International trade is not a place of high emotion. It’s supposed to be the site of cool, rational, calculated self-interest. But politics is a place of high emotion. Emotions matter. They define the way that governments are seen and whether they succeed.
We’ll find out the details of Donald Trump’s tariff regime this evening. He calls it “liberation day”, but the timing is more revealing than the branding. It’s been tabled for after the markets close so that they don’t immediately go into freefall after he finishes speaking.
square KATE MALTBY
JD Vance's free speech hypocrisy is a threat to Starmer - and the UK
Read MoreThe US president thinks this way because he is incapable of imagining a mutually advantageous relationship. He only recognises zero-sum. That is a barren, broken, nihilistic way of looking at the human condition in general and the trading system in particular.
This is partly the Government’s fault. Chancellor Reeves and Keir Starmer should never have left themselves so exposed, especially once they knew they were dealing with the Trump administration. There was an opportunity, during the initial Trump shock, to make fundamental changes to their position, as Germany has done on borrowing.
Labour is not to blame, however, for Brexit, which is what has made us quite so exposed. If economists in 2015 could have seen what’s happening now, they would have considered it a preposterous horror story. First, Britain put up severe obstacles to trade with its largest partner, in the form of regulatory and customs checks. And now it faces sky-high tariffs with its second biggest partner.
Britain does not have these advantages of scale, so Starmer has furiously tried to secure a deal for preferential treatment. This is entirely rational. He is following a sensible, conscientious agenda which aims to protect British workers.
Fine, but that agreement may prove a bigger humiliation than anything happening today. Reports indicate that the Government is prepared to slash the digital services tax for big US tech companies like Amazon, Meta, Alphabet and Apple and then try to make up the money by taxing smaller tech companies based outside the US. It is also ready to lower tariffs on US beef and chicken imports, which would provoke another angry backlash from farmers.
But the basic reality is that we are having elements of our domestic policy dictated by tech bros in the White House, in a desperate attempt to reduce the economic damage inflicted by a narcissist president, which has an outsized effect on the UK because of our global isolation and economic stagnation. It is a grim, humiliating position to be in.
You can understand why Labour is doing what it’s doing, but by God it’s hard to watch it while maintaining a sense of national pride. Eventually that feeling, as ephemeral and hard to define as it is, could do more damage to the Government than Trump himself ever could.
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