A diplomacy tightrope for Britain’s Starmer after Trump’s tirades

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Mission

British diplomats have long prided themselves on the so-called “special relationship” with the United States.

The phrase was coined by Winston Churchill, Britain’s inspiring wartime leader, when he described in March 1946 how the “Iron Curtain” descended across Europe.

His speech It was delivered at Westminster College in Fulton, Missouri, home of then-US President Harry Truman, who was offered a copy in advance.

Warning of the threat the Soviet Union posed to democracy, Churchill said: “Neither the certain prevention of war, nor the continued rise of world organization, will be achieved without what I call the fraternal bond of the English-speaking peoples.

“This means a special relationship between the British Commonwealth, the Empire and the United States.”

Many other countries pride themselves on their special relations with the United States, including Israel and Canada, both of which have used the term in the past.

France is often described as America’s “oldest ally,” and former President Joe Biden used that phrase when in December 2022 he hosted French President Emmanuel Macron at the White House for the first state visit of his administration.

But there is no more formal “special relationship” than that between the United States and Britain, which relies on the close security and intelligence links forged during the Cold War, to the extent that the two countries have a nuclear cooperation agreement and a deeply integrated defense industrial complex.

Ironically, while countless US presidents have used the term, none have invoked it as much as President Donald Trump.

In September last year, the White House published a fact sheet titled “The Special Relationship” which declared: “The relationship between the US and the UK is unparalleled anywhere else in the world, and we will always be friends.”

It all left Prime Minister Keir Starmer walking a tightrope as he responded to Trump’s threat to impose more tariffs on eight European countries – including the UK – from next month unless they back his desire to buy Greenland.

In contrast to French President Emmanuel Macron, who has urged the EU to deploy an “anti-coercion instrument” against the United States – something that seems unthinkable but nonetheless reflects the position in which the bloc finds itself – Starmer has indicated that he does not favor retaliatory tariffs if Trump goes ahead with his proposed tariffs, insisting that “a tariff war is in no one’s interest.”

While making clear that “any decision on the future status of Greenland rests solely with the people of Greenland and Denmark”, Starmer was also keen in his speech on Monday to stress the benefits of the close partnership between Britain and the US and the values ​​the two countries share.

Starmer added: “We must remember at all times that it is in our national interest to continue to work with the Americans when it comes to defence, security and intelligence.”

It was a skillful act of diplomacy even if it would heighten the perception among critics at home that Kiir was “never here” to devote more time to foreign affairs than domestic affairs.

He was also bold. Many in Starmer’s Labor Party would like the Prime Minister to take a tougher, Macron-like stance against Trump. And so do many British people.

As actress Vanessa Williams sang the US national anthem Sunday night at London’s O2 Arena, before an NBA game between the Memphis Grizzlies and Orlando Magic, a crowd that could be considered well-disposed towards American culture applauded the man who shouted “Leave Greenland alone.”

Skeptics also include some in the Foreign Office (the British equivalent of the US State Department) who strongly dislike the way Starmer has cajoled Trump, for example, by inviting him for an unprecedented second country visit.

However, most people in the department recognize the value of Starmer maintaining a close relationship with someone who, although extraordinarily unpredictable, will at least pick up the phone and talk to him.

However, this argument is in danger of being tested to the test following Trump’s social media posts early yesterday, in which he accused Britain of committing an “act of extreme stupidity and utter weakness” in ceding the Chagos Islands (an archipelago in the Indian Ocean that has been a British territory since 1814) to Mauritius. This was despite Trump himself saying that, when the announcement was made in February last year, he had “a feeling it was going to go very well”.

The relationship between the two men will also be tested after Britain yesterday agreed to establish a new “mega-Chinese embassy” on the outskirts of the City of London despite concerns from the White House about the site’s proximity to nearby sensitive data cables linking the financial services industry in the Square Mile.

Limited options

However, Starmer’s approach can also be seen as very pragmatic because he realised, given the difference in size between the two economies, that Britain – which lies outside the EU’s single market – is unable to do much damage to the US through tariffs.

