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POLITICS EXPLAINED

How will Donald Trump’s second term affect British politics?

From the future of Starmer’s post-Brexit reset with Brussels to how Kemi Badenoch deals with Nigel Farage, Andrew Grice looks at what the 47th president has in store for Labour and its rivals

Monday 20 January 2025 17:32 GMT
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Donald Trump takes oath of office as he is sworn in as 47th US president

Britain is likely to feel a huge impact from Donald Trump’s second term in office – on the economy, defence spending and foreign policy issues such as Ukraine, the Middle East and China.

How will Keir Starmer handle Trump?

The prime minister will be pragmatic and make every effort to do business with the incoming president; he judges that maintaining the UK’s long-standing links on defence, security and intelligence is in the national interest.

Although Labour has worked hard to build bridges with Team Trump, several dark clouds hang over the relationship and there are bound to be some disagreements. The president regards Keir Starmer as “a liberal” and knows that many senior Labour figures, including the foreign secretary David Lammy, have made disparaging remarks about him in the past.

Trump allies were irked when Labour officials campaigned for his rival Kamala Harris in the US election. They would prefer Karen Pierce to remain UK ambassador in Washington and, as The Independent revealed, Trump is still considering whether or not to approve Peter Mandelson, Starmer’s choice, as her successor.

But British diplomats hope the president’s “soft spot” for the UK – his mother was Scottish – and his love of the royal family will work to the government’s advantage. There is talk of senior royals touring the US, as well as a state presidential visit to the UK.

How much will Trump 2.0 affect the UK economy?

A lot. Starmer’s government is anxiously waiting to find out whether the UK will be hit by the tariffs of 10 to 20 per cent Trump has threatened to impose on all US imports.

The government will warn him this could force the UK to cut defence spending by almost ?2bn, making it harder to achieve his key objective for European nations to boost their defence budgets. Whitehall’s nightmare scenario is a global trade war sparked by US-China tensions, leaving post-Brexit Britain exposed as it is an open economy. The UK will not be immune from Trump’s domestic economic policies, which could either create a boom or, by failing to reduce US debt, push up inflation and interest rates. Starmer wants closer links with China, but it is in Trump’s sights over trade and he might ask the UK to impose tariffs on some Chinese products.

However, a US-UK trade deal on services such as digital and technology might be possible and could aid the UK economy.

Can Starmer avoid a binary choice between Europe and the US?

In his keynote foreign policy speech last month, the prime minister insisted: “The idea that we must choose between our allies, that somehow we’re with either America or Europe, is plain wrong. I reject it utterly.” In reality, he will put off such a choice for as long as possible, but some allies admit privately he will not be able to “have his cake and eat it” forever. Starmer is determined to reset relations with the EU to boost Britain’s weak economic growth but Trump will try to lure Britain out of the Brussels orbit. An eventual compromise might be to “go with the US" on defence but be closer to the EU on trade issues.

Could Trump scupper the UK deal to hand the Chagos islands to Mauritius?

Yes he could. Starmer initially hoped to rush through his deal with the Biden administration before Trump took office but eventually decided to wait to give him a chance to decide its fate.

Britain will try to convince him it is a good deal, including for the US base on Diego Garcia, but senior figures in the Trump camp are worried the agreement would extend Chinese influence in the Indo-Pacific because Mauritius is economically dependent on China.

How will Trump’s return affect the other political parties?

A big winner will be Nigel Farage, who is not shy about trumpeting his close relationship with the new president. But the Reform UK leader’s offer to act as a “below the radar” unofficial envoy for the UK has been rejected by ministers, who suspect any such work might end up very visible indeed.

But Farage’s special relationship with Trump is also a headache for Kemi Badenoch. It threatens to eclipse the Conservative Party’s traditional links with the Republican Party when the Tories and Reform are locked in battle to be the “real opposition” to Labour.

Ed Davey is positioning his Liberal Democrats as “the only party that will criticise Trump”. This could encourage some Labour figures to urge Starmer not to be “too fawning” in his relations with the president. The prime minister might come under similar pressure from the SNP, Greens and pro-Palestinian independents.

Will Elon Musk pipe down now that Trump is in the Oval Office?

It doesn’t look like it. UK ministers had hoped the world’s richest man, seen by some as the “co-president,” would cease his war of words against Starmer on his X platform (formerly Twitter). Musk, who heads the Trump administration’s efficiency drive, welcomed the UK government’s decision to set up more inquiries into grooming gangs but soon returned to the attack over what he saw as plans to extend voting rights to foreign nationals and the police’s reported reluctance to record the ethnicity of offenders. He looks set to remain a thorn in the side of the UK-US relationship.

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