Dear Subscribers,
Donald Trump expressed optimism about the prospect of a UK-US free trade deal after holding talks with the Prime Minister in Washington. British officials are trying to persuade American counterparts not to impose the 25% tariffs which have been threatened against the EU. A trade deal with the US would be good for Britain, but would likely force Starmer to abandon his hopes of bringing the UK back into the remit of the EU.
EU Commission President Ursula Von Der Leyen has said that the EU and India intend to conclude a free trade agreement this year. It has been 4 years since talks restarted having collapsed in 2013. Negotiations between the UK and India restarted last week having been put on hold during election campaigns in both countries.
Slow and steady wins the race?
The CEO of a leading hotel chain which manages a multi-billion pound property portfolio across the UK and Europe has said that the Labour government has made the UK an ‘investment risk’ and deterred investment from the hospitality industry. The comments are part of an escalating crisis of confidence in the UK economy amongst business leaders. The pressure is on the Chancellor to give people cause for hope in her upcoming Spring Statement.
Keir Starmer and Emmanual Macron are scrambling to put together a peace plan for Ukraine which will be acceptable to President Trump. After a heated conversation between Zelensky, Trump, and the Vice President in the Oval Office European leaders are increasingly worried that the US will give no regard to European security concerns in pursuing peace in Ukraine.
Can they find get peace and security?
Apple has withdrawn a cloud encryption service for UK users after the government ordered the company to reserve ‘backdoor’ access for intelligence and security agencies. US officials have criticised the move, which will deny UK users access to the most secure messaging services on the market.
Media
David Starkey on the abuse of the ‘rule of law’
Julian Jessop on net zero and economic growth
Blog
Peace in Our Time, or Au Revoir America by Adrian Hill
Our regular Ukraine contributor, a former soldier and diplomat, and a staunch friend of America, asks why Donald Trump has become Putin’s spokesman? He believes that if the present administration continues along the course President Trump has announced, we can no longer regard the United States as a reliable ally, and must act in consequence.
Only one NATO member has ever invoked Article 5 of the treaty – the United States of America after 9/11. The Baltic states sent troops to Afghanistan and Iraq. So did we. As a diplomat for nearly thirty years I can tell you that trust once broken is sometimes beyond repair. Unless the Trump administration swiftly changes course, we may soon be seeking a new global alliance of old friends and some past enemies. Ukraine’s fall, if we let it happen, would be savage and bloody. Millions would flee west. How lamentable if ‘the American Century’ ended so disgracefully.
How is UK’s Brexit economy performing by Graham Gudgin
The latest evidence shows that the UK economy has grown as fast or faster than other major European economies although not nearly as fast as the rapidly-expanding USA. There is little evidence that Brexit has yet had any significant influence on growth. As the UK starts to diverge from EU regulations this may change for the better.
The UK’s economic growth has been partly driven by the extraordinary levels of net migration in recent years. It is comparatively easy for immigrants to obtain work in the UK even if this results in a Deliveroo economy of low productivity activities including such things as ubiquitous Turkish barbers as well as the food delivery riders. Once again, there is little evidence that Brexit has affected the path of productivity (GDP per employed person).The slow growth of productivity is a major problem for most European economies. It has little to do with Brexit and attempts to blame Brexit are a waste of valuable time and energy.
Key Points
Those sympathetic to the Ukrainian war effort will be dismayed by the sudden shift in US policy under the new administration. It appears Trump has decided that Russian control of Crimea and the Donbas presents no threat to NATO interests and that the US is more interested in taking advantage of Ukraine’s mineral wealth than resisting Russian expansionism. But there is one change which ought to be welcomed, which is the weight that is now put on casualties of war. Far from the front line, it is easy to measure the war in billions of dollars of war aid, but the strategic interests of Ukraine and NATO should be weighed up not just against monetary cost but also the cost in loss of life.
From the very beginning, both Ukraine and Russia have been coy about the number of dead and wounded on the battlefield. In December, President Zelensky claimed that 43,000 Ukrainian combatants had been killed, and a further 370,000 had been wounded. American media outlets estimate the number of Ukrainian war dead is closer to 80,000 and could be as high as 100,000. The United Nations has confirmed more than 12,000 civilian deaths with the true number thought to be much higher.
Russian losses are even harder to estimate. Ukraine claims to have killed almost 200,000 enemy soldiers, but there is a high degree of uncertainty. US and UK intelligence estimates that more than 700,000 Russian soldiers have been killed or wounded. This includes losses from associated militias (like the Wagner Group).
Until now, these deaths have not featured in public debate about western support for Ukraine except as evidence of the brutality of the Russian war machine. This is a significant omission, and we should hope that the dead are remembered behind closed doors when officials assess the pros and cons of supporting the war. It would of course be unwise to let a regime with a much larger appetite for the death of its own soldiers think that, at some point, the number of casualties will get so high that the west caves, but we cannot shirk all responsibility for the consequences of putting Ukraine in a position to fight but not in a position to win.
Trump is right to lament the number of Ukrainians dying in battle, and he is right to reassess the benefits of supporting the Ukrainian war effort in light of those deaths. Selling out after 3 years of war and giving Putin an easy victory would constitute a failure for the US and NATO, but sponsoring a prolonged war of attrition against Russia with little prospect of a breakthrough would be a human tragedy. If the US and Europe are unwilling to give Ukraine the resources it needs to win the war, then an imperfect Trump-negotiated peace might be the next best option.
