Responding to the Prime Minister’s speech on supporting UK businesses following Trump’s tariffs, Liberal Democrat Leader Ed Davey said:
Donald Trump has launched an assault on the global economy which threatens thousands of British jobs and family finances with another pasting in the midst of a cost of living crisis.
The Government needs to break from its policy of cowering in the corner and stand tall with our Commonwealth and European allies against Trump’s tariffs through a new economic coalition of the willing.
The strategy of hoping Donald Trump will be nice to us has not survived contact with reality. Now is the time to show the White House we have alternatives and end this trade war through strength not timidity.
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14 Comments
We really need to be hammering Reeves. With the FTSE100 down over 600 points already this month, it illustrates just how silly it was to push people away from Cash ISAs and into Stocks and Shares ISAs. Most people are already exposed to the stock market through their Defined Contribution pensions. Making them risk more of their savings is something that only an ex-banker could think was a good idea.
@ Laurence Cox As I understand it (I’m sure you’ll correct me if I’m wrong), Ms Reeves has not done this. According to the Guardian the matter has been postponed until the autumn (quite wisely, IMHO) given the present Trumpian induced slump in world markets.
What is interesting is how long it will take for the Donald to become the American Liz Truss.
@David Raw
This sort of comment shows a pretty definite intention. Just because it is the written documents instead of in the verbal statement you should not ignore it.
In the document, the government said: “The government is looking at options for reforms to Individual Savings Accounts that get the balance right between cash and equities to earn better returns for savers, boost the culture of retail investment, and support the growth mission.
https://www.morningstar.co.uk/uk/news/262611/rachel-reeves-pledges-cash-isa-reform-in-spring-statement.aspx
@DavidRaw. Since Trump doesn’t get economics at all and has the attention span of a gnat and doesn’t listen to advice, he won’t even notice if he does. And you can be sure that he won’t accept any responsibility and will blame everyone else: Kamala Harris;Joe Biden; the deep state; eye etc. Even if he becomes incapacitated, we’d then get JD Vance an even bigger lunatic
@Mick Taylor
Trump is unconventional since he regards international relations as all about playing people rather than dealing with the underlying issues. He would probably be a good poker player as he would not pay attention to the cards in his hands but to the looks on his opponent’s faces.
Unfortunately, the consequences if he loses are far more than just having to leave the table.
The adherence to globalization and the liberal economic orthodox view has sadly left too many behind. Before criticising Trump/ Vance we need to acknowledge that at least.
@Craig Levene: But Trump has no answers for the left behind.
@David Raw: I have a small bet on Trump leaving office in 2027. IMHO that’s the earliest it’s likely to happen. It would be a Nixon-type scenario, where a Democrat-controlled congress impeaches and convicts Trump (unlike with Nixon, I can’t see Trump jumping before he’s pushed). Vance could well go down with him.
@ Alex Macfie I’m glad for your sake it’s a small bet, Alex, though having lived through fifteen different U.S. Presidencies (and done U.S. political history as part of my first degree) nothing ever surprises me when you consider what happened to those different individuals at different times.
Incidentally, given Ed’s current bullish stance, are you expecting a repeat of 1814 ?
@Alex I don’t see any way they could take Vance down at the same time. The problem is that Trump’s impeachment would put him in power.
@CraigLeviine, with regard to Trump and his views on globalisation. From separate interviews I’ve listened to, involving Rory Stewart and David Starkey, they each analyse that Trump wishes a return to the old historical concept of spheres of influence. That is America, China and Russia and others. These spheres are , in his
mind, economically self contained and do not need to trade with each other. He thinks that Canada, Greenland, Panama are in America’s sphere of influence.
David Raw,
if I calculate correctly, 15 US presidents goes back to the 32nd president Franklin D Rossevelt !
Trump is not the first US president to blow-up the International trading system. Nixon collapsed the Bretton Woods system when he ended gold convertibility in 1971 and imposed a 10% tax on all imports subjected to duties. The USA had run trade supluses with the rest of the world for the two decades after WW2, but during Lyndon Johnson’s term began to run large federal deficits to finance the great society and Vietnam war spending generating high inflation, trade deficits and unemployment Understanding the Nixon Shock and Its Lasting Impact on Modern Finance
The 1970s were a period of stagflation that did significant damage to US trading partners and American workers alike. Real wages in the USA have stagnated since 1973.
Ronald Reagan negotiated the Plaza Accords in 1985 primarily directed at the US trade deficit with Japan How the Plaza Accord helped the US destroy the Japanese economy. The Japanese economy imploded a few years later and Japanese standards of living have yet to recover to this day.
China is in a relatively weak negotiating position vis a vis the USA importing only 1/5th of what it exports to the US. Politically, however, China may be prepared to engage in a trade was with the USA both to save face and to avoid the fate of Japan after the Plaza Accords.
If the UK is to take a stance with our Commonwealth and European allies it may be worthwile pulling Lord Keynes plan for an International Clearing Union out of the drawer Is it time for the Bancor?
@ Joe Bourke FDR is correct, Joe – though the first one I was consciously aware of was Harry S. Truman. Amazing how the years go by.
I take it from this that Ed has no real idea about what exactly the UK government should be doing to “stand tall”. as for ending this trade war, its only really a war if you want to join in, personally, the adult way forward is to bring contracts with UK and European partners to the top of the pile so that they get signed off, whilst contracts with US companies get “held up in the system”.
As I has noted before the UK government, being so highly dependent upon US software companies, only really functions because the occupant of the White House permits it. Also many European banks are also subject to US government “interference” – suggest researching the issues the Dutch government had sorting out the mess caused by the closure of ATB after the US applied sanctions to it – the bank ran systems on Microsoft cloud…