Stephen Moore, a senior economic advisor to US President-elect Donald Trump, has urged the UK Government to prioritize aligning with the United States rather than the European Union in future trade deals. Speaking to BBC Radio, Moore cautioned that following what he described as the EU's "socialist model" could hinder the likelihood of a US-UK free trade agreement. He specifically advised Prime Minister Keir Starmer to focus on strengthening ties with the US to unlock greater economic opportunities.

“The UK is kind of caught in the middle,” Moore said. “I believe that Britain would be better off moving towards more of the American model of economic freedom. It would spur the Trump administration’s willingness to do the free trade agreement with the UK.”

Bank of England Highlights Trade Challenges with the EU

Moore’s comments come amid a broader debate about the UK’s post-Brexit trade strategy. Bank of England Governor Andrew Bailey recently emphasized the need to repair economic ties with the EU. In a speech at Mansion House, Bailey noted that changes in the UK-EU relationship post-Brexit have negatively impacted trade in goods and contributed to economic challenges.

While the Labour government, led by PM Starmer, has firmly ruled out reversing Brexit or rejoining the single market, both Starmer and Chancellor Rachel Reeves have acknowledged the importance of "resetting" relations with the EU. Reeves highlighted that the EU remains the UK’s largest trading partner, making improved cooperation vital for economic growth.

Trump’s Tariff Plan Sparks Global Concern

President-elect Trump’s pledge to impose a 20% tariff on all imported goods has already raised alarm among global trade partners. Moore’s remarks underline the potential for tension between the UK and the incoming US administration, particularly if UK-EU relations do not align with American economic priorities.

While Chancellor Reeves expressed optimism about building ties with the Trump administration, and PM Starmer’s recent visit to the US reportedly fostered positive communication with the President-elect, Moore’s statements suggest potential friction ahead. The Labour Government may face challenges in balancing improved EU relations with maintaining strong ties to the US.

Balancing UK’s Trade Strategy Post-Brexit

As the UK navigates its post-Brexit economic future, the competing pressures to align with the EU or the US underscore the complexity of its trade policy. With the EU as a dominant trading partner and the US offering opportunities for growth, the UK Government must strike a careful balance to secure economic stability and future trade deals.

Sources: Reuters & BBC News