Building an Economic Alliance: British PM Rishi Sunak Pledges to Work with the US to Counter Global Threats
British Prime Minister Rishi Sunak arrived in Washington on Wednesday to forge an economic alliance with the United States to counter global threats. Sunak will attempt to achieve this despite the two countries’ trade tensions and after the UK government admitted that it was giving up on a trade deal with the US.
Countering Protectionist Measures
Sunak will also seek concessions from US President Joe Biden to counter Washington’s “protectionist” efforts to build a domestic industrial base in green technologies. UK Commerce Secretary Kemi Badenoch warned that Biden’s $369bn green subsidy package, the Inflation Reduction Act (IRA), is “protectionist” and would lead to industry onshoring in the US, to the allies’ disadvantage. Sunak’s spokesman said the British prime minister and Biden would aim to provide viable solutions supporting the two countries’ supply chains.
Critical Minerals and EV Subsidies
The UK hopes that the US will offer it the same deal that Washington extended to Japan in March under which America allowed certain US credits to be extended to critical minerals mined or processed in third-party countries that had signed an agreement with the US. Sunak wants Britain to become part of the Western alliance building supply chains independent of countries like China and Russia.
Some UK government officials have floated the idea of making the country home to an AI regulator serving as the summit’s host to discuss the issue later this year. Sunak’s talk with Biden at the White House will also focus on the need to support Ukraine, including through air defence systems.
Summary
British PM Rishi Sunak arrived in Washington to seek economic alliances with the US despite tensions between the two nations, with talks centred on critical minerals, electric vehicle subsidies, artificial intelligence, and supporting Ukraine.
Additional Piece – Expanding on the Topic
The UK’s failure to secure a trade deal with the US following Brexit highlights the difficulties of obtaining a favourable economic agreement with one of the world’s most powerful countries. This situation has left the UK searching for ways to build an economic alliance and open lucrative markets for its businesses. Sunak’s visit, though, is an indication of the UK’s ambition for global leadership in the wake of Brexit, with talks aimed at creating an Anglo-American tech axis providing a means to counterbalance Europe’s efforts in that field.
The US and the UK are countries united by a common language and strong historical, political, and cultural links like none other. Strengthening these ties will bring numerous benefits to both countries. A strategic understanding between the two countries will propel diverse sectors like critical minerals and green technology to compete effectively among emerging economies like China and others that have been aggressive in their efforts to develop natural resources.
The US and UK already have a strong collaboration on security and defence initiatives. The NATO military alliance has strengthened these collaborations, and the two countries aim to build long-lasting economic cooperation. The current meeting is an excellent opportunity to build a robust economic and intellectual alliance, uniting the two countries to address emerging global challenges, including climate change, the digital economy and supply chain security. By speaking with one voice, the US and UK can better shape international standards for new and emerging technologies.
The UK faces an unprecedented opportunity to increase its engagement with the US. The Digital Service Tax is one of the issues on the agenda for discussion. The tax is levied by the UK on American tech firms, with the US government arguing that the tax disproportionately targets its companies. Sunak is seeking a concession from the US to remove these barriers by proposing a moratorium on arbitrary digital service taxes till 2030.
The US and the UK are among the world’s biggest producers of critical minerals, like lithium, cobalt. Both countries are investing heavily in EVs, so it is inevitable that they will become major players in critical minerals’ production and processing in the years to come. By collaborating on emerging supply chains, the US and UK can ensure their domestic critical minerals’ reserves are sufficient and self-sustainable, reducing critical mineral dependency on China. Accelerating domestic processing of raw materials using innovative and sustainable technologies would create export opportunities for both countries.
This ongoing deepening of strategic ties between the US and the UK presents an exciting possibility of boosting business opportunities and economic growth on both sides. The meeting of Rishi Sunak, the Chancellor of the Exchequer, with executives of various US companies shows the emergence of the UK as a vital destination for US firms amid Brexit-related uncertainty. The US companies can access the talent in the UK and expand in North America, which is a tremendous advantage.
In conclusion, the UK and the US have significant potential to strengthen their already strong historical, political, and cultural ties even further. Teaming up to confront global challenges and compete in emerging markets would provide a mutually beneficial future for both countries.
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British Prime Minister Rishi Sunak will arrive in Washington on Wednesday pledging to build an “economic alliance” with the United States to counter global threats, seeking to mask trade tensions between the two sides.
Downing Street admitted ahead of the visit that Britain had given up on seeking a free trade deal with the United States, an agreement once seen by Sunak and fellow Eurosceptic Conservative MPs as one of the biggest economic prizes of leaving the EU.
Meanwhile, Sunak will try to get concessions from the US president Joe Biden to soften what British ministers called Washington’s “protectionist” efforts to build a domestic industrial base in green technologies.
In a world dominated by the US, China and the EU, Sunak will attempt in his two-day visit to ensure that Britain’s voice is heard in debates on “de-risking” the West’s economic relationship with China and on regulating of artificial intelligence.
Sunak will draw on the close military relationship between the UK and the US, strengthened during the war in Ukraine, and say the two sides can work closely together to build economic security.
“The UK and the US have always worked hand in hand to protect our people and support our way of life,” Sunak said. “As the challenges and threats we face change, we must build an alliance that also protects our economies.”
UK Commerce Secretary Kemi Badenoch is among those UK ministers who have warned that Biden’s $369 billion green subsidy package – the Inflation Reduction Act – is “protectionist” and would lead to the onshoring of industry in the US at the expense of the allies.
Sunak’s spokesman said the British prime minister and Biden would seek to address this issue by providing “meaningful solutions that support our supply chains”.
British officials said talks between the two leaders would consider critical minerals used in the production of electric vehicle batteries.
Britain should be offered the kind of deal already promised by Biden to Japan in March: Allow the extension of US “clean vehicle tax credits” to critical minerals mined or processed in third countries with which Washington has an agreement.
EV buyers in the United States can receive a federally funded $7,500 rebate on their car if it is made in the United States and contains enough “local content,” such as battery.
The rules set by the IRA have unleashed a flurry of investment in the US by battery makers.
Allowing the UK to benefit from the rules could mean that battery materials, such as lithium that is mined or processed in Britain, count as local content in US-built vehicles. Such a move could be a potential boon for the UK’s fledgling EV supply chain.
Sunak wants Britain to be part of a network of Western allies building supply chains that remove dependency on states like China or Russia. “This is an area where we can find common ground,” Sunak’s spokesman said.
The prime minister also hopes that Britain can be an “agile” regulator of AI, positioning itself as a lighter regime than the EU and therefore making it more attractive to US companies and a potential example for a global approach.
But Sunak finds himself trying to insert himself into a discussion already underway at a preliminary level between the US and the EU, which have set up a trade and technology council to discuss such issues.
Antony Blinken, US Secretary of State, said at a meeting with the EU in Sweden last week: “I think we share the belief that the [trade and technology council] has an important role to play in helping establish voluntary codes of conduct that would be open to all like-minded countries.”
British officials have floated the idea of the UK becoming the home of an international AI regulator and serving as host of a summit to discuss the issue later this year.
Sunak’s meeting with Biden at the White House will be their fourth meeting in four months and the talks will also focus on the need to support Ukraine, including through air defense systems.
The British prime minister will also meet with congressional leaders on Wednesday and hold a meeting with CEOs of major US companies on Thursday.
https://www.ft.com/content/469134c9-3f2b-4518-9614-8f8de907159b
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