Chamber UK Weekend Read:
Miles Bennington
Director, Chamber UKBe under no illusion, a conflict between Europe, the wider forces of democracy and Donald Trump is coming! The good news is, there’s a good chance we will win it…
This week, Emmanual Macron, Sir Keir Starmer and Volodymyr Zelenskyy have all dutifully trooped to Washington to pay homage to Donald Trump. The US President remains the most powerful man on earth and on the issue of the Ukraine War, he has some potent cards to play.
American weaponry has been essential in turning Russia’s three day special operation into a three year meat grinder that has chewed through the Soviet inheritance of military hardware that has threatened Europe for so long. The war has left the Russians fighting with what their relatively small economy can build.
The US is also the centre of the Western security alliance, indispensable (perhaps?) in intelligence, command and control, air defence and logistics. There is no doubt that if the Americans take their ball and go home, it will be a body blow to European security.
So, it is good and right that our leaders are acting responsibly and taking every opportunity to sooth the orange toddler.
The Bust Up
This soothing however must be part of a strategy. However, Europe and Ukraine need time to ramp up their armaments production, time to plan for an American free Europe and time to agree with each other where the red lines are and what their responses will be. Because Trump will test them.
Whether it’s new tariffs, withdrawing troops, bullying smaller countries or reneging on security guarantees, Trump will continue to test America’s democratic allies, they will squirm and prevaricate and kowtow right up until the moment they don’t. At that point, they must act as one and at that point Trump will enter the “find out” phase.
The Matchup
Notwithstanding the prospect of a UK-US trade agreement, when the bust up comes, it will be fought on two fronts: a trade war with the US and ongoing fighting in Ukraine. In each case the allies must make it clear they are not the aggressor (hence playing nice at the White House) and must make it clear that their resolve is unshakable.
He may not feel it, but Trump is supremely vulnerable on trade and the economy. Not because the US is weak, it is the hub of the global economy, the reserve currency and strong in almost every area of manufacturing and services, but because of the politics. Trump is clearly the actor breaking with the status quo, when a bust up comes, it will be clear to Americans who precipitated it and therefore who is to blame if it hurts. The EU is a massive economy. It has the power to respond to American tariffs and even better, it can produce regulation that will severely limit American economic power on the continent. The US is an enormous beneficiary of IP law and free trade regulation. With democracy crumbling around us and Trump surrounding himself with social media oligarchs with hugely profitable business models…perhaps now is time to consider some internet regulation.
In Ukraine, the situation is dire. Thousands of people are dying and any loss of American support will hurt the war effort, particularly in the areas of air defence and intelligence. However, again, Europe did not precipitate this war. Victory for Ukraine does not require that he parks a Ukrainian tank on Red Square. All we have to do is hold the line and make it clear to Putin that victory is unachievable. It’s one thing to throw 1000s of Russian lives over the line in anticipation of victory. It’s quite another to do so in anticipation of forever war. So, as long as Europe can supply enough armament to Ukraine to secure a stalemate, which should be possible given that the EU economy alone is ten times the size of Russia’s, then there is no reason to despair in Ukraine.
The Upside
Trump and Putin gain power by getting inside our decision loop. They are dictators and bullies and that allows them to act without consultation or delay. Trump makes an announcement and before Europe has even convened a committee to discuss a response, he is on to the next thing.
It makes us look powerless. It makes us look weak. But the truth is we are not, indeed our respectful, democratic, consultative approach attracts friends and builds resolve. There are more of us than there are of them, and when we make a decision, it will stick. Bullies often look powerful just before they get a smack in the nose.
So look to 2026 with hope. You may find that a united Europe, Canada and democratic alliance has hit back at the American bully causing economic pain that Trump facing midterms can ill afford. Popping the balloon of Trump’s popularity will stiffen the resolve of his rivals at home, and lawless apparatchiks currently riding rough shot over the US Government will have to consider that there may be consequences for their actions.
In Ukraine, we may see the Russian assault easing as Putin runs out of money and recruits. Having seen off the darkest moments, and from receiving a steadily increasing stream of European armament, Zelensky and Ukraine might start contemplating an offensive again or may simply hunker down and wait for Putin to fall.
The Opportunity
Where does this leave the UK? Deeply committed to Ukraine, deeply entwined with the US and right at the end of our fiscal tether, Sir Keir is in an unenviable situation. Again though, being on the backfoot can be an advantage.
When the dam breaks, no one will hold Sir Keir responsible, which gives him options. If a trade war breaks out, especially if the UK is not targeted, the PM will have to carefully steer Britain through a new trade deal with the US, or FDR-like towards the European side. Once the battle is joined, Sir Keir can let himself out of his self-imposed pledges to not raise tax limits and direct some fiscal firepower at the problem. It will be economically painful but as this week’s visit to the White House showed, Sir Keir was happy to play ball, Trump is the aggressor.
This could also be a good opportunity to rejoin Europe. Labour are wary of “betraying” red-wall voters who voted for leave but as support for Brexit ebbs and conflict with the US reaches the peak, support for integration can be recast as patriotic, which would open many doors.
A customs union could make sense in a trade war. Security co-operation and a nuclear policy to minimise the risk of nuclear proliferation on the continent could seem in order. With closer ties and a new external threat, who knows what the future of UK-EU relations could be!
The Victory
So it’s good that Europe’s leaders are playing ball with Trump. It’s good that they show every courtesy and give him every opportunity to co-operation. But they must prepare for the break. They must prepare to win the conflict to come.