Trump adviser tells UK to dump 'socialist' EU for US free trade deal

Britain should lean towards the United States rather than chase a closer relationship with the 'socialist' European Union if it wants to secure a free trade deal, one of Donald Trump's top advisers has warned. 

The much-debated deal has largely stayed on the sidelines during Joe Biden's presidency, but the prospect of it becoming reality has been revived following Trump's win at this month's US election.

He is set to return to the White House in January, with global leaders already preparing themselves for swathes of change to come on economic policies.

That will include an end to free trade and the introduction of blanket tariffs of up to 20 per cent on goods imported to the US - and up to 60 per cent for China.

Analysts have said the fallout of such a change will have huge economic ramifications and could trigger a global trade war - though Trump is keen to exempt Britain if a deal can be struck. 

Stephen Moore, his economic adviser, said Trump is determined to push ahead with the tariffs to boost US industry and employment. 

But any free trade deal with the UK could stall if the Labour government insists on pursuing a closer trading relationship with the EU. 

Speaking to The Times from Mar-a-Lago, Trump's residence in Palm Beach, Moore said: 'I've always said that Britain has to decide — do you want to go towards the European socialist model or do you want to go towards the US free market? 

'Lately it seems like they are shifting more in a European model and so if that's the case I think we'd be less interested in having [a free trade deal] …'

He added that he believes the UK has traditionally been more aligned with the United States than the rest of Europe.

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Moore said: 'It would make sense to me … I think we do have a special relationship with the Brits more than we do with the Germans and the French and the rest of Europe.'

Without a deal, the UK economy would face a huge hit from the US-imposed tariffs. 

The National Institute of Economic and Social Research said tariffs could result in cutting GDP growth in the UK by half and an inflation rise of 3 to 4 percentage points.

It would also create a not insignificant £21.5billion hole in chancellor Rachel Reeves' tax and spending plans.

The possibility of a deal between the UK and US is however not without its challenges.

One sticking point was the reluctance of UK ministers to open up British markets to US agriculture products. 

Former prime minister Rishi Sunak said last year he would not allow chlorine-washed chicken or hormone-treated beef on the UK market.

And Ms Reeves confirmed on Friday that Labour would keep the same stance as she said the Government was 'determined' to support British farmers.

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'We haven't got to that stage yet but we're determined to support the farming industry in this country,' she told ITV News.

'We're not going to allow British farmers to be undercut by different rules and regulations in other countries.'

Pressed on whether she would rule out imports of chlorinated chicken or hormone -treated beef, the Chancellor added: 'We opposed them in the last parliament and that won't change.

'But we do want to improve trade flows between our countries, that's really important for Britain.

'To build on the trade relationships we have with the US, but also with the EU.'

Another challenge is the departure of Britain's most senior trade negotiator.

Sir Crawford Falconer - who has been the UK's top trade expert since 2017 and who previously worked on a US trade deal with Mr Trump's first administration - will be leaving the Department for Business and Trade next month.

According to The Times, Sir Crawford is leaving his role after his contract was not extended and he will not be directly replaced.

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Labour will instead give more junior officials responsibility for overseeing Britain's trade negotiations in future, the newspaper reported.

Andrew Griffith, the Tory shadow business secretary, said the decision to allow Britain's top trade expert to leave was 'staggering'.

He questioned whether it was 'deliberate self-harm or merely negligence' by Prime Minister Keir Starmer.

'It is staggering that at this crucial time following the US elections, the Government has dispensed with the services of its chief trade negotiator with direct experience negotiating across the Atlantic,' Mr Griffith said.

'It is like retiring your opening batsman on the first day of a Test match.' 

Sir Jacob Rees-Mogg, the Tory former business secretary, said: 'Losing a first class trade negotiator when a trade deal with our biggest trading partner, America, is on the horizon shows how inadequate this Government is.' 

Sir Crawford has spent 25 years working on trade policy and trade negotiations and was previously New Zealand's chief trade negotiator.

He was appointed to be the UK's chief trade negotiator when Theresa May was PM as she prepared for Britain leaving the EU and regaining control over trade policy.

Sir Crawford previously had his contract extended in 2022 and 2023, but it is understood he is 'content' not to have had his contract renewed again.

It was reported last year that he was planning to return to his native New Zealand once Britain had completed its accession to the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) trade bloc. 

Negotiations over a UK-US trade deal began during Trump's first presidency but stalled when Biden replaced him as US president in 2021.

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The Republican's return to the White House has led to hopes that talks could resume, although it has been claimed Sir Keir might prioritise his 'reset' of post-Brexit relations with the EU rather than chase a deal with the US.

Andrew Bailey, the Bank of England governor is also keen for this 'rebuilding' of ties with the EU and insisted the 'consequences' of Brexit could not be ignored as he bemoaned the economy's lacklustre performance since the 2008 Credit Crunch.

In his Mansion House speech on Thursday night, Mr Bailey expressed concern about the 'impact of geopolitical shocks and the broader fragmentation of the world economy'. 

Meanwhile Ms Reeves has said that alongside beefing up ties with Europe she wanted to improve trade links with the US and China.

She said: 'We will not be reversing Brexit or re-entering the single market or customs union, but we must reset our relationship.'

Peter Mandelson, the frontrunner to be Britain's next ambassador to the US, believes however that Britain might be able to secure deals with both the UK and America and 'find a way to have our cake and eat it'

He said it was 'wrong' to think the UK would have to choose between either close collaboration with EU trade policy, or an exceptional trade arrangement with the US.