Trump has been clear that on trade he wants to confront China directly, and that he’d like to accelerate the U.S.’s decoupling from China’s economy for both economic and national security reasons. This includes revoking China’s “most favored nation” status, adopting a four-year plan to phase out Chinese imports of essential goods, restricting outbound investment in China, as well as Chinese investment in the U.S.
Trump also plans to impose a “universal tariff” of 10 percent on goods imported to the U.S., which will likely apply to free trade agreement (FTA) partners and allies including the U.K. Tariffs on Chinese imports will be at least 60 percent, with current U.S. President Joe Biden’s recent tariff announcement spurring Trump on. And he will use these tariffs to demonstrate his readiness to protect U.S. workers — and to force other nations to the negotiating table.
This U.S. agenda will leave the future Labour government in a predicament. The U.K.’s relationship with the PRC is fundamentally different from Washington’s, and although national security and industrial strategy are elements of economic policy, the size of the U.S. economy grants it options the U.K. doesn’t have.
There are already some areas of discord between the two countries when it comes to China: For example, unlike the U.S., no U.K. law explicitly banning products from Xinjiang currently exists. And in contrast to both the Trump and Biden administrations, the U.K. government doesn’t agree that China has committed genocide in the region — a bone of contention for human rights advocates.
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Moreover, with Trump focused on trade-related national security concerns, biotechnology and pharmaceuticals could become a flashpoint. Today, the Chinese biotech companies Washington is considering blacklisting are allowed to operate in the U.K. and partner with U.K. firms. One of them, BGI Group, has even worked with no fewer than 16 universities.
Another potential area of friction is electric vehicles (EVs). While talks continue over China investing in a gigafactory in the U.K., Starmer will be torn between potential new jobs and advancing his net-zero agenda at the lowest possible cost — something that would provoke the U.S. by inviting further Chinese ownership and influence in the British economy.
