Category Archives: European Union

Britain, Economic, European Union, Government, Politics, Society, United States

EU reset: No time for UK passiveness

EUROPEAN REALIGNMENT

FANATICS of Britain’s departure from the European Union have struggled to quantify the Brexit dividend and what benefits it brought, but when Donald Trump unveiled his schedule of global tariffs they finally had a number to point towards. It was the difference between the 20% levy imposed on all continental exports and the 10% baseline figure payable on British goods.

A week later the gap closed leaving Brexiteers melancholic and dejected when Mr Trump reversed his plans. What the tariff schedules will look like at the end of the 90-day “pause” is no more predictable than any other feature of current US policy. There is no obvious concession from the UK government that might induce Washington to lower its 25% barrier against car exports, and the 10% rate on everything else looks non-negotiable.

Meanwhile, dialogue with the EU about closer cooperation continue apace. The UK hopes to have a framework agreement in place in time for a summit in London in May. The primary focus is security, but that is intended to be a forerunner to closer trade alignment.

As an indication of accelerating rapprochement, Rachel Reeves, the Chancellor, has just attended a meeting of EU finance ministers in Warsaw. Plans have been announced for a pan-European defence procurement fund with the UK expressing an interest to be included. There are hurdles still to be overcome but also strong will on both sides to make it happen. It is a measure of how much more constructive diplomacy has become under Labour. No Tory government would have sought such collaboration. Regime change in Westminster made a closer EU-UK relationship possible, then Mr Trump’s rampage of destruction through the norms of transatlantic security and global trade made it urgent.

The Brexit withdrawal treaty and subsequent trade and cooperation agreement were deliberately shaped by Boris Johnson’s government to impede reintegration on any level. Irreversible divergence was the whole point. But, while there is no great appetite in Brussels to revisit the terms of Brexit that damaged British businesses and interests more than the EU, recognition of a mutual strategic interest and a more constructive disposition are necessary. The long-term economic rational is being hampered as the UK continues to operate within red-lines drawn by domestic electoral imperatives.

European leaders fully understand that democratic politicians must defer to public opinion. But with Sir Keir Starmer having earned goodwill through his diplomatic advances, the prime minister’s reluctance to ever challenge the fallacious premises of Brexit, even after winning a landslide general election victory last year, raises doubts about the true scale of his ambition when it comes to the EU reset. That misgiving is magnified whenever British ministers talk enthusiastically about their dealings with Mr Trump, who doesn’t hide his hostility to the European project. Sir Keir insists it is not a binary choice, but it will become one as soon as concessions to the White House threaten to destroy trust in Brussels or further impede access to the single market.

The claim that the UK can be equidistant between Europe and the US may feel like keeping options open, but in Brussels it looks like a reversion to typical British Eurosceptic ambivalence. Sir Keir faces a stark strategic dilemma, and his options get worse the longer he defers the choice.

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Britain, Economic, European Union, Government, International trade, Politics, Society, United States

Trump’s tariffs: a deliberate and revengeful choice

WORLD TRADE

DONALD TRUMP’S revisionist structure of world tariffs against an already embattled trading system is as though an asteroid has crashed into the planet, devastating everyone and everything that previously existed there. The comparison is useful but there is this important difference. If an asteroid struck the Earth, the impact would at least have been caused by ungovernable cosmic forces. The assault on world trade, by contrast, is a completely deliberate act of choice, taken by one man and one nation.

The US President’s decision to impose tariffs on every country in the world is a shocking and momentous act of folly. Unilateral and unjustified, it was expressed in indefensible language in which Mr Trump described US allies as “cheaters” and “scavengers” who “looted”, “raped”, and “pillaged” the US. Many of the calculations on which he doled out his punishments are perverse, not least the exclusion of Russia from the condemned list. The tariffs – imposition of direct taxes – mean prices are certain to rise in every economic sector – in the US and elsewhere – fuelling inflation and very likely recession. Trump will presumably respond as he did when asked about foreign cars becoming more expensive: “I couldn’t care less.”

The tariffs – a minimum of 10% on all imports to the US, with higher levels on 60 nations that have been dubbed the “worst offenders” – throw a hand-grenade into the rules-based global trading order. These are large hikes, even for nations like Britain that have escaped the higher tariffs. They are indiscriminate between sectors, highly discriminatory against nations, even to the extent of penalising uninhabited islands in Antarctica. Foul.

The world trading system established under US leadership at Bretton Woods after the Second World War has been overturned. In effect, the nation that has underpinned the global economy for the last 80 years has expelled itself from the trading system it always led. That system’s cardinal principle – that countries in the World Trade Organisation should treat one another equally – has been blown apart.

The ceremony on which Trump made his announcement conveyed the thrill he derives from bullying and domination. A month after shutting down US development aid, his retribution list embodies special contempt for the world’s poor – 47% tariffs on Madagascar, the world’s ninth poorest country, for instance, or 44% on devastated Myanmar. While much pre-announcement rhetoric was directed at China, some of the toughest tariffs have been inflicted on countries such as Cambodia, Vietnam, Thailand, and Laos. The impact on US soft power is likely to be devastating.

In the UK, the government is trying to remain stoic. Like its trustworthy trading allies, Britain must do what it can to maintain the rules-based trading system by keeping calm. But economic war is clearly beckoning. The UK is now said even to be preparing a list of reciprocal tariffs on US goods. It is particularly vital that Britain defends its interests in food and health systems, and against the powerful digital tech giants.

