1 week Ago By Obi Jilani
On Friday, Rachel Reeves finally received the news of her dreams – economic growth. After months of recession warnings, new GDP figures show that the economy expanded by a whole 0.5 per cent in February.
While it’s still fairly small fry, it beats the gloomy forecasts from economists – and is fuelling hope in Whitehall that some of ministers’ rhetoric on growth may finally be cutting through.The question – is that progress about to be wiped out by the orange man on the other side of the pond? This was the week that the US president blinked. After promising a hard rain with his Liberation Day tariffs, Trump paused a wave of tariffs for 90 days as he said he wanted to focus on China.
For Wall Street the decision brought some brief relief. Yet while some plans for escalation are now on hold, the global trade war is still in full swing. The 10 per cent tariffs slapped on the UK remain and some in government worry they could stay in place even if they manage to agree a trade deal with the US.
Talks around a trade deal are of increasing urgency. if(window.adverts) { window.
adverts.addToArray({"pos": "inread-hb-ros-inews"}); }The view of ministers is that Team Trump may want a win after a tricky week – so while the UK is not the largest trading partner, an easy deal could be seen as low hanging fruit. Much of the work has already been done – with negotiating talks going on for months, building on the Tories’ work when in government.
“We just don’t know if it will happen,” says a government figure. “It could be quick – or could take a long time.”No wonder then that MPs are getting a sense of déjà vu.
“We’re back to Brexit,” says one Labour MP. “It’s ‘will they, won’t they’ on a deal – and we don’t have many cards to play.” Long term Whitehall figures worry there may be an optimism bias in favour of a deal being done.
They point to the fact the US has always stated regulatory independence – outside the EU’s orbit – as key to any negotiations. How does that fit with the UK’s plan for closer relations with Brussels and the summit next month? Expect Whitehall veterans and some Labour figures to make the case that Trump is too unpredictable and it is time to hug the EU close. Now some of these are the pro-EU die hards.
But senior Labour figures are urging Downing Street to grasp the nettle and make decisions that show the UK is in control. “At the moment we are big on rhetoric and light on action,” says a senior party figure.Right now ministers are pushing a line on immigration that is sceptical about new arrivals and of the view that numbers should come down.
Yet with the government allegedly all in for growth, is there an opportunity to attract all the top technologists and top scientists who are either being pushed out of the USA because of immigration issues or unhappiness with government cuts? if(window.adverts) { window.adverts.
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addToArray({"pos": "mpu_tablet_l1"}); }#color-context-related-article-3637852 {--inews-color-primary: #5C909D;--inews-color-secondary: #EFF4F5;--inews-color-tertiary: #5C909D;} Read Next square POLITICS .inews__post__label__analysis{background-color: #0a0a0a;color: #ffffff;}AnalysisShould Starmer stand up to Trump? Political experts on the pros and pitfallsRead MoreLarge reductions in government funding in the US means that many top scientists are looking for jobs. There’s already been a MAGA debate over immigrants in Silicon Valley.
Next, foreign students. The UK could also relax its own rules about foreign students to both help universities raise cash and attract talent. But they may be worried about headlines on immigration.
Then there’s China. Beijing is likely to dump a huge amount of goods on the rest of the world that it can no longer export to the States. The risk is that this depresses the profitability of all British producers.
So ministers could bring in anti-dumping provisions. In Downing Street, there is a reluctance to look as though they are moving too closely to the EU. “Morgan is allergic to it,” says a Starmer ally of the prospect of closer relations.
Yet as the EU moves away from America, they may be more inclined to work with Britain. Starmer’s challenge is to avoid isolating America in the process..
