Peter Mandelson to be made Britain's new ambassador to US, ITV News understands

File photo dated 02/02/24 of Lord Peter Mandelson at St Mary the Virgin church in Primrose Hill, north west London. The UK needs to transform itself into a high investment economy to shift out of its low growth "doom loop", Lord Peter Mandelson claims, adding that he will will hit out at "persistent underinvestment". Issue date: Thursday October 10, 2024.
Credit: PA

Peter Mandelson’s appointment as ambassador in Washington will be announced tomorrow, ITV News understands.

Sources say Sir Keir Starmer has chosen the former Labour business secretary because of his “expertise in trade” and “political ability”. The PM wants him to start as close as possible to Donald Trump’s inauguration in January.

This is likely to be something of a blow to the current ambassador Karen Pierce, who is widely seen as having nurtured a constructive and “good” relationship with the Trump team.

Mandelson will have a difficult time persuading Trump and his team to drop their mercantilism. Credit: PA

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The ramifications are significant, in that Starmer is signalling his hope that some kind of a trade deal can be struck between the UK and Trump’s America. However, trade experts caution this may be naïve, for two reasons.

First, any actual trade deal may damage Starmer’s parallel ambition to improve the terms of trade with the EU’s single market, especially in agriculture and veterinary products.

Starmer thinks he can have improved terms of trade with the EU and US. Almost no one agrees with him. Second, Trump is an advocate of tariffs and protectionism – not free trade. Mandelson will need all his persuasive skills to convince Trump and his team to drop their mercantilism. What is also striking is the rise and rise of the unreconstructed Blairites within Starmer’s team – with Pat McFadden hugely powerful as Chancellor of the Duchy of Lancaster, Jonathan Powell as National Security Adviser and Mandelson now the UK’s most important diplomat. The band is back together.

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