Thoughts on the Trump presidency

[Magdalia]

Which is why any meaningful return to normality is unlikely this side of the next US elections.

precisely which why we have to take the opportunity to move closer to Europe not get back into Europe just ensure we can trade on more straightforward terms under an EEA arrangement

The UK is in a very different position to the EU, their interests are not in alignment. There is a significant risk that the consequence of the UK aligning with the EEA would be the US aligning the UK tariff with that of the EU.

Be careful what you wish for.

 

[edwin_m]

The UK is in a very different position to the EU, their interests are not in alignment. There is a significant risk that the consequence of the UK aligning with the EEA would be the US aligning the UK tariff with that of the EU.

Be careful what you wish for.

But it's arguable that the benefits of closer integration with the EU will outweigh any disbenefits of a higher tariff on exports to the US. Particularly as the EEA trade regime is stable and predicable, but we have no idea whether exports of the UK will get the 20% tariff anyway, will be exempted completely from tariffs, or something else entirely, on a daily basis until at least January 2029.

 

[Gloster]

The UK is in a very different position to the EU, their interests are not in alignment. There is a significant risk that the consequence of the UK aligning with the EEA would be the US aligning the UK tariff with that of the EU.

Be careful what you wish for.

In the none too distant future we will have to make a choice: continue agreeing with the USA or say No and try to align with the EU. Whatever we do there will be some who don’t like it and there will some who will criticise anyway. (Mailygraph: ‘Starmer’s cowardly slap in the face to our greatest ally’ v. ‘Starmer cravenly gives away British rights.’)

My opinion is that if we continue to fall over backwards to appease the USA, they will just continue to take a lot and give as little as possible until they demand something that is just too much of an infringement of our sovereignty. Reorganise out tax system to favour American gas guzzlers? Change the laws on free speech to give preferential treatment to fundamentalist Christian groups? Then they will walk away and leave us deep in the proverbial, desperately trying to make up the distance with the EU, who will have every right to be suspicious of us (France, at least, but that is normal with their attitude to Anglo-American relations).

The alternative is a rapprochement with the EU immediately and accept that it might result in a slightly worse short-term situation. This is not going to be popular with some politicians (did anyone say Reeves), but is likely to be far better in the long-term.

I do think that we need to think long-term as the damage done by Trump will take years, probably decades, to recover from. And, of course, he is quite possibly going to appear as tactful and rational compared to Vance, who seems to have a particular dislike of the UK.

 

[75A]

He's doing what he's there to do. Make America great again.
It's not the puny Europeans he needs to look over his shoulder for, it's the Chinese.

 

[SteveM70]

He's doing what he's there to do. Make America great again.
It's not the puny Europeans he needs to look over his shoulder for, it's the Chinese.

But he won't

Businesses make investment decisions considering time periods far longer than the duration of the current presidency.

Businesses crave stability and certainty

He absolutely ISN'T giving businesses - American or otherwise - what they want

 

[jon0844]

But it's arguable that the benefits of closer integration with the EU will outweigh any disbenefits of a higher tariff on exports to the US. Particularly as the EEA trade regime is stable and predicable, but we have no idea whether exports of the UK will get the 20% tariff anyway, will be exempted completely from tariffs, or something else entirely, on a daily basis until at least January 2029.

I'd rather us work closer with the EU, Canada, Australia, New Zealand, Japan, South Korea and even China than the USA. What exactly do they make that we want or need?

When it comes to tech, most if not all of the firms have bases in Europe and they can get in line or we find other firms to take over.

Going out on a limb with Trump won't end well. He will have the upper hand and one we have played the state visit with King Charles card then we lose all leverage.

Trump won't live forever and the GOP may end up out of power for a long time, so then we'll have some power again - especially as part of a bigger pact.

If on the other hand Trump goes full dictator and tears up the constitution then we definitely don't want to be associated with it.

 

[Nicholas Lewis]

The UK is in a very different position to the EU, their interests are not in alignment. There is a significant risk that the consequence of the UK aligning with the EEA would be the US aligning the UK tariff with that of the EU.

