Britain will have to dance to a US tune on trade

  • Video report by ITV News Business Editor Joel Hills

Donald Trump is unpredictable but on one issue he has been consistent: he says free trade has been bad for the United States.

In Trump's view cheap imports have put Americans out of work.

The president-elect has made it clear that he intends to renegotiate agreements, tearing up those he deems unacceptable.

Lord Livingston was a trade minister in David Cameron's government, a post he took-up in 2013 when he stood down at chief executive of BT.

On Monday, he told ITV News that the British economy would suffer "collateral damage" if Trump followed through with threats to impose tariff on US imports from China and Mexico.

Of course Donald Trump may be bluffing.

He had an election to win and is himself an investor in Britain, with his golf courses in Scotland.

But Trump also knows that the public mood has changed.

Since the Second World War successive governments have preached that free trade spreads prosperity and peace, but free trade has created losers as well as winners - there are parts of Britain that look like the Rust Belt in America.

The economic case for rolling back tariffs and lowering trade barriers may look academically compelling, but for a large constituency of voters it's increasingly unclear that benefits outweigh the costs.

Lord Ian Livingston was a former Minister for Trade and Investment. Credit: PA

Livingston is a believer.

He said: "The prices of what we buy today are substantially lower, very substantially lower because of free trade... We can buy a lot more and we are wealthier as individuals.

"I think it is a concern that some people are looking at free trade as being the cause of he problem when actually free trade together with targeted help is the solution to so many of our problems."

In Livingston's view the EU's trade deal with the US (TTIP) is "sleeping deeply" and unlikely to be revived.

He's enthusiastic about Britain's prospect of striking a unilateral trade agreement, but concedes that it will be "limited" in scope and that, as the larger economy, Trump holds the whip-hand in negotiations.

The focus of such a deal will be on services rather than goods, trade rules and regulations rather than tariffs.

Theresa May's government trumpets the opportunity thrown-up by Brexit and the election of Donald Trump, but in truth Britain will have to dance to a US tune if it wants a trade deal - the US won't feel inclined to dance to ours.