Michael Murphy: U.S.-U.K. trade deal offers little substance
LONDON — As America signed its first trade deal since threatening to rip up the postwar economic order, I was reminded of Shakespeare's famous line: 'All the world's a stage.' Rarely has global trade felt more theatrical.
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The announcement was made live on television, with the screen split between officials in their respective countries. On one side sat British Prime Minister Keir Starmer, hunched with advisers in London's blandest, most claustrophobic conference room. It looked like a space launch: boffins squinting at screens, willing the mission into orbit.
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On the other side sat U.S. President Donald Trump, in the leather-upholstered throne of the Oval Office, unmistakably leading the performance. The U.S. president hailed the deal as 'comprehensive' and 'historic.' Announced on the 80th anniversary of Victory in Europe Day, it was a symbolically loaded assurance that the United Kingdom remains, in Trump's words, 'truly one of our great allies.'
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These were welcome words, no doubt, just weeks after the United States seemed ready to declare economic war on the world. Perhaps the fallout from Trump's so-called Liberation Day, with U.S. economic growth dipping in the first quarter of this year, prompted the president to expedite the U.K. deal to lift the mood at home.
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Free-market Conservatives were quick to hail the deal as a 'win for Brexit.' It would not have been possible , after all, to skip to the front of the queue in bilateral trade talks had Britain still been inside the European common market.
It was another reminder that Trump's America is nothing like former president Barack Obama's, who once warned Britain it would be 'at the back of the queue' if it left the European Union. America's preference to deal with Europe as one entity had its day, but has now been eclipsed by Trump's Euroscepticism.
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He underlined the point himself. 'That was always a big part of your decision on Brexit, they were never able to make that deal,' he told Starmer, a staunch Remainer.
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In any case, the substance of the agreement was far thinner than either leader let on. Most tariffs, including the 10 per cent global baseline, stayed in place. For those hoping for a return to free trade, the olive branch looked more like a birch switch — one Trump shows no sign of putting down.
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Britain's economic outlook remains far gloomier than it was just two months ago, with the deal offering only minor relief on tariffs overall. British car manufacturers received some relief, with the tariff on the first 100,000 vehicles cut to 10 per cent from the 25 per cent rate initially touted; and levies on steel and aluminum were reduced to zero.
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This is positive for Britain, and may provide, as ambassador Peter Mandelson optimistically put it, a 'springboard' for future concessions. But ultimately, it is thin gruel: as Sam Ashworth-Hayes wrote in the Telegraph, 'The net effect is that between lower export volumes and lower prices, we'll still likely be £9.5 billion worse off than we were before.'
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