Britain could escape the full force of trade tariffs threatened by Donald Trump on the European Union and other countries, according to the governor of New Jersey.
Phil Murphy, who knows Trump personally, believes he may seek to carve out a “lane” for the UK given his ties to the country.
Sir Keir Starmer’s Government is scrambling to build bridges with the incoming president, who has said he wants to increase tariffs on goods imported from around the world by 10%, rising to 60% on items from China.
Chancellor Rachel Reeves has spoken out against a wave of new tariffs which Bank of England governor Andrew Bailey has warned could hit the global economy.
If Trump does spark a new global trade war with hefty tariffs, it could put a major dent in Labour’s plans to grow the economy in Britain, just as it has regained some stability after the shocks from the Covid pandemic and Vladimir Putin’s invasion of Ukraine.
On a visit to London, Democrat Mr Murphy said the the president-elect’s victory at the polls had been “very sobering”, with the loss of both the House and the Senate “particularly troubling” for his party.
But he offered a more optimistic assessment of what a Trump presidency might mean for British exports.
“I’m sure you are concerned about tariffs, the bilateral relationship. If I had to speculate I would say there’s a lane for the UK. There’s less of a lane for the EU and Nato. There’s a lane for the UK to be determined,” he said.
“He is somebody who I think will have sympathy with an entity leaving a larger club. There was a certain relationship here - Brexit and Trump were born in the same year.
“I can’t speak for the president but I think there is an embedded sympathy for someone who leaves a bureaucracy, leaves a club.”
Trump’s mother was born in Scotland where he has several golf courses.
However, the free trade deal between America and the UK, trumpeted by Brexiteers before the 2016 referendum, still looks extremely unlikely to happen as Trump moves away from free trade.
Trump vowed on his campaign that he would tax all goods imported into the US if he won back the White House, saying he thought “tariff” was “the most beautiful word in the dictionary”.
“I’m not sure how much of that is going to get put into action,” Mr Murphy said, adding “it doesn’t make economic sense” to impose aggressive levies on allies.
Mr Murphy has forged links with the former president where some of his Democrat colleagues have been reluctant to do so, staying in contact after the former businessman left the White House.
On a visit to the UK capital and Cambridge aimed at bolstering business ties in industries such as artificial intelligence (AI), life sciences and renewable energy, he said he was confident that the change of administration would not harm these efforts on a sub-national level.
“We believe with great passion that those relations can be strengthened,” he said. “We start in a good place here.”
But he added that the impact of tariffs would cause “significant damage” domestically, and “households would pay that price” due to inflation.