Be careful what you wish for.

US 15% of our trade EU 40% - whose going to give us best growth opportunity as this is all that matters to the UK well that's what Labour repeat parrot fashion? So if we come into line with the EU (which we largely are already) we can enter the EEA. With the US they've now gone anti foreigner so going to be a lot harder to sell in. Already Jaguar have suspended exports to US for the short term (I suspect that's because they've been anticipating this so have shifted plenty of stock into US in advance of tariffs so need to control inventory) but the risks are now there.

 

[JamesT]

US 15% of our trade EU 40% - whose going to give us best growth opportunity as this is all that matters to the UK well that's what Labour repeat parrot fashion? So if we come into line with the EU (which we largely are already) we can enter the EEA. With the US they've now gone anti foreigner so going to be a lot harder to sell in. Already Jaguar have suspended exports to US for the short term (I suspect that's because they've been anticipating this so have shifted plenty of stock into US in advance of tariffs so need to control inventory) but the risks are now there.

Europe has had the slowest growth of any continent for several years. The opportunities are elsewhere in the world.
You’d have to ask the Norwegians again, but the message in the past was that the UK was not welcome to join the EEA. We already have a tariff-free deal with the EU, is fixing our tariffs with other countries to the same as theirs going to magically kickstart the economy?

 

[brad465]

Europe has had the slowest growth of any continent for several years. The opportunities are elsewhere in the world.

That certainly was and is currently the case, but Trump has almost certainly changed that going forward. Recession probability has rocketed, especially in the US, and all these tariffs are not growth enablers. Europe in the short term will by all probability suffer from the Trump tariffs, but as it pivots away from the US, especially driven by Germany's recent drive for investment, I can see Europe faring much better, especially if it also attracts some of the potential exodus of economic stuff (workers, business investment, etc.) from the US.

I can see the UK joining the Pan-European Mediterranean convention (which has north-African countries in it) relatively quickly, but joining any of the EEA, Single Market, Customs Union or fully re-joining the EU properly are a long way off.

 

[Magdalia]

He's doing what he's there to do. Make America great again.

Don't lose sight of that!

The economic strategy part of that is to bring manufacturing back to the USA, and tariffs are the main tool.

In the none too distant future we will have to make a choice: continue agreeing with the USA or say No and try to align with the EU.

It isn't a binary choice. The UK has to be very careful not to get into a position where it has to make a binary choice, because either would be very detrimental to the UK economy.

US 15% of our trade EU 40%

Which means there is more potential to grow trade with the US than there is to grow trade with Europe, because the latter is already high.

What exactly do they make that we want or need?

In many of the sectors where the UK has most potential for success and growth, relations with the US are more important than relations with Europe. Here in the Fens, probably the fastest growing region in the UK, the life science and tech industries are working much more closely with the US than Europe. Similarly, our cultural industries are much more closely aligned with the US, because of the common language.

But he won't

Businesses make investment decisions considering time periods far longer than the duration of the current presidency.

Businesses crave stability and certainty

He absolutely ISN'T giving businesses - American or otherwise - what they want

The UK has the opportunity to offer that for US businesses.

 

[najaB]

Which means there is more potential to grow trade with the US than there is to grow trade with Europe, because the latter is already high.

That logic is... interesting.

Similarly, our cultural industries are much more closely aligned with the US, because of the common language.

I deal with both Europeans and Americans at work. To be honest, a lot of the Europeans have better English than the Americans!

 

[jon0844]

Many large businesses in Europe choose to use English within their office buildings, calls, emails etc.

 

[OhNoAPacer]

Which means there is more potential to grow trade with the US than there is to grow trade with Europe, because the latter is already

But in Trumps world if you grow trade and create a trade deficit for the US he will up your tariff using the nonsensical formula.

 

[Magdalia]

But in Trumps world if you grow trade and create a trade deficit for the US he will up your tariff using the nonsensical formula.

A good, mutually beneficial, trade in goods agreement increases exports and growth on both sides, leaves the balance roughly where it is now, and does not increase the tariff.

