A man holds an American flag depicting president-elect Donald Trump at Parliament Square in London in 2020.
- The U.K. holds dear to its so-called "special relationship" with the U.S., priding itself on a long history of shared values and cultural, diplomatic, linguistic and commercial ties with the States.
- Whether the bonds are felt as keenly across the Atlantic has always been a bone of contention for London, however.
- The "special relationship" could be tested when Donald Trump returns to the White House following his election win against Vice President Kamala Harris.
The U.K. holds dear to its so-called "special relationship" with the U.S., priding itself on a long history of shared values and cultural, diplomatic, linguistic and commercial ties with the States.
London feels those long-standing bonds and geopolitical interests make its relationship with the U.S., well, special.
Whether that feeling of exceptionalism and unique closeness is appreciate or felt as keenly across the Atlantic has always been a bone of contention for London, however, and the bond between the U.S. and U.K. could be tested further when Donald Trump returns to the White House following his election win.
In the run-up to the vote, Britain's Prime Minister Keir Starmer had looked to strengthen the relationship with Trump, checking in on the Republican leader after an assassination attempt against him, and traveling to New York with Foreign Secretary David Lammy to dine with him at Trump Tower in September.
Congratulating the president-elect on his decisive win, Starmer posted on X that he looked forward to a collaborative partnership with Trump
"As the closest of allies, we stand shoulder to shoulder in defence of our shared values of freedom, democracy and enterprise," he commented, adding, "From growth and security to innovation and tech, I know that the U.K.-U.S. special relationship will continue to prosper on both sides of the Atlantic for years to come."
Money Report
Still, Starmer might have some groveling to do with a new Trump administration.
Tensions flared last month when Trump's campaign team in October accused the Labour Party of "blatant foreign interference" in the presidential election after party activists travelled to the U.S. to help Harris' campaign. Starmer and the party denied the accusations.
Feeling out of the loop? We'll catch you up on the Chicago news you need to know. Sign up for the weekly Chicago Catch-Up newsletter.
There's no doubt that the leaders are cut from different cloths — the brash and unpredictable character of businessman-turned-politician Trump is a far cry from the more measured style of the former human rights lawyer who once took on big business in high-profile court cases.
Addressing British lawmakers on Wednesday, Starmer reacted to Trump's win by reaffirming his commitment to good relations with the U.S., stating "it is absolutely crucial that we have a strong relationship, that strong special relationship forged in difficult circumstances, between the U.S. and the U.K."
But Kemi Badenoch, the new leader of Britain's opposition Conservative Party, which is more ideologically aligned with the Republicans, goaded Starmer over past criticism of Trump by the current Labour foreign minister who, in 2018, called Trump a "woman-hating, neo-Nazi-sympathising sociopath" and a "profound threat to the international order" in a magazine article. Lammy has since said he would work with Trump and would look to persuade the infamously NATO-skeptic Republican to remain in the military alliance.
The UK can lie low
Economists say Britain should not expect any special treatment when a new Trump administration comes into force, but they note it's unlikely the U.K would be a prime target for punitive policies, such as import tariffs, that could be levied on the European Union and China as Trump looks to boost America's growth and competitiveness.
Trump has already threatened to revive a trade war that began during his first term in office, stating in his election campaign that he would raise tariffs on Chinese goods by 60-100%, and would impose a blanket 10% tariff (or potentially 20%) on all U.S. imports, a move opening up a new front in trade tensions with two of its largest trading partners, the EU and China. The U.K., now outside the European bloc, might find its post-Brexit position an advantage.
"The U.K. is, quite frankly, probably small enough to be off the radar," Kallum Pickering, chief economist at Peel Hunt, told CNBC after Trump's election win.
"We're not part of the EU anymore. China and the EU are the big two [that will be targeted by Trump]. We won't come into any issues around NATO commitments, because we meet our own. Whereas with Europe, Trump could conceivably say, 'we'll threaten you with a trade war, but if you increase your military spend and meet your NATO commitments, we'll not put tariffs on,'" Pickering said, noting that "Trump likes to trade everything off."
While "Starmer may have offended Trump at some point, or David Lammy might have offended America," Pickering noted that "these are relatively small potatoes versus Trump's issues with Europe and NATO or China containment. So I think with a bit of careful diplomacy, the U.K. and the U.S. can get on good terms quickly," he said.
Not so special anymore
Describing the "special relationship" as one of convenience for the U.S., Pickering said the U.K. could still maneuver itself to be useful to an incoming Trump government.
"The key thing for the U.K. is, can it reassert itself as this mid-Atlantic broker between America and Europe now that it's outside of the EU? This was always the U.K.'s advantage — to be the English speaking common-law, American partner within the European Union, and by brokering that relationship, that allowed us to punch above our weight diplomatically."
Whisper it, but the "special relationship" ceased to be special long ago, according to Holger Schmieding, chief economist at Berenberg.
"Apart from strong cooperation on intelligence gathering and few military aspects, all recent U.S. administrations have treated the U.K. as a normal mid-size European country," Schmieding told CNBC Wednesday.
"That Trump and Starmer are apparently not fans of each other, to put it mildly, will not help in future U.S.-U.K. talks. But it is not the decisive factor, largely because for the U.S. will probably not be inclined to give any special treatment to any country in Europe," he said.
Schmieding said it's advisable for the U.K. to coordinate its response to Trump with its European neighbors, notably on how to react if Trump cuts U.S. military aid to Ukraine, as expected, meaning Europe is on the hook for the funding gap left by Ukraine's strongest ally since Russia invaded in February 2022.
Although the picture has improved since Trump was last in office, from 2017 to 2021, the president-elect is likely to continue to harangue European members of NATO to increase their defense spending, a perennial bugbear for Trump.
NATO members committed in 2014 to spending 2% of their national gross domestic product on defense but laggards remain, including Germany, France, Italy, Turkey, Spain and Canada. Even the Netherlands, whose former leader Mark Rutte is now NATO chief, has failed to meet the spending pledge.
After being elected to office in July, Starmer made a "cast-iron commitment" to raise U.K. defense spending to 2.5% of GDP, but has refused to give a timetable for the increase. Still, the U.K. is in Trump's good books when it comes to defense spend, with its expenditure in the arena standing at 2.3% of GDP in 2023, NATO figures show. The U.S. spent 3.2%, making it the second-largest spender after Poland, at 3.9%.
Trump rattled NATO members in February when he said he would not provide military protection to any member state that had not met its financial obligations to the bloc, and would even "encourage" adversaries "to do whatever the hell they want" to that nation.
