By Anna Dereka
Following Trump’s inauguration on 20 January 2025, global politics have experienced profound shifts, with reignited concern among world leaders and uncertainty in international governnance. In his inaugural address, Trump notably re-emphasized his mantra and goal to “make America great again”, aiming to end a period in which the United States had supposedly been “taken advantage of” – thereby mapping out the direction of his policy agenda. A shift towards energy independence, imposed tariffs on China, Mexico, and Canada, mass immigrant deportation and suspended military aid to Ukraine all of which are expected to shake some of America’s long-standing international alliances. In this context, the future of the US-UK ‘special relationship’ has also been questioned. Where does the UK government stand on these changes and what economic impact is anticipated to hit the UK from the ‘Trump effect’?
The end of the UK-US Mutual Defence Agreement?
“This is not a blip in the relationship, something fundamental is going on” stated the former UK ambassador to Washington, Sir David Manning, bringing attention to the special US-UK relationship. The UK-US special relationship, a term popularized by Winston Churchill, dates back to the Second World War and is rooted in the mutual security and defence support between the two countries. Yet, Trump’s focus shift from European security arrangements and his halt of military aid to Ukraine were both received as a challenge to the UK’s Trident program. Britain’s £3bn-a-year maintenance of the ageing nuclear arsenal relies heavily on its alliance with the US. Under the 1958 Mutual Defence Agreement (MDA) between the US and the UK, both countries were sanctioned to develop and maintain nuclear arsenals, in which the UK has been dependent on American nuclear technology, helping it to develop its deterrent. Despite reassurance from Downing Street that the US is a ‘reliable ally’ and insistence that the UK has nuclear independence, some experts suggest otherwise. Hans Kristensen, the director of the Nuclear Information Project at the Federation of American Scientists has stressed the UK’s dependence on the US. He particularly highlighted that the infrastructure used to maintain missiles and the missiles themselves are being supplied by America. If the ‘special relationship’ was to be undermined, the UK’s access to the technology needed to modernize its arsenal would be lost and would require domestic missile technology investment, hence straining the state’s nuclear power and country’s budget.
These events highlight the need for the UK to establish a strategy that ensures its safety against Russia’s aggression, potentially leading to a shift in the UK’s cooperation with France. The UK and France remain the only two European countries with nuclear arsenals. Combined, they possess around 550 nuclear warheads, with the UK having 300 of the total number, yet with all of those being dependent on the US. France, therefore, as an independent nuclear country may need to intervene to provide security for the rest of Europe. Emmanuel Macron stated that France could “be associated with the defence of other European countries”, which outlined the potential Franco-British European deterrent. This was further taken up on February 20 by the chairman of the conservative Christian Democratic Union Friedrich Merz when he stressed the importance of discussions related to nuclear security and sharing ‘with the British and the French’.
Although it may be early to say what impact the US policy will have on the UK, the statements of Friedrich Merz and Hans Kristensen have increased attention to the idea of ‘shared security’. If these concerns continue to rise among countries at the current pace, the UK’s cooperation with European countries on the issue of nuclear safety will become unavoidable.
Can the UK tariffs be ‘worked out’?
Following the 25% tariff imposed on goods from Mexico and Canada and 10% tax on goods imported from China, Trump has threatened to impose similar 25% tariffs on imports from the EU, meanwhile stating that the UK tariffs ‘can be worked out’. Trump has also noted his positive relationship with Keir Starmer, which was further reinforced by UK Secretary of Business and trade Jonathan Reynolds, who highlighted the absence of a trade deficit with the US and UK’s safety from tariffs.
Though the UK is not expected to face direct tariffs on its goods from the US, its domestic economy may still be challenged by ‘substantial risks’, as the governor of the Bank of England has noted. He first highlighted that if there were tariffs on UK goods, British economic growth would be under pressure and would shrink due to lower demand followed by lower inflation. The UK, however, may also benefit from the imposed tariffs on China, Mexico, and Canada. Local businesses might look to expand to other foreign markets, including the UK, therefore providing access to cheaper goods, the export of which is substituted by that to the US.
The trade relationship between the UK and the US itself may also benefit from the ongoing American trade disputes. Should Keir Starmer successfully maintain diplomatic ties with President Trump, the economic partnership of the countries could result in increased foreign investments. This potential outcome is supported by the perception of the UK as a ‘safer economic environment’ in comparison to China, Canada, Mexico, or even the EU, particularly following Trump’s recent foreign policy actions.
