Labour challenged to change Europe stance after Donald Trump victory as 'damaging' tariffs loom

Sir Keir Starmer has been challenged to seek a closer relationship with Europe in the wake of Donald Trump’s election victory as fears grow over the threat of damaging tariffs on Scottish exports.

SNP Westminster leader Stephen Flynn has criticised the Prime Minister’s so-called Brexit red lines, warning it is “ridiculous” to not rejoin the EU single market and customs union.

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His intervention comes amid warnings from business groups over the looming threats of tariff on key produce such as Scotch whisky. Mr Trump, the US president-elect who has swept back into power after defeating Kamala Harris in Tuesday’s election, has pledged to install a blanket tariff of up to 20 per cent on all imports.

Mr Flynn said: “Keir Starmer’s Brexit red lines were always ridiculous. The reality of a Trump presidency must now make them redundant.

“It is basic common sense that if Trump tariffs become a reality, the only economic security and protection the UK can possibly seek is through rejoining the EU single market and customs union – the largest in the world.

“That is now the only path to protect our businesses and consumers in the face of deep economic uncertainty and the damage of global protectionism.

“If the Labour party is stubbornly saying it won’t now drop its self-imposed red lines, then it is deliberately choosing to inflict economic self-harm on Scotland and the rest of the UK. Labour will be every bit as responsible for broken, Brexit Britain as the Tories who imposed it in the first place.

Nationalists have criticised Labour over 'freebies' but SNP Westminster leader Stephen Flynn enjoyed VIP tickets to Wimbledon (Picture: Jeff J Mitchell/Getty Images)

“Everyone knows that Britain is broken - but neither the Labour Party or the Tories are honest enough to admit that Brexit broke it.”

In last month’s UK Budget, prior to the US election result, the Office for Budget Responsibility warned “weak growth in imports and exports over the medium term partly reflect the continuing impact of Brexit, which we expect to reduce the overall trade intensity of the UK economy by 15 per cent in the long term”.

The impending threat of tariffs comes with the Scotch whisky industry already reeling from the decision to increase alcohol duty on non-draught products in the UK Budget. The Scotch Whisky Association had described that move as a “hammer blow”, accusing Sir Keir of breaking his promises.

Mr Trump’s victory has separately sparked fears from Scottish business groups, with industry leaders expressing “clear concerns” that follow the Republican politician’s first presidency.

Speaking to The Scotsman, Miles Beale, chief executive of the Wine and Spirit Trade Association (WSTA), said: “There are some clear concerns inherited from President Trump's first term, such as increased tariffs on wine and spirit products and the sector becoming collateral damage in non-industry related trade disputes once again.

“On the other hand, there is the opportunity of a US-UK free trade agreement. What is certain is that the WSTA remains committed to working with officials, drinks trade associations, companies and other stakeholders on both sides of the Atlantic to advance the cause of the UK wine and spirit industry.”

The concerns inherited refer to spirits and some EU wines ending up as collateral damage in tariff wars related to steel. According to HMRC, UK exports of wine and spirits to the US totalled almost £1.4 billion in 2023.

Andrew McRae, Scotland policy chair of the Federation of Small Businesses (FSB), warned smaller companies would suffer the most from any new tariffs.

He said: “Our latest research shows the US is the top market outside the EU for small firms who trade internationally, including specialist food and drink producers. Of those which trade internationally, more than half (59 per cent) export to the US and nearly a third (32 per cent) import goods.

“The overall cost of international trade is already one of the main barriers facing small businesses who trade overseas or consider doing so. For that reason, any new tariffs and non-tariff barriers are likely to hit smaller exporters the hardest."

The warning comes as MPs reflected on the US election result, prompting a debate on what Mr Trump’s second term as president will mean for Britain. Several MPs told The Scotsman it was vital to restore trust in politics to avoid the election here of a figure like Mr Trump.

Alistair Carmichael, the Lib Dem MP for Orkney and Shetland, said: “The last thing we can afford is to assume that what has happened in the US cannot happen here, whether in the UK as a whole or in Scotland specifically. Authoritarian, illiberal leaders are making progress in many corners of the world and often for the same reasons – dissatisfaction with the state of the economy and the way politics works for regular people.

“If we do not shape up and reform our politics, then before too long we could end up with the same result. That means things like electoral reform, but it also means making a fairer economy, taking action to address the grievances that people like Trump exploit so effectively.”

SNP Westminster leader Stephen Flynn has criticised Labour’s stance on the EU

Scottish Labour’s Graeme Downie, the Dunfermline and Dollar MP, suggested it was a reminder the UK government had to convince people it was delivering for them, and also listen to the public’s concerns.

He said: “First, we've got to deliver and be seen to deliver. I think that's the absolute key. We can't be bashful about who we're delivering for either - those with the least, the very people who feel disaffected.

“Second, front foot positive, almost brash all the time. No apologising for doing what we said we would do. Three, don't tell people they've never had it so good because the stats say so. You can't make people feel things are better.

“Four, end of the day it's money in your pocket. Is working hard worthwhile? If not forget it. Five, don't be afraid of any issue like immigration. Be forward about it, listen don't dismiss.”

Scottish Tory MP John Cooper, who represents Dumfries and Galloway, suggested UK figures could learn from Mr Trump’s campaign being rooted in issues “that matter to people”.

He said: “His ‘America first’ doctrine resonates with millions who worry about their jobs, healthcare, security.

“That’s something of which Westminster parties should be aware. The bien pensants of the left like to label others as right or far right. But the electorate are more sophisticated - they can be ‘left’ on, say, the NHS, but ‘right’ on immigration. Parties need to shape policy based on that and we must not allow others us to tell us where we are on their political spectrum.

“It’s not far right, for example, to want us to spend more on defence. That’s going to be an issue very quickly as Trump has made it clear Europe and Nato cannot ride on America's defence dime. Labour’s woolly promises to increase UK defence spending will not survive contact with a White House that will demand a clear pathway to at least 2.5 per cent of GDP, not the current ‘in due course’ fudge.

“And trade wars will also be an issue. We could, outwith the EU as we are, have hoped to talk direct to the Trump team about major exports such as Scotch. But we are off to a dreadful start with Labour’s bid to back Kamala Harris in the campaign, and embarrassing student-politic quotes from the likes of the Foreign Secretary [David Lammy].

“He’s said to have had dinner with the president-elect - I assume he had an extra helping of humble pie.”

On the call for closer ties with Europe, a UK government spokesperson said: "This government will look forwards and not reopen the divisions of the past. We are working to improve our trade and investment relationship with our European friends and tear down unnecessary trade barriers, while recognising that there will be no return to the single market, customs union or freedom of movement."