It was predictable enough that the election of Donald Trump would come to define Keir Starmer’s premiership. Whether it be his imposition of tariffs or his abandonment of Ukraine, the US president has been hugely consequential for the UK and created immense challenges for the Prime Minister.
At least for the moment, Trump appears to have been charmed by Starmer. If this helps us to avoid the worst on tariffs or security cooperation, the Prime Minister will have done the country a service, although a more than nagging doubt must remain that any favour granted by Trump merely gives him leverage to exploit later. Tactical successes should not be begrudged, but nor should they get in the way of strategic clarity. If – as is likely – the US demands that the UK avoids lowering trade barriers with Europe or China in return for favourable treatment on US tariffs, it would be a long-term mistake to accept those demands. Now is not the time to increase dependence on the US, nor weaken relations with other parts of the world – as Rachel Reeves appears to recognise.
The US is now an unreliable partner, unlikely to uphold the terms of any agreement it reaches if the president does not feel like it. Furthermore, the great damage inflicted by Trump to the US’s reputation will, in turn, damage its economic strength.
To take just one factor, albeit an important one, the countries that succeed in the next few decades will be those with a talented and well-educated workforce. Partly, this is about the domestic education system, but it is also about migration. The most talented have options as to where to study, work and bring up a family but, for the overwhelming majority of American citizens and for many from the rest of the world, the US has long been the location of choice. There is every reason to believe that the Trump presidency will change that conclusion for a significant proportion of these people.
US academic institutions are under attack. Even if one thinks that the DEI agenda within universities went too far, or that the response to anti-Semitism from university authorities was grossly inadequate (and, as it happens, I do), the attack on the independence of these institutions, and the willingness to weaponise the tax system against those institutions that hold out, is chillingly authoritarian. Overseas students and academics who hold political positions antithetical to that of the US administration face the possibility that they will not be allowed to enter the country or may be expelled at some point in the future.
Science is also perceived to be under attack. Elon Musk has cut federal support for science, while Trump has appointed Robert Kennedy Jr as his health and human services secretary – a man whose approach to vaccines makes scientists despair.
The rule of law is imperilled. Court orders are ignored, law firms that have acted against Trump’s interests are extorted and judges are abused if they find against the government. A successful commercial environment requires trust, but without the rule of law, such trust is impossible.
Even the policy that motivated many in business to back Trump – the prospect of tax cuts – is at risk. Bond market jitteriness makes higher levels of government borrowing difficult; Musk has, predictably enough, failed to find the public spending savings he promised; tariffs, rather than being a great source of revenue, will damage economic growth and tax receipts. Some of the people around Trump, such as Steve Bannon, are vocal in arguing that tax cuts for the wealthy would be politically disastrous.
Bring this together and the combination of authoritarianism, populism and uncertainty makes the US an uncomfortable place to be. There has already been a large reduction in the number of visitors to the US, and it would be no surprise if we saw this replicated with those wanting to live there. As for those already resident in the US, a likely emerging story will be the numbers who decide to sit out the rest of Trump’s second term somewhere else.
This should be the UK’s opportunity. We have the advantage of the English language and close cultural links, at least with the coastal regions of the US. We uphold the rule of law, we respect science, and we have several world-class universities.
There are measures that we will need to take. Sensitivity about immigration numbers will have to be overcome but the case for reforming our visa system to attract wealthy business people, scientists and the most capable students is an overwhelming one. Particularly for the latter two categories, real ambition in expanding the Oxford-Cambridge arc could create a geographical area able to compete with Silicon Valley.
Our tax system is now less competitive than it was for the internationally mobile after the abolition of the non-dom regime. Anyone close to this population will say that we are losing many of our highest contributing taxpayers but, even in this environment, there are still US residents considering relocating to the UK. The new circumstances in the US mean that the government could look again at the taxation of foreigners to ensure that we are competitive. None of this is straightforward, and we will not be without competition, as President Macron has already made clear. Nor does this make up for the many negative consequences of the Trump administration for the UK economy. But with sufficient boldness, attracting many of the best and brightest from the US could provide some much-needed mitigation.
[See also: Trump’s war on anti-Semitism will backfire]
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