The United States is facing a perfect storm of rapidly increasing international trade tensions. The UK, in turn, has taken brash steps to insulate its talks and preserve its demands. President Donald Trump’s strategy to bring back American manufacturing is to whack ‘em with tariffs. This change sent shockwaves through foreign governments, forcing the UK government to start marking sensitive trade documentation as “secret” and “top secret.” This shift is designed to protect the goods and services that our trade negotiators seek from critical scrutiny by the American public.
Ursula von der Leyen, the European Commission’s president, announced the decision just before Christmas. She announced that the European Union will extend or increase retaliation against US tariffs. This ruling arrives against a backdrop of increased trade tensions, most notably Trump’s imposition of tariffs on Chinese products. The EU’s defensive posture is a sign of widespread trepidation regarding the effect US trade policy will have on international markets.
In a bid to prevent compromise of sensitive data, Commission staff after arriving in the US have been issued “burner” phones. Thirdly, the EU believes the current diplomatic environment should be respected. This precaution serves as a reminder of the often over-derided “danger” lurking behind trade discussions.
The UK has traditionally been the US’s closest ally on defense and security issues. This integral partnership is being pushed to the limit as both countries face a rapidly growing and complicated trade environment. Classified government stuff is often marked as “UK/US only.” It is the least free of the “Five Eyes” alliance that joins together Australia, Canada, and New Zealand. The limit on document classification has doubled largely out of a fear of exposure to American sunlight.
The US Section 232 duties on steel, aluminum, and cars is still 25%, making trade relations even more fraayed. Big pharma takes big hit. Large pharmaceutical firms across the UK and EU have been hit hard by these tariffs. They are limited in their ability to realize their businesses’ full potential across borders.
The Chinese commerce ministry has recently released its sternest warning yet at the face of escalating trade war. If the United States persists in using these tariffs, Beijing is going to respond by subverting them. The ministry stated, “If the US continues to increase tariffs on Chinese products, China will not be polite.” They showcased that more powerful countermeasures are coming to the rescue.
China has very recently retaliated by refusing US goods entry into its market at the current tariff rates. This scenario is going up like fire. This sentiment more broadly captures a global wave of countries reconsidering their economic partnerships due to sudden shifts in US policy.
British civil servants have panicked in response by changing their pen-handling instructions to stack the deck against public access to the sensitive negotiation materials. Officials label these documents as “secret” to protect national security interests. This provision goes a long way towards stopping any potential air leaks while they are in deliberations with their American counterparts.
Sandwiched among these many hurdles, US Vice President Kamala Harris recently declared that American officials are already engaging deeply with Keir Starmer’s administration. They are continuing to aggressively seek a possible trade deal. This cooperative effort is a promising sign that both countries are still looking for areas of cooperation despite increasing tensions.
In a twist nobody expected, President Trump countered with a 90-day postponement on additional tariffs. This decision has provided a welcome reprieve for UK and EU businesses. Yet they have been fighting against high stakes unpredictability in trade relations.