The real question on the positive comments of vice-president JD Vance on a British-American trade agreement is what he really hears by the term “agreement”.
Just after the visit of Prime Minister Sir Keir Starmer at the White House in February, it was rather indicative that the British delegation referred to what was negotiated as an “economic agreement”.
This should show that this “transaction” did not concern a vast free trade agreement, covering almost all goods.
In Trump’s first term, the negotiations between the United Kingdom and the United States have progressed fairly well until the controversial problems of the pricing of doctors and food standards are emerged.
Trump’s team told me at the time that she was waiting to see how close the United Kingdom would remain close to the rules of the European Union after Brexit.
This time, “the agreement” seems to have been on science, technology and cooperation of artificial intelligence in exchange for avoiding prices.
The United States wanted to talk about the United Kingdom’s “technological tax” on US digital companies and have raised problems concerning online security law.
However, there is a big problem now.
The United States has now allowed a 10% tax on British imports as part of what it called “reciprocal prices”.
But there is no general problem with this commercial relationship. In fact, the United Kingdom buys more from the United States than the reverse.
Washington’s mood music is that this 10% price is for negotiation with anyone. This is the reference rate that has been taken from almost all American business partners.
Make an exception for a country would simply invite significant diversion.
But the United Kingdom is in a different position from that of other nations.
Most countries were faced with higher prices – as illustrated on the large board of Donald Trump – as on electronics manufacturers in East Asia and they want to keep the tax at the rate of 10%.
The net profit is that the United Kingdom may not have much to negotiate here, and yet it is treated very hard, since there is no American trade deficit.
The factor of electronics exemptions that benefit the Likes in China and the fact that cars, a major industry for Great Britain, are 25% tariffs and that the British team has a lot to complain.
Another problem is that all of this is done at the same time as post-Brexit reset negotiations are described before the UK summit next month.
The word is that the United Kingdom and the EU would like to reset the “high alignment reduction in ambition” which rids the food and agricultural exports of most administrative formalities.
The United States has been interested in this in the past. Could the United States be part of its negotiation?
In addition, many American officials have mentioned the desire of the Allies to join him to contain China.
The United States could also try to force a choice on the United Kingdom here, or at least encourage action to prevent diverted Chinese property.
All this would fly against the entire sale of the British government in the world that Great Britain could be “the most connected economy in the world” with close links on the European markets of products, American technology and the Eastern Asian market, including China.
There is a last factor here, which is very intriguing.
Given the chaos last week on the financial markets, including for the debt of the American government, it is now the case that the United States needs these offers, especially the easy choices with its nearest allies.
The United Kingdom has more leverage than a month ago. The PM may not want to use it, but the United States cannot afford to do the United Kingdom stall or go away.
