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Brexit will make the UK 'infinitely more vulnerable' to trade wars, Labour warns

June 1, 2018

 

Brexit will make the UK “infinitely more vulnerable” to trade wars akin to the standoff between Donald Trump and key allies over steel tariffs, a Labour frontbencher has said.

 

Barry Gardiner, the shadow international trade secretary, warned that Britain was weaker without the weight of the EU's 500m strong consumer market to bargain with after the United States slapped massive tariffs on steel and aluminium imports from Canada, Mexico and the European Union.

 

The move has drawn widespread condemnation and accusations of "protectionism", while the EU has said it will impose countermeasure tariffs on US products such as metals, sweetcorn and tobacco.

 

Liam Fox, the international trade secretary, is also facing pressure to intervene to protect more than 30,000 British workers employed in the steel industry.

 

Mr Gardiner saw the government must not be "cowed or bullied" by the US president's decision to sign off the 25 per cent duties on steel but warned of the wider implications for Britain's trading clout outside the EU.

 

He told the Today programme: “Theresa May has really not managed to persuade Mr Trump at all to abandon the plans that he’s had, despite the fact we’ve now had two months where they have been on hold.

 

“All this special relationship – the idea that we are going to secure a special deal once we’ve left the EU with America – it is a nonsense.”

 

Asked if the UK would be more vulnerable to trade wars outside of the EU, he said: “Infinitely more vulnerable because we will not have the weight of a 500m strong consumer market behind us.”

 

Mr Gardiner also urged the prime minister to drop her Brexit "red lines" and consider joining Labour in supporting a new customs union with the EU after Brexit.

 

He said: “Theresa May’s red lines prohibit her from doing and prohibit her from having that negotiating strength and that’s why she must think again about her own negotiating lines and a customs union with the EU.”

 

Mr Trump originally imposed the tariffs in March, claiming that relying too much on imported metals was a threat to America's national security.

 

However he gave Canada, Mexico and the European Union a short exemption for negotiations - a reprieve that expired at midnight on Thursday.

 

Last night, Dr Fox urged Brussels to avoid a "tit-for-tat" trade war with the US but insisted the UK had not ruled out taking counter measures.

 

He told Sky News: "It's very disappointing that the United States has chosen to apply steel and aluminium tariffs to countries across the European Union, allies of the United States, and all in the name of national security.

 

"And, in the case of the United Kingdom, where we send steel to the United States that is vital for their businesses and their defence industry, it is patently absurd.

 

"We absolutely do not rule out counter measures. And we do not rule out taking a dispute to the World Trade Organisation at Geneva.

 

"Obviously, we still hope the United States will think again about this.

 

"But, it would be a great pity if we ended up in a tit-for-tat trade dispute with our closest allies."

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