Why Britain will lose from America’s trade wars

Davos this year marked the start of a great economic divorce of the United States and Europe. Katherine Tai, the US trade chief, said that globalised capitalism is not working anymore. It leaves workers behind and gives fuel to populists, she said. Really, the Biden administration wants reassert US dominance in the world, and is using the country’s economic weight to do it. The Europeans, meanwhile, seem happy to become more protectionist too, with France’s Europe minister Laurence Boone calling the new US stance a ‘wake-up call’ and saying that Europe should respond in kind. Europe’s leaders are reacting to the reality that, with high energy prices, their manufacturing cannot remain competitive without tariffs.

The last time Europe and the US put up trade barriers against each other, the world went into the Great Depression. We’ll soon find out what happens this time around. What’s certain, though, is that it puts Britain in a perilous place.