Sir Keir Starmer has been urged to lean towards the United States rather than pursuing closer ties with the “socialist” European Union if the UK wants a long-awaited trade deal with Washington, a top advisor to Donald Trump has warned.
An agreement has proved elusive throughout Joe Biden’s presidency, but some believe Trump’s thumping victory in the US election could see negotiations revived.
The president elect’s promise to slap bruising tariffs on America’s trading partners has prompted unease among other major economies, but his economic advisor Stephen Moore told The Times that the Republican is determined to push forward with them in order to boost employment and industry.
However, it’s thought that if the Labour government persists with attempts to build a closer trading relationship with Brussels, as Sir Keir seeks to “reset” relations with EU leaders, it could prove to be another obstacle for a UK-US deal.
Speaking to the outlet from Trump’s sprawling Mar-a-Lago estate in Palm Beach, Florida, Moore said: “I’ve always said that Britain has to decide — do you want to go towards the European socialist model or do you want to go towards the US free market?
“Lately it seems like they are shifting more in a European model and so if that’s the case I think we’d be less interested in having [a free trade deal]”.
He added that he hopes the UK will “move towards freedom but that doesn’t seem to be the case given the budget that they just came out with in London”.
Moore said a deal would be in the interests of both countries, and argued that Washington’s closest relationship in Europe is with Britain.
“I’ve always been in favour of a free trade agreement with the Brits but for one reason or another it hasn’t happened,” he said. “It would make sense to me … I think we do have a special relationship with the Brits more than we do with the Germans and the French and the rest of Europe.”
If the UK fails to secure a deal it could be hammered by the tariffs along with other European nations, with the National Institute of Economic and Social Research warning they could see Britain’s GDP growth slashed in half and trigger an inflation rise of 3 to 4%.
Meanwhile, economists at the University of Sussex’s Centre for Inclusive Trade Policy (CITP) said the treasury faces a £22bn hit to exports if a blanket 20% tariff is imposed on all imports into the US.
The analysis from earlier this month also suggested UK exports to the world could could plummet more than 2.6% as a result of lower trade with the US and knock on effects to the global economy.
The Chancellor Rachel Reeves has insisted that the Labour government wants to improve trade links with the US and China, as well as improving Britain’s economic relationship with the bloc.
“We will not be reversing Brexit or re-entering the single market or customs union, but we must reset our relationship,” she said.
Speaking as he travelled to this week’s COP29 climate summit in Azerbaijan, the Prime Minister downplayed suggestions the UK could find itself at the centre of a trade war between the EU and the US, saying: “I want good relations with all of our allies, that’s really important — whether that’s the EU or the US,” as per Politico.
“Obviously European countries are our nearest trading partners and we have got a long shared history,” he said, noting the two world wars the continent has endured.
“But equally the special relationship with the U.S. was forged in difficult circumstances, it’s hugely important to the U.K. I want to ensure we’ve got good relations with all of our important allies, and that includes the EU and the U.S,” he added.