Areeba Sherwani looks at the possible impact of a victory for Donald Trump on the UK and Europe.

Donald Trump: The UK-US Special Relationship at a Crossroads.

The United Kingdom and the United States are connected through a “special relationship”. Since the Second World War, this relationship has covered defence pacts, trade, global diplomacy, and influence on UK politics and culture. The saying that “what starts in the US usually ends up in the UK” tends to be true.

Mutual trade is at the heart of that special relationship. In the twelve months ending March 2024, UK exports and imports to the USA dwarfed every other country. UK exports to the USA were £192bn, nearly a quarter of all UK exports, while imports from the USA were £117.2bn.

The UK/US also maintains one of the world’s most enduring and influential intelligence-sharing and defense partnerships, rooted in collaboration through NATO, the Five Eyes alliance, and the AUKUS trilateral pact. These alliances have been central to numerous military operations, nuclear deterrence efforts, and the exchange of cutting-edge technologies.

UK-US Political Alignment.

Twenty-five years of the US-led War on Terror has resulted in UK politics becoming even more aligned with the US, especially through wars in the Muslim world.  As a result in the UK, an anti-Islam/Muslim political and policy discourse has relentlessly been pumped out by US-linked think tanks and media corporations, for war.

Political movements like “Brexit” and “America First” have also intensified nationalism and anti-migrant sentiment, pushing toward isolating the UK and US in a more confident Global South world.  US and UK support for Israel’s genocidal policies in Gaza and sanctions against Russia for its invasion of Ukraine have started to push the Muslim world and Global South away from trade with the West.

After Brexit, the UK has been struggling to regain its global standing in a shifting geopolitical order, once portrayed as acting as a stabilizing force, advocating for consistent US involvement in global affairs. However, the prospect of a second Trump administration will exacerbate this dynamic, potentially leading to a more erratic and politically driven US foreign policy. This shift could signal a resurgence of the “America First” agenda, characterized by a more nationalistic and isolationist stance, which will have implications for global affairs.

Such an approach will impact the UK, which gains international importance as a tail to the US in world affairs.

Trump’s Isolationism, A Concern for the UK and Europe

The US global strategy is already transforming, moving away from a unipolar world dominated by American influence toward a more multipolar global order. A survey from the Chicago Council on Global Affairs underscores this shift, showing that many Republicans aligned with Trump, support a more isolationist stance, favoring reduced US involvement in international alliances, particularly in Europe.

For Western leaders, a shift toward US isolationism is deeply concerning. With Russia’s influence in Eastern Europe, such a pivot could undermine NATO, drastically altering transatlantic relations, and reducing military support for Ukraine.

The UK’s military-industrial complex, encompassing major defense firms like BAE Systems and Rolls-Royce, plays a crucial role in its economy and defense strategy, producing advanced military equipment and benefiting from global arms exports. Since Russia’s invasion of Ukraine in 2022, the UK pledged £12.8 billion in support to Ukraine since February 2022, of which £7.8 billion is for military assistance. This includes £3 billion for military assistance in 2024/25. Strategically, the UK benefits from the war’s prolongation, as they believe it weakens Russia militarily, bolsters NATO’s unity, and enhances the UK’s leadership role in European security. With a Trump win, assuring the world that he will end the war in Ukraine in 24 hours, and later reduce US spending on NATO, this raises significant concerns for the UK and other European nations.  While the UK supports a “peaceful resolution”, the ongoing war aligns with its broader goals of containing Russian influence in Eastern Europe, strengthening NATO, and sustaining its military-industrial sector.

Should the US retreat from these global commitments, the European Union could face a more fragmented and multipolar landscape, where nations like Germany, France, and Italy might seek greater independence in asserting their influence.

Europe is already confronting challenges in meeting its strategic goals, with internal tensions becoming more apparent. In Germany, the financial burden of increased defense spending has raised doubts about the country’s ability to meet its obligations, particularly within the context of collective European security. Similarly, Hungary, under Prime Minister Viktor Orbán, has taken a more obstructionist stance within the EU, especially on defense spending and collective policies, complicating Europe’s efforts to present a unified front against external challenges.

These internal divisions, especially within Germany and Hungary, risk Europe’s ability to deliver on its strategic goals and maintain cohesion in the face of external pressures as seen in recent years. This decentralization could trigger a domino effect, leading to more Brexit, which would heighten instability across Europe.

A Spiraling Energy Crisis

According to Jeremy Shapiro, Director of the U.S. Program at the European Council on Foreign Relations, the UK once acted as a strategic “Trojan horse” for the U.S. within the EU before Brexit. With the UK’s departure, nations like Hungary or even Italy might assume that role in a Trump-led administration, supporting Washington’s interests in the EU, particularly in areas like trade.

Shapiro also noted changes in transatlantic energy relations following Russia’s 2022 invasion of Ukraine. Before the conflict, a significant gap existed between US and European energy prices, but the surge in US liquefied natural gas (LNG) exports to Europe has reduced this disparity. However, a second Trump administration could take advantage of Europe’s dependency on US LNG by imposing an export tax, further widening the energy price gap. Since Europe has limited alternatives to Russian energy, it would likely be forced to pay the tax, raising energy costs and giving the US a competitive edge, particularly in energy-intensive industries.

