In the wake of Donald Trump’s US presidential victory and ongoing Brexit fallout, the UK finds itself at a pivotal juncture in redefining its place on the global stage. As Prime Minister Keir Starmer faces pressure to align with either Washington or Brussels in future trade negotiations, a leading economist suggests Britain can adeptly balance both relationships.
Navigating the Atlantic Divide
Andy Haldane, former chief economist at the Bank of England, believes the UK government is uniquely positioned to simultaneously pursue a free trade agreement with the US under a Trump presidency while also rebuilding strained ties with the European Union. This two-pronged approach, he argues, could cement Britain’s status as a “beacon of stability” amidst escalating worldwide volatility.
I hope the government is in a position to really pat its head and rub its tummy at the moment. Of course we should pursue energetically an improved deal with the EU… That should not, though, preclude seeking out a free trade arrangement with the US under a new Trump presidency.
– Andy Haldane, former Bank of England chief economist
Haldane emphasized that Brexit has uniquely positioned the UK to engage in parallel trade discussions that would have been “impossible” prior to leaving the EU. He expressed his desire to see the government “do something on both sides” of the Atlantic.
Contrasting Perspectives
However, not all experts share Haldane’s optimism. Some have cautioned that Trump’s return gives the UK added incentive to prioritize strengthening European bonds, warning of the steep demands Britain may face in US trade talks without EU leverage.
On Monday, Starmer himself signaled his European leanings, standing alongside French President Emmanuel Macron during the Armistice Day ceremony in a poignant display of unity. The gesture comes as global leaders brace for a resurgence of Trumpian “America First” trade policies that could see tariffs of up to 100% on select foreign goods.
Silver Linings for Britain
Despite the looming specter of a trade war redux, Haldane sees cause for optimism in the UK’s current position. He points to Britain’s “stable government” and investment-forward agenda under Prime Minister Starmer as key factors that could make the UK an attractive haven for businesses seeking reliability amidst uncertainty.
We could be a beneficiary of some of these uncertainties and fractures appearing elsewhere around the world.
– Andy Haldane
The economist praised the recent budget unveiled by Chancellor Rachel Reeves as “pro-business” in its commitment to shoring up infrastructure and public services – investments he deems critical to fostering a robust business environment, even if it means accepting some “extra taxes” in the short term.
Putting the East Midlands on the Map
Haldane, who also chairs the inclusive growth commission in the East Midlands region, sees Britain’s trade endeavors as an opportunity to spotlight areas that have long been overshadowed. He hopes to leverage the commission’s work developing localized economic strategies to attract domestic and foreign investment to the area.
There is huge potential here to do something quite big and bold, to tell a different story.
– Andy Haldane on the East Midlands
As the UK navigates the uncharted waters of a post-Brexit, post-COVID, and now post-US election world, striking the right balance in trade relationships could prove instrumental in securing its place as a stable global power. While challenges undoubtedly lie ahead, opportunities may also await those nations nimble enough to adapt to the shifting tides.