But the real opportunities, and risks, are in trade in services. Trump is much less worried about big tech doing research and development in Cambridge and Oxford than he is about Nike making shoes in Vietnam or Apple making phones in India, and the UK needs to keep it that way.

 

[AndrewE]

A good, mutually beneficial, trade in goods agreement increases exports and growth on both sides, leaves the balance roughly where it is now, and does not increase the tariff.

But the real opportunities, and risks, are in trade in services. Trump is much less worried about big tech doing research and development in Cambridge and Oxford than he is about Nike making shoes in Vietnam or Apple making phones in India, and the UK needs to keep it that way.

Actually what he is conspicuously ignoring is services and other money transferred, e.g. for ""intellectual property" rights. If there was a massive "trade" imbalance then currencies would be at very different levels against each other compared to where they are (were) now.
They are where they were (and were relatively stable) because the trade "imbalances" are balanced out by cash flowing from the rest of the world to the USA.

In his new world "trade" will balance and on top of that the USA will continue to suck billions out of the rest of the world on lots of other pretexts. Except (I hope) it won't turn out like that.

 

[iwasyoungonce]

Great speech by Mark Carney showing the rest of the world how to stand up to a bully Trump

 

[Nicholas Lewis]

Which means there is more potential to grow trade with the US than there is to grow trade with Europe, because the latter is already high.

Trump is making it clear that he doesn't want to do more trade with the rest of the world but I suspect we will get some sort of deal as long as we cave in over agricultural standards and dial back the online safety requirements which they will do as all politicians in this country are obsessed with this so called special arrangement which has always been one sided.

 

[jon0844]

I would prefer we told Donald where to stick his trade tariffs. We should not allow ourselves to be bullied, nor convinced to go against an alliance with Europe and the rest of the world by parties that have similar aims as the GOP - such as Reform UK.

 

[JamesT]

I would prefer we told Donald where to stick his trade tariffs. We should not allow ourselves to be bullied, nor convinced to go against an alliance with Europe and the rest of the world by parties that have similar aims as the GOP - such as Reform UK.

How do you propose we actually do that? You can make all the speeches you like, but Trump’s tariffs are on imports, so it’s up to them what they do. Or should we start trying to smuggle Land Rovers into the US?
As far as I can tell, Reform sit rather more on the free trade side of the argument, reducing tariffs by doing trade deals is their bag. If you want a party that wants to protect UK industries by putting up barriers to trade, the Green Party would be more like it.

 

[Nicholas Lewis]

I would prefer we told Donald where to stick his trade tariffs. We should not allow ourselves to be bullied, nor convinced to go against an alliance with Europe and the rest of the world by parties that have similar aims as the GOP - such as Reform UK.

We've been imposing tariffs on US goods for years whilst they have had minimal tariffs on UK products so this moves towards equilibrium so we are hardly being bullied. Plenty of other countries may feel more aggrieved of course but an all out trade war will just make matters worse.

 

[DoubleLemon]

He's doing what he's there to do. Make America great again.
It's not the puny Europeans he needs to look over his shoulder for, it's the Chinese.

I take it from that bout of bollox with no basis in fact that you are from the USA and there is literally nothing that comes close to the US for every single thing you can think of?

 

[Annetts key]

How do you propose we actually do that?

Well, here’s some ideas. Tax U.S.A. citizens that own golf courses or other property in the U.K.
Tax U.S.A. companies for providing services, e.g. Amazon, Google, Meta, X etc.
Tax U.S.A. banks and other financial companies for providing banking, credit, inc. debit or credit cards.

Especially include some high profile goods or services, for example X and Tesla Cars. If Trump can make up arbitrary rates, so can we. So, say, VAT at 75% for any Tesla Cars. And say, £10,000 per day (doesn’t matter if the service is available or not) for X. So £3,650,000 per year. Which doubles if not paid within 14 days, and then doubles again for each further 7 days until paid in full.

 

[125Spotter]

And say, £10,000 per day (doesn’t matter if the service is available or not) for X. So £3,650,000 per year. Which doubles if not paid within 14 days, and then doubles again for each further 7 days until paid in full.

