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Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. Welcome to the City

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Speaker 1: of London, the City of the City.

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Speaker 2: The City of London.

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Speaker 1: Then please mind the gap between.

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Speaker 3: The true and the platfor the financial hearts of the country,

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Speaker 3: the city, the city.

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Speaker 2: Welcome to in the city, stand clear of the doors.

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Speaker 1: So what does a Trump victory mean for UK US relations?

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Speaker 1: So welcome to the City of Podcasts from Bloomberg about

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Speaker 1: the story is important to the City of London. I'm

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Speaker 1: Francis Laqua and I'm Alecrostratton, and I like where the

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Speaker 1: relationship between the US and the UK has really always

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Speaker 1: been described as a special one.

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Speaker 2: Yeah, and people just keep redefining special. It's like sometimes

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Speaker 2: it's showed shoulders something. Times it's Blair and Bush with

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Speaker 2: them with you know, hands in pockets.

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Speaker 1: And so we have this new special relationship like gran

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Speaker 1: in the hands of Donald Trump and Prime Minister Cure Starmer.

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Speaker 2: Yeah, they have to redefine it for yet another generation.

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Speaker 2: It's going to be very, very challenging for Kirs. Darmer

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Speaker 2: his team have made big efforts to reach out to

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Speaker 2: Trump's team. Let's see how they now work in practice.

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Speaker 2: But I think you have to credit them with the attempt.

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Speaker 2: I would not get too head up on the one

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Speaker 2: hundred labor activists going over to America's campaign. I think

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Speaker 2: it was ill advised, but it's happened. I think now

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Speaker 2: the question is how the UK navigates the threat of tariffs.

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Speaker 1: Yeah, I think it's undeniable and agree that the UK

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Speaker 1: probably needs the US some kind of special relationship. So

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Speaker 1: how could this new relationship change given the new leadership

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Speaker 1: on both sides of the Atlantic. That's the question we'll

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Speaker 1: try to address on today's show. And we're lucky enough

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Speaker 1: to be joined by Sir Nigel Shinwald. He has served

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Speaker 1: US for an policy and defense advisor to the Prime

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Speaker 1: Minister from two thousand and three to two thousand and seven,

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Speaker 1: and then he be the UK Ambassador to the US

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Speaker 1: from two thousand and seven to twenty twelve. Ambassador Seinedvaul,

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Speaker 1: thank you so much for joining us. I mean, it's

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Speaker 1: a pretty extraordinary political comeback, probably the biggest surprise in

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Speaker 1: recent history. What do you attribute that to?

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Speaker 3: Well, he has an amazing campaigning style and record now

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Speaker 3: and feeds into this selfishness and insularity in many publics

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Speaker 3: around the developed world since the recession and probably enhanced

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Speaker 3: by enhanced by COVID and fanned by social media. So

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Speaker 3: it's a different political and media world from the one,

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Speaker 3: and we have completely adjusted to that reality. We see

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Speaker 3: a version of it here in Europe, here in Britain

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Speaker 3: and elsewhere in Western Europe. And it's true that in Europe,

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Speaker 3: unlike in twenty sixteen, there are a few countries where

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Speaker 3: the dominant party is on the populace right. So things

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Speaker 3: have changed. Europe is still in a different position where

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Speaker 3: the traditional right is still mostly in charge or traditional

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Speaker 3: left parties. You know, this is a wake up call

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Speaker 3: to everyone in the center of Democrat politics.

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Speaker 1: But is this really a love of Trump policies maybe

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Speaker 1: going towards more masculine traits for you know, the young white,

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Speaker 1: but even lautin on black voters, or is it a

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Speaker 1: repudiation of the Harris message, especially in these northern industrial

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Speaker 1: states known as a blue one.