However, what seems to have caused greater concern in British national interest are the tariffs on aluminium and steel, as Starmer has suggested “all options are on the table”. As Trump’s trade war expands with new 25% tariffs on aluminium and steel taking effect, the PM asserted that the UK will avoid immediate counter-tariffs. This commitment involves a £2.5bn investment aimed at revitalising the domestic steel industry, highlighting the UK’s preparedness against potential tariffs.
While it remains premature to assess the full impact of the newly imposed tariffs on the UK economy, there is currently no direct threat to the British goods. Moreover, the UK’s preparation for resilience in the steel industry indicates that any risks would likely not harm the economy in the short-term.
The UK as a peace negotiator
On March 2nd, 2025, just two days after the clash of Volodymyr Zelensky and Donald Trump at the White House, Starmer announced a ‘coalition of the willing’ that would guarantee peace to Ukraine. The PM highlighted that the UK, France, and other European countries will work together to end the war and promote negotiations with the US. While he has indicated that around 20 countries could join the coalition, he acknowledged that not all nations would contribute personnel to Ukraine, though other forms of support would be provided. The commitment of the UK particularly, will be shown with “boots on the ground and planes in the air”. In this way, the UK is seen to have taken up the leading position in peace promotion and is seen globally as one of the most important allies of Ukraine. On March 15th the UK is expected to host a virtual meeting with primarily European and Commonwealth countries for the “coalition of the willing”.
Additionally, the UK’s contribution as a peace negotiator has already been prominent in its advising of Ukraine ahead of US peace talks in Saudi Arabia. Ahead of the talks, the UK consulted Ukraine on handling peace talks with the United States. It is believed that Jonathan Powell, Starmer’s national security adviser, has travelled to Ukraine to meet Zelensky, which the president of Ukraine described as “highly productive”.
In its active military support for Ukraine, the UK has adopted a position that contrasts with that of the US. Following Zelensky’s visit to the US, all military aid to Ukraine was suspended, however, a week later, Zelensky’s agreement to accept a ceasefire deal resulted in the US resuming intelligence. Such an assertive policy characterizing the US actions, demonstrates the prioritization of American interests and may have an impact on its diplomatic relationship with the UK. The difference in the strategic approaches to negotiations of the countries could lead to disagreement and political tensions. The UK’s promotion of diplomatic engagement, particularly with the EU and NATO has already led to the UK holding Russia accountable for its war crimes in Ukraine. On the other hand, the US has adopted a more sceptical approach and is seen to be changing the level of US commitment to global conflicts. Moreover, Trump’s blaming of Ukraine for supposedly initiating the war further provides an insight to the contrasting stance of the US and the UK. Uncompromisingly, Trump told Zelensky “You should have ended it three years – you should have never started it, you could have made a deal.” Following this, came the US decision to oppose a resolution condemning Russia’s action in Ukraine and Ukraine’s sovereignty, along with Russia at the UN Security Council.
While the US policies on Ukraine seem unclear and erratic, the UK’s stance remains consistent. The UK’s role as a leading peace negotiator and its cooperation with the European countries could lead to tensions with the US, which seems to prioritise its connection with the rest of the world less, keeping steadfastly focused on “making America great again”.
Conclusions on The Trump Effect
Ultimately, Trump’s presidency has shifted international relations significantly, resulting in political and economic concerns for the UK. Following Trump’s assertive policy to pull back from the European security arrangements, his changing approach to end Russia’s war in Ukraine and the numerous tariffs taking effect have caused the UK to assess the risks to its economy and diplomatic relations with the US. In the unsettled relations between the US,the EU, Canada, and Mexico, Starmer so far has successfully maintained diplomatic ties with Trump which therefore is expected to keep the UK economy and security stable, especially in the light of enhanced cooperation with France. Not only do the two countries see tighter diplomatic relations regarding nuclear safety but are already experiencing similar approaches as key negotiators in peace talks to end the war in Ukraine. Given the unpredictability of Trump’s policy decision making, uncertainty looms, making the UK’s strong relationship with the US a key element in ensuring domestic stability moving forward.
The views expressed in this article are the author’s own, and may not reflect the opinions of The St Andrews Economist.
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