promise of securing a US-UK trade deal after Brexit, it’s clear that Trump’s ‘America First’ approach to global trade will most likely make for an uncompromising approach to future talks with London. The UK’s aviation industry has already expressed concern over compromises to existing agreements, which could limit flights between the two nations. Boris Johnson was right to claim that the UK was “first in line” for trade talks with the US, but Trump’s current stance suggests his loyalty to his domestic supporters will outweigh any concessions the UK can expect on trade talks in the name of the ‘Special Relationship’.

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