Any kind of notion that Britain is some kind of winner in these circumstances, thanks to Brexit, is nonsensical. This country’s supposedly closest ally, the US, has just hiked the cost to British exporters by 10%, with an even greater rise of 25% in the case of steel, aluminium, and cars. The consequences of Trump’s tariffs will not be restricted to world trade but will impact on the global economic system more generally. This is a momentous macro moment. It will require macro responses.

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Britain, Defence, Europe, European Union, France, Government, NATO, Politics, Russia, Society, Ukraine, United States

Europe can deal with America’s perfidy

A NEW WORLD ORDER

Intro: Europe is stepping up. If it perseveres, and its leaders keep their promises, then it will be better able to deter Russia on its own – and survive in a reordered and more hostile world

A WATERSHED moment is upon us as Britain and the entire European continent faces a turning point, a second Zeitenwende, and a new world order. Whichever turn of phrase best describes the dramatic shifts unfolding since Donald Trump began his second US presidential term in January, one thing is certain: nothing will be the same again. The key question now is what, in practical terms, Europe can and will do to meet this challenge. Is this paradigm shift in the world order Europe’s moment, when it finally comes of age as a global player? Or will the EU and its close neighbours collectively fail to rise to the occasion, condemning their citizens to an era of domination by bigger and more determined rapacious powers?

With incautious recklessness, Donald Trump is in the process of attempting to do three extraordinary things. First, he is trying to force Ukraine, which has spent more than three years under murderous assault, to accept a “peace deal” on inimical terms dictated by himself and the aggressor, Vladimir Putin’s Russia. Second, in a stunning reversal of US policy, he is seeking a rapprochement with Moscow that includes re-establishing full political and diplomatic relations, lifting sanctions and launching joint economic partnerships. Third, he is telling Europeans they must henceforth defend themselves; that the US, in effect, is no longer a loyal, reliable partner or even necessarily a friend, and that NATO, for 76 years the solid bedrock of transatlantic security, is dispensable.

European leaders are broadly united in their alarm at all three of these unwise, irrational, and dangerous interventions. At the same time, most accept that even if Trump didn’t hold office, a change in the balance of US-Europe relations is inescapable and more than overdue. In a national address, Emmanuel Macron, France’s president, summed up the position well: “Europe’s future should not be decided in Washington or Moscow,” he said. “The war in Ukraine… continues with the same intensity [but] the US, our ally, has changed its position.” As a result, Europe was entering a new era of self-reliance.

Mr Macron, like many others, was accused of appeasing Putin in 2022. He has learned better since. He warns now that Russian imperialist aggression “knows no borders”, directly threatening France and Europe. This is not just talk. He has shown imaginative leadership, producing a tentative plan for a staged ceasefire that has Ukrainian support, lobbying, flattering, and even correcting Trump to his face in the Oval Office. The French president has also been promoting an Anglo-French proposal to deploy a European “assurance force” in Ukraine composed of a so-called coalition of the willing.

There has been repeated recourse in recent days for Europe to “step up” as a matter of urgency. Germany surprised many with a positive leap into the future. A country that nurtures visceral horror of debt announced a spectacular U-turn of its own – the amending of its Basic Law to permit multibillion-euro investments in defence and national infrastructure. Quite remarkable given that Friedrich Merz, the Christian Democrat who held off the far-right to win last month’s federal election, has a reputation as a fiscal conservative. Not any more. And he has gone further even than Macron in urging Europe’s “independence” from the US and pledging ongoing, expanded military aid for Kyiv. Other European leaders, notably Donald Tusk, have “stepped up” in commendable ways, too. Poland’s prime minister is in an unenviable position. A strong adherent in the transatlantic alliance, he, like so many others, now must feel utterly betrayed by Trump. There is a real sense of perfidy in the air. NATO is a crucial shield for Poland, as it is for the three neighbouring Baltic republics.

Keir Starmer also recognises the historic nature of this moment, and has risen to meet it. He has worked assiduously and with due care to restrain Trump’s worst instincts. His evident contempt, displayed in the House of Commons, for the ignorant comments of US vice-president JD Vance about “random countries” showed he is not afraid to push back. The PM’s collaboration with EU leaders is a very welcome post-Brexit development that should be extended beyond defence and security. Yet like them, the UK faces daunting hurdles.

These challenges – on reducing Europe’s reliance on America, boosting its defences, and maintaining support for Ukraine – were the focus of the emergency EU summit. As is often the case in Brussels, the results were mixed. New overall defence spending of £670bn was agreed. But whether it ever materialises will depend on national governments’ willingness to borrow. The usual divisions were apparent – such as Hungary blocking a joint statement on Ukraine. Within NATO, most member states, like Britain, are now committing to higher spending. Non-EU countries, such as Norway, are also piling in. Oslo is belatedly, yet commendably, doubling its aid to Kyiv.

Europe is stepping up. If it perseveres, and its leaders keep their promises, then it will be better able to deter Russia on its own – and survive in a reordered and more hostile world. But how effective Europe can be in rescuing Ukraine in the short term from a developing Trump-Putin axis is in serious doubt. Trump still refuses to provide Kyiv with meaningful post-war security guarantees. His suspension of military aid, mapping, and intelligence assistance is encouraging Russia to intensify attacks. More civilians are dying each day because of Trump’s treachery. With each passing day, Ukraine is further brutalised and degraded. A just peace looks further away than ever. 

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