UK cannot side with Donald Trump as he escalates his trade war on West

The UK is seeking to be a neutral in Donald Trump’s trade war but such a position could come to be seen as collaboration by the European Union and countries like Canada

Speaking about Donald Trump’s economic policies, Warren Buffett, the billionaire investor known as the ‘Oracle of Omaha’ for his sound financial judgment, recently said that tariffs were “an act of war, to some degree”. This remark underlines how serious the situation has become and it is in this context that the UK should consider its next steps.

On Wednesday, which Trump has named “Liberation Day”, he is expected to impose what he calls “reciprocal” taxes to match tariffs imposed by other countries in response to his tariffs. So the economic conflict between the US and Western democracies is only set to escalate.

The UK is currently working to carve out exemptions from Trump’s tariffs. And it may be that we are able to sit on the sidelines as the European Union and countries like Canada seek to resist his aggression.

The UK is trying to negotiate exemptions from Donald Trump's tariffs (Picture: Anna Moneymaker) | Getty Images

Trump’s ‘Liberation Day’ looms

The problem is that, as tensions increase, ‘neutrals’ can start to seem more like collaborators. If UK-US trade booms and helps America cope with the domestic problems caused by tariffs, such as higher inflation, the EU might eventually conclude that we have picked a side, the wrong one, and must now be treated as a hostile state.

This would leave the UK isolated and beholden to America, a weak position that Trump would doubtless seek to exploit in trade talks. However, there is no doubt that the consequences of standing up to Trump would be serious.

On Thursday, Trump warned: “If the European Union works with Canada in order to do economic harm to the USA, large-scale tariffs, far larger than currently planned, will be placed on them both...”

A few hours later, Canadian Prime Minister Mark Carney said something remarkable, an extraordinary remark that would have been unthinkable just a few months ago: “The old relationship we had with the United States based on deepening integration of our economies and tight security and military cooperation is over... there will be no going backwards.”

It is clear that Trump is the aggressor in this economic war and, when push comes to shove, the UK must stand with our allies in the EU and Canada.