Round-up: UK's trade surrender. Trump's diplomatic mood swings. Spying on Greenland. State propaganda.

Analysis of the week's events

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The UK’s trade surrender

Ever since Brexit, British politicians have dreamed of a free-trade deal with the United States to boost the UK economy. Now British Prime Minister Keir Starmer has had to settle for simply cutting his losses.

The “deal” announced yesterday amounts to a unilateral British surrender. The country now faces a minimum tariff of 10% on most goods, five times the level of just a few years ago. Some items will be subject to even higher levies. At the same time, the UK agreed to ease restrictions on some U.S. imports. The UK got little in return except some easing of restrictions on beef exports.

That this is being hailed as a victory on both sides is a sign of how far expectations have shifted since Trump’s ‘Liberation Day’ tariffs. The victories here amount almost entirely to a scaling back of the damage that Trump did on that day. And it still leaves trade between the two nations less free and more costly than it was before.

Politics, however, was clearly in the driving seat here. Trump desperately wanted to announce some – any – deal in order to give the impression that he is making progress on rebalancing U.S. trade. In Starmer, he had an eager partner who is willing to play Trump’s game in return for the hope of preferential treatment.

There are still many details remaining to be hammered out, and these are where the devil is. Free trade agreements typically take months of work and run to thousands of pages. What we have now is more like a framework. As talks proceed, there could be nasty surprises ahead.

The markets have been calmed for now by the expectation that this framework means that more announcements are likely to come. But they also ought to take note that it looks like a minimum of 10% is the new global baseline for U.S. tariffs. The U.S. actually runs a trade surplus with the UK already, and the country is historically one of America’s closest allies. If the UK didn’t manage to get the U.S. to go any lower than 10%, it’s hard to imagine that anyone else will.

Unfortunately, Starmer’s decision to surrender has broader consequences. If the whole world stood firm against Trump, the damage he is inflicting on his own economy would eventually force him to change course. Instead, Starmer is leading the way in accepting that we are in a new era – one of lower growth and prosperity. He’s just trying to make sure other nations get hurt more than Britain.

Economists call it a “beggar thy neighbor” policy – taking a decision that is good for yourself in the short-term, but in the long-term harmful to your neighbors and overall global growth. This is the game Trump wants the world to play, and Starmer is joining in far too eagerly.

Trump’s diplomatic mood swings

The Russia/Ukraine negotiations have taken on the character of a soap opera, albeit one with deadly stakes. The tenor of the negotiations keeps shifting depending on Trump’s moods. First he was offended that Volodymyr Zelensky was insufficiently deferential and now he’s reported to be “very angry” with Vladimir Putin for not being more serious about making a deal (who could have guessed that that would happen?).

The one constant in all of this is that Trump doesn’t govern his emotional states, but is governed by them. As

Daniel W. Drezner

has argued, Trump is the toddler-in-chief.

And it’s very hard to run a negotiation this way. Selectively applying pressure to both sides as part of some overall strategy is certainly legitimate. But lashing out depending on whether you personally feel sufficiently respected or listened to is just going to create chaos.

It also allows you to be played. That’s especially the case when you’re up against steeled and seasoned negotiators, as Putin actually is, and Trump is not.

This dynamic of Trump being driven by his emotions is what I would encourage observers of the peace process to pay attention to, not the latest twists and turns. Whatever favor he bestows on the basis of his latest emotional outburst can easily be undone by the next.

And in the current setup of the Trump administration, there are few brakes on this dynamic. Like all narcissists, he is setting up a personalistic regime in which he has the final say on everything and sets the emotional tenor of the entire administration. He is sidelining and perhaps gutting the National Security Council. There are few checks on how he exercises the vast power of the presidency.

It’s also what makes the whole thing so dangerous. Trump is an unserious person playing a very serious game. And I worry about what is going to happen when he realizes he has been boxed into a corner. A toddler is one thing - a toddler with their hand on the red button is another.

Spying on Greenland

Since taking office, the U.S. has been quietly reshaping the priorities of American intelligence agencies. One shift has to be move assets to focus on Mexican drug cartels. This week, we learned about another: the spooks are now spying on Greenland in an attempt to generate intelligence which might help the United States take it over.

The spying seems to be focused on building a picture of the Greenlandic political scene and the attitude of locals towards the United States. According to reports, spy agencies have been told to come up with lists of people who might support U.S. annexation, and to gauge public attitudes towards U.S. investment. This information will no doubt then be used to exert political pressure and find opportunities for American businesses.

(Given that I just appeared on Greenlandic public TV to talk about the Trump administration, I guess I’m now on their radar too - hello CIA!)

Will more direct forms of intervention and covert action be used? We can’t rule it out.