Indeed, with the UK’s total exports of goods to the US in 2024 reaching $68.2 billion, it has a lot to lose.

This applies especially to Britain’s beloved automobile industryIt sold 10 billion pounds ($13.4 billion) worth of goods to the United States in the 12 months to the end of June last year, making it the largest single British exporter excluding the pharmaceutical industry, which is currently duty-free after tariffs were imposed. The deal concluded last month.

This agreement was hailed as a major success at the time, not least because of the way it opened up potential investment in the UK by US pharmaceutical companies such as Bristol Myers SquibbBut the extent to which Greenland-related tariffs are feasible remains unclear.

Opinions differ on whether new tariffs – moreover The 10% mark has already been applied to goods in the UK – Could push the UK into recession. Advisory firm Capital Economics believes that these measures will cut between 0.3% and 0.75% of the UK’s GDP, which, if implemented quickly, could lead to a recession.

But others disagree. “A flat 10% tax on nearly £60bn of goods is not big enough to alter the broad growth forecast for 2026,” Simon French, chief economist and head of research at investment bank Panmure Liberum, said on Twitter.

He noted that “the most logical strategic response from Europe” would be capital account retaliation.

European NATO countries hold $2.8 trillion worth of US Treasuries, including $889 billion in the UK alone. If Trump goes ahead with this latest threat, beware of a possible revival.”“Anything but trade with America.” He was seen after Liberation Day on April 2 last year.

The markets are already giving a glimpse of that.

Danish Pensions Operator AkademikerPension He said Selling $100 million in US Treasury bonds. Anders Schild, the fund’s chief investment officer, said the reason for this was “the poor”. [U.S.] “Fiscal governance” – but tensions with the US “did not make the decision more difficult.”

Meanwhile, Investors fled US assets on TuesdayStocks, bonds and the dollar were sold and turned into safe haven investments such as gold and silver.

If Europe continues to flee American capital, this will certainly be more effective than self-harming retaliatory tariffs.

Top TV picks on CNBC

Chris Southworth, Secretary General of the UK International Chamber of Commerce, is urging European countries to focus on diplomacy, as President Trump threatens to impose additional tariffs on Greenland.

Danish foreign policy expert Sten Renning has warned that Europe should be prepared for a trade war with the US over Greenland.

Jane Foley, Head of FX Strategy at Rabobank, discusses the latest UK GDP numbers for November, which were better than expected.

– Holly Eliatt

Need to know

Trump launches a tirade against the United Kingdom. So called “special relationship” Relations between the US and the UK remained tense on Tuesday after Trump posted a tirade against London’s decision Handing over sovereignty over the Chagos Islands to Mauritius.

The UK is looking to work its magic on Trump to defuse the Greenland tariff threat. At a press conference on Monday, Starmer said Britain highly valued its long-standing special relationship with the United States, but that Only Greenland and Denmark can determine the island’s future.

Is the UK likely to ban social media for under-16s? Australia’s social media ban on children under 16 has captured global attention, and governments around the world are considering implementing similar policies, with The UK is seen as likely to be next.

– Holly Eliatt

Quote of the week

In the markets

British stocks fell over the past week, as Trump intensified his rhetoric against European countries over their resistance to his stated goal of annexing Greenland to the United States.

the FTSE 100 index It fell 0.67% to 10,126.78 on Tuesday, down from 10,137.35 a week ago.

Meanwhile, jobs data from the Office for National Statistics showed that unemployment remained steady at 5.1% in the three-month period to the end of November, and the pound rebounded against the US dollar. After falling earlier in the week, the pound reached $1.3435 against the dollar on Tuesday, compared to $1.3418 last Wednesday.

Elsewhere, yields on Britain’s benchmark 10-year government bond – also known as… gilts – It rose to 4.464% on Tuesday, compared to 4.359% last Wednesday.

-Hugh Lisk

Coming

January 21: UK inflation rate for December
January 22: January retail sales
January 23: GfK Consumer Confidence for January

– Holly Eliatt