LONDON — Britain hopes to keep out of Donald Trump’s global trade war. But persuading the unpredictable United States president not to clobber British imports with his punitive tariff regime won’t be easy.
As Trump threatens to slap tariffs on friendly countries like Canada and insists he’ll also hit the European Union, officials in London are mulling ways to avoid taking a hit of their own.
Trump insisted Sunday night that a deal to spare Britain “can be worked out.” So could buying more American gas do the job?
It’s a plan — alongside a potential boost in British arms imports from the U.S. — now being talked up in Westminster as a way to curry favor with the commander-in-chief.
“We are going to have to get gas from somewhere if we are producing less in the North Sea,” former Energy Secretary and U.K. Chancellor Kwasi Kwarteng told POLITICO, referring to the fast-depleting reserves off the U.K. coast.
Until more nuclear power comes online, “the U.S. is the natural place to go,” Kwarteng argued. “The only other options are Qatar or Russia — and we’re not going to get it from there.”
This sort of pivot could land well with Trump, who is already trying to order around the EU on fossil fuels.
“The one thing they can do quickly is buy our oil and gas,” Trump said, when asked how the bloc could avoid threatened tariffs.
He has also moved to scrap a Joe Biden-era freeze on permits for new liquefied natural gas (LNG) drilling projects — a process by which gas is cooled into a liquid and shipped across the world before being converted back to gas.
One former U.K. energy department figure — granted anonymity to speak freely — agreed a deal could be possible, pointing out the U.K. made similar arrangements following Russia’s invasion of Ukraine. That resulted in U.S. LNG ramping-up to 26 percent of total U.K. energy imports. “Better to buy from the States than Qatar,” they said, echoing Kwarteng.
“Something Trump wants is for the U.K. and European countries to increase their purchases of U.S. energy, which could be [used as] a bargaining chip,” agreed Maxime Darmet, a senior economist at Allianz Trade.
Matthew Oresman, partner at the international law firm Pillsbury, said: “That’s an area where there’s a U.K. need, and a U.S. desire and U.S. supply … which could be part of that bridge-building.”
“I think there are going to be a number of bargains that the U.K. might need to put on the table,” Labour MP and Business and Trade Committee Chair Liam Byrne said.
Trump is a “very transaction-focused politician,” Byrne said, adding: “LNG purchases could be one thing the U.K. could offer to do.”
Green grumbles over gas guzzling
More gas imports will surely prove controversial with the North Sea oil and gas sector, already frustrated by the government’s toughened tax regime and its moves to ban new fossil fuel licenses in British waters.
But dependence on U.S. LNG will only “increase as time goes on” as domestic output falls during the next decade, predicted Glen Bryn-Jacobsen from National Gas.
LNG also pollutes more heavily than domestically-sourced gas — due to the regasification process and shipping — so stepping up imports could all create yet another Whitehall row between growth hawks and greenies.
Ana Maria Jaller-Makarewicz, lead energy analyst, Europe, at the Institute for Energy Economics and Financial Analysis, argued the U.K. should be ramping up domestic clean energy as an alternative.
“Instead of committing to more LNG imports, risking increasing potential emission impact, the U.K. should continue reducing gas demand by scaling up renewable energy and deploying heat pumps,” she said.
“We should be doing everything we can to reduce our reliance on gas,” said Liam Hardy, head of research at the Green Alliance think tank. He added: “If we must import gas, doing this by pipeline from Norway leads to much lower emissions than shipping it from the United States.”
Those concerns are unlikely to get much of a hearing in the White House, though, where Trump has pledged to “drill, baby, drill.” He signed an executive order vowing to withdraw the U.S. from the Paris Accord, a key agreement for pursuing global climate action, the evening of his inauguration.
Speaking of his dealings with the Trump administration during his first term, Kwarteng said: “They were very ideological. We were very keen to decarbonize at the time. The U.S. had no truck with that at all. Their priorities were divergent, even if we got on well with his personal interlocutors.”
Jet diplomacy
It’s not only energy imports where Whitehall’s attention is turning in the era of Trump’s trade war. The U.K. may also look to buy more U.S. defense exports to pacify Trump and avoid future tariffs.
One defense industry figure, granted anonymity to speak freely, said further British orders of the American-made F-35 fighter jets could now be in play.
The U.K. has to date ordered 48 of the fighter jets, after originally promising to buy 138 in 2015.
But there has been doubt about reaching this figure due to Britain’s efforts to build new stealth jets with Italy and Japan as a part of the Global Combat Air Program (GCAP).
Trump’s return to the White House may change the government’s thinking. A senior Whitehall figure said when it came to purchasing more American F-35s “everything was on the table” as a part of the U.K.’s ongoing defense review.
The British government has been strategizing for months on how to convince the president not to slap tariffs on British goods.
Sam Lowe, trade expert at Flint Global, said one of the most difficult scenarios for Starmer would be a demand from Trump to buy more U.S. food products — particularly beef or chicken.
Lowe said this would “require regulatory change” and result in a “big fight with farmers.”
This was a serious block to a trade deal in Trump’s first term as it would require the British government to accept U.S. food safety standards and legislate to allow practices like hormone-treated beef or chlorine-washed chicken on supermarket shelves.
Starmer has already said this is a red line his government will not cross. But in a new world defined by Trumpian deal-making, the risk of tariffs may yet concentrate minds in Whitehall.
This article has been updated. Graham Lanktree contributed to this report.
The post How Britain can escape Trump’s tariffs: Buy American gas appeared first on Politico.
