US election 2024: How will Donald Trump’s return impact the UK’s global future?

Approximate read time: 10 minutes

Following Donald Trump’s election victory, Prime Minister Keir Starmer and Conservative leader Kemi Badenoch sent their congratulations and said they looked forward to working with him, emphasising shared goals.^[1] However, Liberal Democrat leader Ed Davey said it was a “dark day” and called Mr Trump “a dangerous, destructive demagogue”.^[2] Commentators have been considering how the UK and US will work together during a second Trump administration.

1. Impact of US tariffs on the UK economy

In the run-up to the election, Mr Trump promised to implement 10 to 20% tariffs on all goods coming into the US, rising to 60% for goods from China.^[3] Professor Jonathan Portes, professor of economics and public policy at King’s College London, said that the planned tariff increase would be “a severe shock to the global economy, including the UK”.^[4]

The National Institute of Economic and Social Research (NIESR) has assessed that in the UK, the measures would result in halved growth, rising inflation and higher interest rates.^[5] NIESR said that the level of impact depends on whether affected countries introduce retaliatory tariffs.

Speaking to the Financial Times, Liam Byrne, Labour MP and chair of the Commons Business and Trade Committee, described the proposed tariffs being imposed on the UK as a “doomsday scenario”.^[6] Mr Byrne argued that the government should seek an exemption from US tariffs by offering to tighten up its inward investment screening programme and introduce tougher export controls.

Some analysts are less concerned, highlighting that a relatively low proportion of UK goods exports overall go to the US.^[7] Michael Saunders of Oxford Economics said the UK is not “in the front line of countries” that would be impacted. However, the IMF cautions that any trade war between the US and large EU exporters such as Germany would have knock-on effects for the UK economy.

Chancellor Rachel Reeves has said the UK will be making “strong representations” to the Trump administration, making the case for free trade.^[8]

Immediately after the win, Ed Davey said that fixing the UK’s “broken relationship with the EU is even more urgent than before”. With the EU constituting the UK’s largest trading partner, he argued that the UK should “strengthen trade and defence cooperation across Europe to help protect ourselves from the damage Trump will do”.^[9] In her Mansion House speech on 14 November 2024, Rachel Reeves said that the UK must “reset our relationship” with Europe, recognising that our markets are “highly inter-connected”.^[10]

Speaking to the House of Lords International Agreements Committee in November, the business secretary, Jonathan Reynolds, was asked about the UK government’s view of Trump’s potential trade policies.^[11] Mr Reynolds said that in terms of any consequences for the relationship between the UK and the EU, “clearly, if there are things that we are offered or asked to do that would result in an adverse relationship on the European side, we would have to weigh the consequences of that”.

2. Impact on the UK’s international relations

Speaking about international affairs at the Lord Mayor’s banquet on 2 December 2024, Prime Minister Keir Starmer said that the idea “that we must choose between our allies” is “plain wrong”. He said that the national interest “demands” that the UK work with both Europe and the US, including on security.^[12]

2.1 NATO and security cooperation

The US and UK have worked closely on security, sharing intelligence through the Five Eyes network. The two countries also have agreements to share research on quantum technologies and engineering biology, as well as testing the safety of artificial intelligence. However, the Institute for Government has commented on Mr Trump’s potential reluctance to engage with partners on international security and defence, including through NATO.^[13]

During the campaign, Mr Trump repeated concerns that other countries were not paying what they should be into NATO.^[14] In a February 2024 rally he indicated he would encourage Russia to attack countries that had not paid.

However, Defence Secretary John Healey is optimistic. He said, “I don’t expect the US to turn away from NATO. They recognise the importance of the alliance, they recognise the importance of avoiding further conflict in Europe”.^[15] Mr Healey said Mr Trump “rightly pushed European nations to do more to fund NATO better” and pointed out that support for NATO continued through Mr Trump’s first term.

2.2 Ukraine

In his victory speech, Mr Trump said he would “stop wars”, including the war in Ukraine.^[16] Hungarian Prime Minister Viktor Orban said that Mr Trump had told him he would stop all funding to Ukraine. Mr Orban said, “That’s why the war will end, because it’s obvious that Ukraine cannot stand on its own two feet”.^[17]

The US has been a major supporter of Ukraine since Russia invaded in 2022, but a further $60bn military aid package to Ukraine has been stalled in Congress by Republicans aligned to Mr Trump. Security experts have warned that Ukraine is losing ground without the support, and the UK and other European allies would struggle to find the resources to fill the gap. In a House of Lords debate in November, Baroness Chapman of Darlington restated the government’s support for Ukraine: “The UK’s military, economic, political and diplomatic support for Ukraine remains ironclad as we have made clear to the world just what is at stake”.^[18]

The Conversation noted reports that a peace plan being considered by Mr Trump and his advisers “would include an 800-mile buffer zone policed by troops from Europe and the UK as well as a commitment from Ukraine not to join NATO for at least two decades”.^[19]

2.3 Israel and Palestinian territories

The president-elect and the UK government also hold different positions on Israel and the Palestinian territories.^[20] Mr Trump’s unequivocal support for Israel has been commented on in the context of the choice of Arkansas Governor Mike Huckabee to serve as his ambassador to Israel.^[21] Mr Huckabee has said “there’s really no such thing as a Palestinian” and supports a one-state solution. UK in a Changing Europe has described the UK government’s approach to the conflict as having “nuance”.^[22] The UK government has suspended some arms sales to Israel, restored funding for United Nations relief to Palestinian people and removed British objections to the International Criminal Court arrest warrant proceedings against Prime Minister of Israel Benjamin Netanyahu. This approach is closer to European nations such as France, diverging from the future US administration’s likely policies.

2.4 China

The UK and US may also diverge in their approach to China. The Financial Times has assessed that the Trump administration will have a hawkish approach to China.^[23] Meanwhile, the UK government has pledged to review its relationship with China.

After Foreign Secretary David Lammy visited China in October, Prospect magazine concluded that while it had been a “welcome reset of relations”, the UK has “a weak hand to play in an increasingly complex game and cannot expect much sympathy in Beijing unless it is willing to put some distance in its relations with the US”.^[24] Prospect noted the UK is seeking cooperation on issues such as climate and artificial intelligence. Visiting China in November, Prime Minister Keir Starmer called for “consistent, durable” relations between the UK and China.^[25]

2.5 Chagos Islands

It has also been reported that Mr Trump’s team is seeking legal advice about the UK’s decision to pass sovereignty of the Chagos Islands to Mauritius.^[26] The agreement includes the UK and US keeping jurisdiction over Diego Garcia, the island that hosts a joint UK and US military base, for at least 99 years. Mr Trump’s choice for secretary of state, Mark Rubio, expressed concerns that the treaty would pose “a serious threat” to US national security and risk China gaining access to military information through Mauritius.

The new Mauritian government has also expressed reservations about the deal.^[27] During the election, Navin Ramgoolam (now prime minister) criticised his opponent’s government for making a deal which included a long lease to the UK to keep the military base.

Stephen Doughty, minister of state in the Foreign, Commonwealth and Development Office, said that the agreement included “robust security arrangements” for the military base.^[28] Answering an urgent question on the future of the deal on 2 December 2024, Luke Pollard, parliamentary under secretary at the Ministry of Defence, said, “I expect that when everyone looks at the detail of the deal, they will back it too”.^[29]

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Cover image by Tom Fisk on Pexels.