Back in the innocent days of May, when Lord Peter Mandelson was enjoying a typically brief period in British government office as ambassador to the US before one of his now familiar ignominious departures, he helped broker a UK trade deal with Donald Trump. In the nonbinding pact, Trump promised Britain low-tariff import quotas for cars and steel, though the (in fact relatively low) 10 per cent baseline tariffs on other goods remained. In return Sir Keir Starmer's government offered a few low-salience tariff concessions plus a vague commitment to talk about tech regulation and other issues dear to Trump's billionaire backers' hearts.
Four months later, Trump's in town for his second state visit to the UK, the only US president to be afforded such an honour -- the royal family will surely one day give him a souvenir sceptre to take home -- and the deal looks shakier.
The relief on steel tariffs still hasn't materialised, and more worryingly, some people in the Trump circle, notably vice-president JD Vance, are making menacing noises about forcing the UK to loosen its tech regulation. To its credit, the UK has made defiant noises back about defending the highly popular Online Safety Act, which among other things is designed to stop children seeing pornography.
But the regulatory alignment with the US that Starmer announced this week on cryptocurrencies is much more worrying. Anything diverging substantively from EU regulations will threaten UK financial services. The UK government is already dangerously in thrall to the artificial intelligence and crypto lobbies, so encouraging Trump to regard UK regulatory regimes as in play is a dangerous game.
Agreeing an informal pact with Trump was always a hostage to fortune. Was it still worth it? You can make a cynical argument that it was, at least politically, for a relatively small and weak country like the UK. The steel and car industries were given attention that far exceeds their economic weight, but that's true everywhere. For sure, the UK violating the multilateral most-favoured nation principle by giving the US special tariff privileges set a very bad precedent. But given how other, much larger, economies have reacted since, getting its capitulation in first might regrettably have been the right tactical thing to do. In any case, Trump might well have tried to bully the UK in exactly the same way whether it had signed up or not.
The much bigger disappointments since have been the EU and Japan, the former's GDP being five times the size of the UK's, which have utterly failed to stand up for multilateral principles. EU member states harrumphed that they wouldn't sign up to a UK-style deal that accepted the baseline tariffs and then did exactly that. The commission contented itself with negotiating some loopholes, which may or may not be better than the UK's, and then celebrated the deal with toe-curling triumphalism.
The EU public and members of the European parliament, commendably, clearly have higher expectations than do their British counterparts. Citizens of the EU's big countries seem appalled by the deal and MEPs are threatening to weaken the agreement as the price of passing it. For its part, Japan signed an extraordinarily pusillanimous deal to finance investment in the US directed by the White House.
By contrast, the UK deal got tepid approval from the British public, admittedly amid considerable ignorance about it. A poll taken a few days after the agreement showed 29 per cent of respondents regarding it as a fairly or very good deal, with 26 per cent against, 16 per cent neutral and an impressive plurality of 30 per cent having no clue.
At least the agreement didn't force through the regulatory changes long feared in any trade deal with Washington, including adopting America's infamous rules allowing the sale of chemical-washed chicken. (The British public was right about the purportedly pathogenic poultry but for the wrong reasons: there isn't good evidence it's bad for human health, but it would have erected a regulatory barrier with the EU market to save a few pennies off a weekly shop.)
The episode recalls somewhat the race for a Covid-19 vaccine, where the UK was first out of the traps to develop and distribute jabs. In the event it wasn't very far ahead of the EU, but the perception lingered in Britain that it got a jump on the rest of the world. The UK had several years of being comprehensively done over by Brussels in the Brexit negotiations, so it must have been nice to have felt even marginally ahead of the game.
The UK was the first to do a deal with Trump and one of the first to reveal the risks involved. Its benefits have been non-negligible but smaller than promised and with no way of compelling the US to comply. In return, the UK has given the US leverage to try to force regulatory changes that are very much not in Britain's interest. Still worth it? Perhaps. But let's check back in a year's time during what will presumably by then be Trump's annual or twice-yearly state visit to see how clever it looks.