Prime Minister Sir Keir Starmer had barely taken his seat at the Liaison Committee when the questions about the UK’s reaction to Donald Trump’s tariffs began.
The panel is made up of the chairs of all the House of Commons committees and its subject matter ranges from domestic to foreign affairs and back again within minutes. Dame Meg Hillier, chair of the Treasury Select Committee and long-time Parliamentary accounts-hawk, was first up. She swooped in to see what sort of international response is planned to the biggest story in town.
Nearly a week since Trump stood up with his cardboard chart of tariffs, no world leader or institution has stepped up to lead a response to him. The trouble is there is no obvious candidate who can co-ordinate a wholesale reply to Trump. Canada’s Prime Minister Mark Carney, a former central banker, is probably best placed, but for the small matter of a general election in his country.
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Trump and Putin thrive on victimhood - it's time Starmer set some boundaries
Read MoreStarmer said he spent last weekend holed up at Chequers, ringing around allies and “exchanging notes” about how they are responding to the tariffs.
Of the string of phone conversations, the PM said he was “understanding how they were approaching the challenge but also having a broader discussion about how they’re likely to respond to this.” Carney topped his call list.
Carney steered Canada through the 2008-09 financial crisis and helped the UK deal with the fallout from Brexit as the Governor of the Bank of England. If he is returned as Canadian prime minister at the end of the month, Starmer can rely on a sensible ally to help decide whether to pacify Trump as a means of putting the brakes on a global recession, or to try to bring together an economic international coalition of the willing.
When former prime minister Gordon Brown, then chair of the G20 group of industrialised nations, co-ordinated the global response to the sub-prime crisis and run on the banks, he was using the post-war international architecture including arms of the American state such as the World Bank to help him. He also had the US on board.
Since 2009, the decline of those institutions has sped up; nowadays G7 and G20 meetings rarely come to a unified conclusion. Even during the Covid pandemic there was no joined-up international plan.
Since Trump was elected for a second time, all assumptions about the rules and organisations leaders have always taken for granted have fallen away entirely. Far from being on board to sort out this mess, Trump is its architect. The tariffs are not a “temporary passing phase” but part of a “changing world order,” Starmer said.
The key question is whether behind the scenes diplomacy can secure “sweetheart deals” or carve-outs for individual nations with the US. In which case, why sign up to a co-ordinated response? Worldwide politicians are recalibrating whether it’s every nation for itself and whether bilateral trade deals are the new normal.
By coincidence, Canada is the chair of the G7 summit in June. But with the US also a member and Italy’s Giorgia Meloni urging the European Union not to retaliate in kind to Trump’s tariffs, the chance of any joint communique is miniscule at best.
The UK, which alongside Israel, are being talked up as Trump’s two favourites, can hardly set itself up as a co-ordinating hub of the aggrieved with tariffs of “only” 10 per cent and 25 per cent on the export of cars, when other nations have suffered tariffs of nearly 50 per cent. Even with a warming relationship with the European Union, the UK can’t lead on tariffs, as Starmer has sought to do so on European defence leadership. A sped-up Free Trade Agreement between the US and UK may raise eyebrows in Brussels too.
Asked if the Government could intervene to prevent recession with similar to steps taken during the Covid pandemic, the Prime Minister emphasised ministers were prioritising support that was “more in the nature of breaking down barriers that are in the way” rather than spending cash. That applies to relations with other countries too. “We have to talk to other like-minded countries about lowering the barriers to trade between us,” Starmer said.
With Trump showing no sign of backing down, Starmer said he is keeping all “options on the table and do the preparatory work for retaliation, if necessary,” adding, “but I think that trying to negotiate an arrangement which mitigates the tariffs is better.”
If he can’t get that easing, Starmer may have to join a coalition of the aggrieved after all. But it seems unlikely he’ll be the one to lead it.
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