China could gatecrash Starmer’s diplomatic party
Keir Starmer has repeatedly said that the UK doesn’t need to choose between strengthening economic and trade ties with the US and deepening them with the EU. A few weeks ago, concern was growing in Whitehall that if the UK didn’t strike a deal with America then the chance of a tariff rapprochement could be imperilled by the signing of a deal with the EU that looks set to happen next week.
President Trump isn’t keen on the EU, to put it mildly, and the fear was he wouldn’t take kindly to the UK cosying up to our continental neighbours. As it turned out, a diplomatic triumph fell into the PM’s lap when the White House hastily brought forward a deal with the UK, clearing the way for next week’s EU ‘reset’ deal.
So far, it looks as if Starmer has been proved right; the UK hasn’t had to choose between the US and the EU; it chose both. But this nifty diplomatic dance may be gatecrashed by the world’s other leading economic actor; China. As part of the US deal, the UK has agreed that it “will work to promptly meet US requirements on the security of the supply chains of steel and aluminium products intended for export to the US.”
China sees this as an American move to cut its products from critical Western supply chains. Beijing’s foreign ministry is not happy, saying “Co-operation between states should not be conducted against or to the detriment of the interests of third parties.” They fear that the Trump administration could insert the same clause into future deals, cutting out Chinese steel (among other things) from sectors including energy and infrastructure.
The UK has moved quickly to downplay such an idea, saying nothing about its newly-inked deal with the US undermines China. However, there will come a point when this assertion is tested and an angry Chinese reaction to the UK going cold on, for example, Chinese made wind turbines, could blow up ministers’ ongoing (and naive) efforts to deepen ties with the one-party state.
The Chancellor has made no secret of her plan to lean on China for future UK growth opportunities, and energy secretary Ed Miliband also considers them a vital partner. Keir Starmer has managed to repair relations with the US and EU, but trying to accommodate China in the emerging new economic order could prove a stretch too far.