In May 2024, Chatham House published a report titled “Three Foreign Policy Priorities for the Next UK Government: A Case for Realistic Ambition,” which highlights the UK’s vulnerability in global supply chains, particularly in the event of a US-China conflict. The report emphasizes that the UK lacks a clear strategy to manage its dependence on overseas suppliers, leaving it vulnerable to disruptions in critical global supply chains.

The UK’s Middle East Policy

The UK’s decision to suspend 30 out of 350 arms export licenses to Israel in response to Israel’s war on Gaza represents a minor shift in its approach to the Israel-Palestine conflict. Rather than signaling a profound policy change, this move appears more like a precautionary measure aimed at protecting the UK from potential legal and reputational risks, such as being accused of complicity in genocide.

This decision reflects the UK’s attempts at a careful balancing act in the Middle East, where it has historically maintained strong diplomatic and military ties with Israel, while also advocating for a two-state solution and expressing concern for the humanitarian situation of Palestinians. By suspending a small number of export licenses, the UK is seeking to distance itself from Israel’s genocide in Gaza, which experts argue by every definition constitutes violations of international law.

However, the suspension only impacts a minor portion of the overall arms trade with Israel, indicating that the UK’s core support for Israel remains unchanged. The action seems more like a measured response to growing domestic and international demands for accountability, rather than a significant shift in the UK’s broader policy toward the region.

When US President Joe Biden stated in public for Israel to “go ahead and hit Iran’s oil industry”, and later on Trump remarked “hit the nuclear first, and worry about the rest later”, the price of oil jumped to 5%.  Iran is the seventh biggest oil producer in the world, as a critical energy player, Iran’s role in global oil production cannot be understated, and any disruption such as the closure of the Strait of Hormuz, through which 20% of the world’s oil flows would hit global energy prices. This could trigger a severe economic crisis, reminiscent of the 1970s oil shocks.

For a newly formed UK government still finding its footing, the challenge is immense. The UK must navigate its Middle East policy with extreme caution, balancing its strategic alliances, especially with the Middle East, while preventing a catastrophic spike in energy prices that would fuel inflation domestically. Diplomatic engagement with key regional players and safeguarding critical trade routes like the Strait of Hormuz will be essential. Simultaneously, the UK will need to ramp up efforts in energy diversification and collaboration with international partners to cushion the global economy from potential shocks.

America First? The UK’s Dilemma in a De-Dollarizing World

Donald Trump’s proposal to impose a 100% tariff on goods from countries that shift away from using the US dollar in international trade could seriously strain relations between the West, particularly the UK, and much of the rest of the world. This policy, which is part of Trump’s broader “America First” agenda, aims to counteract the rising trend of de-dollarization. Key global powers such as Russia, China, India, and the BRICS+ bloc are increasingly moving away from the dollar to assert greater autonomy in global trade, and Trump’s proposal seeks to curb this shift. However, such an approach risks further isolating the US and its allies, including the UK, from emerging economies that are crucial trading partners.

For the UK, which is already dealing with economic challenges like high inflation and stagnant growth, the consequences of such protectionist policies could be particularly damaging. Many countries like India, UAE, and Saudi Arabia exploring alternatives to the dollar, are not only re-aligning with Russia and China but also serve as key trading partners for the UK. Imposing blanket tariffs could severely disrupt global supply chains, worsen trade deficits, and drive up the cost of vital imports. In the past, US sanctions and protectionist measures have complicated the UK’s ability to maintain trade relationships, as seen in its difficulties with energy and defense deals involving Iran and Russia, where US policies limited the UK’s autonomy.

Trump’s proposed tariffs would likely force the UK into a precarious position, as it would have to navigate between supporting its longstanding ally, the US, and preserving its trade ties with nations increasingly shifting toward a de-dollarized economy. While the US may be prioritizing its economic sovereignty with this policy, the UK, as a smaller and more trade-dependent economy, could suffer significantly from retaliatory measures by other countries. These retaliations could further isolate the UK and intensify its economic struggles.

The political divisions posed by the rise of Trump’s MAGA “nativist” movement (Make America Great Again) are also being played out in the UK. Nigel Farage the leader of the Reform Party is the face of MAGA politics in the UK and dedicated to helping Trump win. It is no wonder Keir Starmer’s Labour Party, appears to be putting in great efforts to ensure a Harris victory. If Trump wins Nigel Farage’s Reform Party is likely to become Britain’s main opposition party and a major contender for power in five years.

Conclusion

As the global order shifts and U.S. foreign policy becomes more unpredictable, the UK will have to adapt to a rapidly changing landscape, recognizing its status as a mid-sized power. While Donald Trump may not fully withdraw the US from global affairs, he is likely to pursue new alliances with leaders who share his worldview, which would reduce US commitments to Europe and the Middle East. Should US influence in these regions wane, the UK may well have to reconsider re-entering the EU to project global influence or face greater global isolation.

Under the Labour government, the UK will need to define its national interests, diversify its foreign policy, avoid full alignment with any single geopolitical bloc, and move towards greater political and economic independence.  That might not be a bad outcome for the UK and the rest of the world in the long term.

Areeba Sherwani is a Research Associate at the Ayaan Institute.