Wasn't there a country that tried this with a tech company, maybe Google and Russia? I seem to recall a ludicrous fine being levied – it will never be paid, but acts as a symbolic representation of the imposing country's disdain and a brake on the firm re-entering the market in question in earnest.

 

[Purple Train]

Wasn't there a country that tried this with a tech company, maybe Google and Russia? I seem to recall a ludicrous fine being levied – it will never be paid, but acts as a symbolic representation of the imposing country's disdain and a brake on the firm re-entering the market in question in earnest.

Indeed, and there was a fine of two undecillion roubles, which at current exchange rates is probably about £5.25.BBC article here.

A Russian court has fined Google two undecillion roubles - a two followed by 36 zeroes - for restricting Russian state media channels on YouTube.
In dollar terms that means the tech giant has been told to pay $20,000,000,000,000,000,000,000,000,000,000,000.
Despite being one of the world's wealthiest companies, that is considerably more than the $2 trillion Google is worth.
In fact, it is far greater than the world’s total GDP, which is estimated by the International Monetary Fund to be $110 trillion.
The fine has reached such a gargantuan level because - as state news agency Tass has highlighted, external - it is rapidly increasing all the time.
According to Tass, Kremlin spokesman Dmitry Peskov admitted he "cannot even pronounce this number" but urged "Google management to pay attention".
The company has not commented publicly or responded to a BBC request for a statement.

I'm not sure using similar tactics is a good idea - it'll just produce the typical classroom response of "what are you going to do about it then?" and hence have no real effect whatsoever, apart from making Britain look a bit silly.

 

[The Ham]

Which means there is more potential to grow trade with the US than there is to grow trade with Europe, because the latter is already high.

Not necessarily, the largest value of UK exports to the US is cars (£9bn) which have a flat rate of 25% wherever they're from, so it's unlikely we'll get much opportunity to create growth there.

The list then starts to drop away fairly quickly:
Cars: £9.0 billion
Medicinal & pharmaceutical products: £6.5 billion
Mechanical power generators (intermediate): £4.6 billion
Scientific instruments (capital): £2.4 billion
Aircraft: £2.2 billion

Those 5 things account for nearly 43% of all (goods) exports from the UK to the US.

For services the numbers are:

Other Business Services £52.3 billion 42.1% a decrease of 0.9%
Financial £27.8 billion 22.3% an increase of 6.6%
Insurance and Pension £11.0 billion 8.8% unchanged
Telecommunications, computer
and information services £10.3 billion 8.3% an increase of 7.2%
Travel £8.2 billion 6.6% an increase of 7.5%

Which accounts for 88% of all (services) exports.

To account for (say) a 25% drop in UK car sales to the US IT would have to grow by about 18%, that's doable, but probably over a longer timeframe than one year.

There's also the question of how much of that trade is actually worth other north American countries. For example if a car is sold in a US showroom to a Canadian where does that sit in terms of trade?

Whilst I suspect the values aren't that high, with Canadians boycotting the US (including refusing to travel there) we may see some of falls in exports to the US be taken up by increases in exports to Canada and Mexico.

With the Canadians selling up property in the US, not travelling to the US and not buying US products (both at a personal and government level), there's a fair chance just from the impact of the Canadians that the US will struggle to see growth this year.

That's before you consider than many EU nations are now looking at what defence spending can be undertaken "locally".

There was already concerns around Boeing (with regards to safety), so that's not going to be helping either.

With US consumers being taxed if they buy non US products (as that's effectively what the tariffs are) their spending power is going to be weaker, so they're going to be looking to tighten their belts - especially those who work for government who are looking over their shoulder grading that they may no longer have a job next week.

Personally, I'm not sure that there's much how for growth in experts (of whatever variety) to the US unless we get the same tariff rate as Russian imports (which is no extra on their $3bn whilst places like Ukraine got 10% on their $1.2bn, and in not sure how much the penguins export but likely a lot less than $3bn).

 

[edwin_m]

As far as I can tell, Reform sit rather more on the free trade side of the argument, reducing tariffs by doing trade deals is their bag. If you want a party that wants to protect UK industries by putting up barriers to trade, the Green Party would be more like it.

