Business Insider Edition

Trump is set to strike a trade deal with the EU ahead of the UK as his relationship with Boris Johnson sours

Thomas Colson , Business Insider US
 Feb 12, 2020, 04:15 PM
Donald Trump and Boris Johnson.
Getty
  • The Trump administration is set to prioritise trade talks with the EU over trade talks with the UK, despite previous assurances that Boris Johnson's government would be at "the front of the line" for a trade deal.
  • White House economic adviser Larry Kudlow said this week that restarting talks with the EU "will be easier" than starting from scratch with the UK.
  • Diplomatic relations between Donald Trump and Boris Johnson have cooled significantly in recent weeks following Johnson's decision to back Chinese telecoms company Huawei
  • The decision prompted a furious call from Trump at the end of which he "slammed down" the phone on Johnson.
  • For more stories go to www.BusinessInsider.co.za.

Donald Trump looks set to prioritise trade talks with the EU over the UK, as his relationship with UK Prime Minister Boris Johnson sours.

Trump's administration had previously insisted that the UK would be "at the front of the line" for a new trade deal.

However, White House economic adviser Larry Kudlow told Bloomberg News last week that because of the existing "structure" in trade talks with the EU, "reigniting that will be easier" than starting from scratch with the UK.

Trump's relationship with European countries has suffered in recent months following his threats to impose tariffs on the EU and trigger a trade war.

However, both sides have signaled they are willing to reset relations since Ursula van der Leyen was installed as European Commissioner late last year.

"No one around here is salivating for a trade war," Kudlow said. "Believe me, no one."

Meanwhile, diplomatic relations between Donald Trump and his "friend" Boris Johnson have cooled significantly in recent weeks.

The cooling followed the prime minister's decision in January to let Chinese telecoms giant Huawei build its 5G network, despite intensive lobbying from the US amid security concerns.

Trump was said to have been "apoplectic" during a phone call with Johnson last week after the decision was announced, and he was reported to have ended the call by "slamming the phone down," according to officials in the room. The prime minister has delayed his imminent trip to Washington..

Kudlow said the UK and US were "in the preliminary stages of talks" over a trade deal but added: "We are all interested in doing something. But there's no structure to it yet."

Just two weeks ago, US secretary of state Mike Pompeo had said the UK would be at the "front of the line" for a trade deal despite the Huawei decision.

Meanwhile, the EU and US are looking to improve relations and build on a framework designed to avoid a trade war that was established in 2018. Brussels and Washington have tried for decades to negotiate a wide-ranging free trade deal but have been unsuccessful. Donald Trump formally called an end to the Transatlantic Trade and Investment Partnership - the name for the proposed trade agreement - in 2018.

It appears unlikely that the Brussels or Washington will be willing to make the concessions required to negotiate a successful free trade deal now.

Robert Lighthizer, the US trade representative, said last week that the EU would be required to accept US agricultural products as the price of any trade deal, something that derailed talks last time.

But Kudlow said talks between the EU and US were at a positive stage.

"We have a certain stability in the tariff and trade story right now and it's very constructive and we'd like to keep it that way," he said. "So we will just give it our best efforts."

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