The century-old special relationship between the US and the UK is under significant stress.
Two nations separated by a common language are now seeing their futures drifting further apart as politics and bad finance disrupt them.
Kemi Badenoch, the latest in a long line of UK Trade Ministers, flew into an autumnal New York on Tuesday night, all seductive and ready to promote the UK as the place for American businesses and investors looking to do deals in Europe to set up shop.
So far, America hasn’t taken much note. The 24-hour rolling business news programs have not invited her on and commentators are much more interested in the Bank of England’s desperate move to shore up UK pensions following a disastrous first budget from Kemi’s ERG pamphlet producing co-author, the new UK Chancellor.
Whereas the US central bank – The Fed – is being resolute that its interest rate hikes are the correct course of action and will let the economy cool to stifle inflation, the UK’s Bank of England is judged to have ‘blinked’ and waded in to buy billions of pounds worth of Government debt.
In such ugly circumstances, I’m sure Kemi and her handlers aren’t actively seeking being put under the spotlight by the US’s notoriously blunt and combative media.
Quite what Kemi hopes to achieve from this trip is unclear, especially as her boss, PM Liz Truss, was in town last week as part of the UN get together. There, she reported the chance of any meaningful US-UK trade deal – a key promise of the post-Brexit era and surely her trade minister’s primary goal – was extremely slim.
This is one huge set-back for the UK’s PM as it were she who in May 2020, when Secretary of State for International Trade, returned from meeting her US counterpart waving negotiation papers declaring ‘trade in our time’.
So, it appears, Liz pulled the rug from under Kemi before she even stepped off the plane, and to mix metaphors, chucked her a hospital pass. Kemi is now trying to sign Memorandum of Understandings with the states individually – so far Indiana, population 6.8million, has signed.
But maybe the truth is the US didn’t know she was coming. Or cares.
‘Who?’ retorted America’s business and political leaders.
It’s not that special a relationship if you don’t even know who each other are.
The anonymous politician has so little profile here she could wander through Times Square, queue to go up the Empire State Building or re-enact the famous Meg Ryan scene in Katz Deli on the Lower East Side and still nobody would have blinked.
That Badenoch has also decided to set up shop on a naval warship is both bizarre and insensitive in equal measure.
The UK Government is hosting the Atlantic Future Forum aboard HMS Queen Elizabeth to emphasise the role security plays in global trade and free trade.
Geddit? Nothing says free trade like staring down the barrels of the Royal Navy’s largest warship.
And the special relationship seems a bit one way too.
Biden, by all accounts, spent the minimum time possible with Truss at the UN without causing a diplomatic incident, and let it be known he hoped she would use her time to apologise for her outspoken attack on French President Macron.
He has also made clear that he doesn’t think the recently converted hard-line Brexiteer’s stance on the Northern Ireland protocol is wise and will probably withhold any negotiations on trade until something which secures the Good Friday Agreement is properly in place.
And why wouldn’t he, after all, the balance of payments is heavily tipped in America’s favour; meaning they are less desperate for our money than the Brits are for Americas.
US-UK Trade is worth $270Bn a year with a balance of trade in America’s favour of $21Bn. And although Liz and Kemi may think we are the US’s trading partner of choice, we are currently only 7th on the list of export destinations for US manufacturers and service providers, and 8th on the list of countries the US imports from.
Special, but not the most special it seems.
But there are some bright spots, Liz will probably know that last year America imported slightly less than $60m of her beloved cheese from the UK.
But to put that in perspective, US supermarkets sold $567m of Philadelphia Cream Cheese alone as part of last year’s $35billion national cheese market.
So As Kemi took to her lectern this morning to declare: “The US is our single most important trade, defence and security partner.” Investors and business leaders could be forgiven for switching their attention to their phones and monitoring the continued slide of the pound as a more likely reason to do business in UK.
With the pound getting a pounding, on this side of the special relationship there are opportunities.
US traders, institutional investors, hedge funds and speculators all see the UK stock market – valued in a pound sterling falling as rapidly as the leaves in Central Park – as a moment to get busy and aggressive and acquisitive.
UK Football clubs have always been a fruitful hunting ground for US investors looking to expand their sports content portfolios, access mega-global brands and reap the riches of obscene TV and media rights deals. Everton appears to be back in the shop window according to sources close to the action.
With domestic mortgage costs soaring and the pound racing to parity, UK real estate is also looking heavily discounted to dollar-rich US hedge funds running Real Estate Investment Trusts (REIT) – those tax efficient funds which give access to millions of rental properties, commercial real estate, and land without the headaches of tenants, maintenance, or property managers.
The swankiest parts of central London are always popular with American investors. Hugh Grant has much to answer for. But London’s real estate firms also want in on the action and are now pumping their products on US cable channels and TV.
There is no doubt the UK takes a special place in many American’s hearts – you only had to watch the coverage of the Queen’s funeral to see that.
But to think that relationship – especially in trade and commerce – is in any way more special than the dollar and cents opportunities that businesses are seeking everywhere and anywhere is misguided and outdated.
Listening to British politicians this week repeatedly utter that the ‘special relationship’ is alive and well sounded more like the desperate plea of a jilted lover for his or her beau to not leave them.
Will America with her roving eye give lovelorn Britain another chance? At least until Christmas, maybe?