Reform are in a bind given that Farage's inclination is to support Trump and Putin, but that isn't a position that will win him many votes beyond his current base. I guess if he got the chance he'd sell out the NHS, British farmers and food standards for an unfettered trade deal that would heavily favour the US.

We've been imposing tariffs on US goods for years whilst they have had minimal tariffs on UK products so this moves towards equilibrium so we are hardly being bullied.

At a rate far less than the 10% now being levied the other way. And we currently have deficit in goods with the USA, so a move towards equilibrium (in the way Trump defines it) would favour the UK!

 

[sor]

This is something that could go in either thread but as it is a "DOGE" announcement it probably fits better here than in the Musk spiv one:

https://xcancel.com/DOGE/status/1908261360565194834 (xcancel is a version that gets around the register-wall)

The @USGSA IT team just saved $1M per year by converting 14,000 magnetic tapes (70 yr old technology for information storage) to permanent modern digital records.

I would wonder what they actually did with the data, and how it will come back to bite them when their new arrangement turns out to cost more than they thought. The ultimate in hilarity if they moved it "to the cloud" only for their provider to put it back on tape! It seems like a classic example of tech-bro shortsightedness.

It says a lot that the dweebs who run the account consider it "70 year old technology" - according to that logic, so are hard drives, and of course both technologies have received continuous R&D. The latest version of the LTO format was released in 2021 and can hold its own against hard drive capacities.

 

[DustyBin]

Reform are in a bind given that Farage's inclination is to support Trump and Putin, but that isn't a position that will win him many votes beyond his current base. I guess if he got the chance he'd sell out the NHS, British farmers and food standards for an unfettered trade deal that would heavily favour the US.

I don’t believe Farage is supportive of Putin. The pro-Putin narrative seems to be based on a comment made in 2014 in which Farage acknowledged Putin as a shrewd but unpleasant operator (I’m paraphrasing but that’s what it amounted to), which is (or was!) surely a reasonably assessment? He’s recently criticised Trump’s proposed peace deal as being overly favourable to Putin as well.

I realise Farage is the devil incarnate to many on this forum, but I don’t think he’s particularly out of step with the majority on this issue.

 

[Harpo]

Reform are in a bind given that Farage's inclination is to support Trump and Putin………… I guess if he got the chance he'd sell out the NHS

Farage often repeats that he wants to see ’health services free at the point of delivery’.

In his usual slippery way the words Farage doesn’t use are National (as in NHS) or Insurance, as in private policies.

Plenty of scope for US investors in the Farage world.

 

[Magdalia]

Not necessarily, the largest value of UK exports to the US is cars (£9bn) which have a flat rate of 25% wherever they're from, so it's unlikely we'll get much opportunity to create growth there.

The list then starts to drop away fairly quickly:
Cars: £9.0 billion
Medicinal & pharmaceutical products: £6.5 billion
Mechanical power generators (intermediate): £4.6 billion
Scientific instruments (capital): £2.4 billion
Aircraft: £2.2 billion

The point about potential growth EUvUS also applies to different sectors within the US exports, the biggest potential for growth is in sectors not in this list.

But, because these are the biggest now, there are big risks for trade in those sectors.

With US consumers being taxed if they buy non US products (as that's effectively what the tariffs are) their spending power is going to be weaker, so they're going to be looking to tighten their belts - especially those who work for government who are looking over their shoulder grading that they may no longer have a job next week.

You are right that this is the big "first round" macro impact of the tariffs. However, the US consumers buying Rolls Royces and Aston Martins are not going to be amongst those tightening their belts.

There's also the question of how much of that trade is actually worth other north American countries. For example if a car is sold in a US showroom to a Canadian where does that sit in terms of trade?

I don't know the answer, but this is something where supply chains should be able to adjust.

Pharma is the trickiest area because the US is about half of the global market and the UK has the NHS as a near monopoly consumer. In the US drugs are going to get more expensive, in the UK it might mean the NHS not being able to afford to buy more of the most expensive drugs.