Is globalisation “over”? That’s the line the Prime Minister is putting out in response to Donald Trump’s tariffs – a fusillade blasted by the President into his own feet, which is now ricocheting through the world economy.
For a government elected on a pledge of “securonomics”, the White House’s assault on the stability of markets, the function of global trade and the way in which the vast majority of human beings collaborate to create and spread wealth is a uniquely awkward challenge.
Back in 2023, Rachel Reeves defined securonomics as “securing the finances of working people. Good jobs, decent pay, strong public services and an end to relentless increases in the cost of living.”
These are desirable goals. The Labour Party was pitching squarely to the electorate’s desire for a break from well over a decade of economic, political and military instability.
Arguably, the re-election of a one-man wrecking ball to the world’s most powerful office makes that desire for security all the more pressing. Unfortunately, it also makes it harder to deliver.
Globalisation, in the sense of trade becoming incrementally but inevitably more free, integration of supply chains, and the boon of exchange of goods and services benefiting both seller and buyer, has undoubtedly been dealt a severe blow by the tariff bomb.
But in the sense that our economies are bound together, the aftermath shows that globalisation is still going. It used to be said that when the United States sneezes, the world catches a cold – now the US has punched itself in the face, and as a result we all have a headache.
I wrote a few weeks ago about the foolishness of both first-strike protectionism and of retaliatory tariffs. Sabotaging your own economy is no sort of meaningful retaliation against someone who is sabotaging theirs.
Nonetheless, rationalism and politics are not always well acquainted. The geopolitical impact of the tariffs has been instant retaliation from China, threats of the same from the EU, and a consultation by the British Government of whether businesses here want us to follow suit.
Thus a heap of grit thrown by Trump into the gears of the American and global economy has already escalated into conflict between the big blocs. They are putting up walls – that most Trumpish of emblems – against one another, and their economies will become less vibrant and less competitive as a result.
That presents the UK with a choice. We can try to mimic these big beasts – “hitting back” by punching our own consumers and businesses with new tariffs, attempting to found the economy on domestic subsidies, and turning away from the opportunities that trade still offers. Or we can pivot to make the most of our size, specialisms and position.
Either we believe we too can be a big, lumbering galleon and go toe-to-toe, or we choose to be a smaller, nimbler privateer, seeking to outmanoeuver rather than outgun them.
Neither choice is certain, risk-free or easy. If securonomics was meant to promise steady, smooth sailing, it has been kyboshed by the arrival of stormy weather.
If, however, the Prime Minister believes that what matters is the outcome of policy, rather than its style, then those goals – good jobs, decent pay, controlling the cost of living, growth to sustain public services – can still be achieved, despite manmade economic headwinds.
Following the Trump/EU/China approach of intensified protectionism and inward-focused economics has never seemed wise to me, based on the experience of sluggish growth and missed opportunities it has delivered through human history. Even if it does appeal, then we must confront the fact that, indebted, under-productive and comparatively poor as we are, we cannot really afford even to try it.
That leaves the other option – to counter a world which is moving to be less ambitious, more navel-gazing, and less open, by positioning ourselves as a place which is the opposite. That means resisting protectionist urges, deregulating, setting taxation at a level which will attract and encourage investment, and re-establishing ourselves as a trade-friendly, innovation-friendly legal and business environment.
This would be far more affordable than the alternative – but what would be needed to pursue it is less cash than political gall. It would mean being willing to scoop up the likely surplus of goods which will no longer be able to get into the US, accepting them as an effective price-cut for our consumers, factories and businesses, but also navigating the temporary market distortions they could bring.
square IAN BIRRELL
Trump's tariffs mark the end of the most successful economic creed in history
Read MoreIt would also mean being willing to openly tout for EU businesses to relocate to the UK, on the basis that doing so would cut in half their tariff exposure when exporting to the US.
These aren’t unreasonable or immoral things to do. Why not stock up on cheap steel or grain if it isn’t going to the US any more? Why not compete with Ireland to be the new home of corporate HQs, as Ireland has so long (entirely reasonably) done with us?
The role of a swashbuckling privateer might not immediately spring to mind as one which Sir Keir Starmer was born to play. But he pitches himself as a pragmatist, above all things – and when circumstances change, pragmatists must adapt accordingly.
It already seems that the Government knows this is the route it should take. The very first response to Trump’s tariffs was to relax the planned fines for the manufacture of non-EV cars, albeit timidly, so they know that in these challenging times, the UK cannot afford to over-regulate. The head is getting there, but it’ll need heart to do the job properly.
Mark Wallace is Chief Executive of Total Politics Group
Read More Details
Finally We wish PressBee provided you with enough information of ( The UK can still outmaneuver Trump’s tariffs – and win )
Also on site :
- Hammerspace, an unstructured data wrangler used by Nvidia, Meta and Tesla, raises $100M at $500M+ valuation
- India’s exports reach record high
- Spirometry Predicts Pre-COPD State Regardless of Smoking