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Speaker 3: I think it shows that the economic and social issues

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Speaker 3: trump the political Trump trump the political ones for the

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Speaker 3: time being. So among Democrat voters, the issue of democracy

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Speaker 3: and the future of democracy clearly was a big issue

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Speaker 3: that it doesn't seem to have been a big issue

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Speaker 3: for the rest of the public. So the fact for

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Speaker 3: me that the Democrats, you know, lost on the economy,

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Speaker 3: and lost big on the economy, and weren't able to

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Speaker 3: make more of the fact that the US economy has

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Speaker 3: recovering and is in many is in any cases now

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Speaker 3: and in future in a very position, something we in

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Speaker 3: Europe rather envy. I think that ultimately is what lost

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Speaker 3: to the race, and the fact that immigration was never

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Speaker 3: a subject on which the Democrats were trying to be

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Speaker 3: competitive because of her personal weakness on that subject and

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Speaker 3: because the Trump and the Republicans had bagged that as

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Speaker 3: an issue. I'm reluctant to go into the detail of

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Speaker 3: mail voters and all the rest of it. I don't

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Speaker 3: know that will hold up in the end. I'm sure

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Speaker 3: there's something in all of that, but I go back

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Speaker 3: to fundamentals that Kamala Harris as a campaigner did much

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Speaker 3: better this time in twenty twenty. But she's not a

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Speaker 3: star performer, and there are weaknesses in her offering to

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Speaker 3: the to the public, which meant that there was a

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Speaker 3: sort of limit to how far she could go. And

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Speaker 3: it's a surprise today because the over the weekend polls

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Speaker 3: looked much more balanced. But at this time last week,

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Speaker 3: I think most people were looking at this sort of

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Speaker 3: victory for although not in the popular vote. I think

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Speaker 3: that's the big surprise that he came through so strongly

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Speaker 3: across the country.

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Speaker 2: I mean, you're right, You're right, Nigel. The inquest is

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Speaker 2: already starting on the Democrat side. Some people this morning

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Speaker 2: saying this is this is more difficult for them to

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Speaker 2: process and digest than the Clinton loss. It is similar

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Speaker 2: in terms of these questions around is America ready for

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Speaker 2: a female president and so on, questions we can't answer

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Speaker 2: or hope to answer right now. But what's your sense

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Speaker 2: of whether there was anything they could do up against Trump?

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Speaker 3: I think the best chance would have been Biden doing

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Speaker 3: what he said, what he hinted he would do in

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Speaker 3: twenty twenty, and that is making clear halfway through his

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Speaker 3: term that he wasn't going to stand again, and having

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Speaker 3: a genuine competition among Democrats for who might come through.

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Speaker 3: And I don't think it's necessarily the case that Kamala

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Speaker 3: Harris would have done. I mean, it was a it

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Speaker 3: was a dune deal in July. The only way to

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Speaker 3: salvage the situation in July was to put his vice

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Speaker 3: president upfront. But you know, plainly there are others themselves,

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Speaker 3: largely untested on the on the biggest stage, who might

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Speaker 3: who might have come through and developed a rapport with

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Speaker 3: the American people be able to deal with Trump. But

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Speaker 3: I repeat, he's clearly exceptionally difficult to deal with on

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Speaker 3: the campaign trail. And you know what's extraordinary this time

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Speaker 3: is more what has happened in between. And if you

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Speaker 3: go from the sixth of January today, that's the that's

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Speaker 3: that's the the issue which founds Europeans and many others around.

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Speaker 2: The world, and that's that's why people are feeling it

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Speaker 2: is more challenging to the Democrat mindset than the Hillary

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Speaker 2: Clinton loss, because then it was, well, shucks, what you're

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Speaker 2: going to do. You're up against a famous TV presenter,

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Speaker 2: is so so, you know, fresh and direct and all

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Speaker 2: of this, whereas now it's you know, he has been

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Speaker 2: in court as much as he's been on the campaign trail,

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Speaker 2: and yet still this this clear victory.

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Speaker 3: Yeah. Absolutely, I mean, I think that most of the

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Speaker 3: things which have been proven in court cases, whether they've

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Speaker 3: been tried or just initiated. People sensed about Trump in

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Speaker 3: twenty sixteen and twenty twenty as well. It's true that

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Speaker 3: there's much more on the record than the more, but

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Speaker 3: they sensed this about him. They you know, it was there,

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Speaker 3: and the public you know, deliberately shows those who voted

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Speaker 3: for him twenty twenty, the victory in twenty sixteen, They

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Speaker 3: shows someone with that sort of character fundamentally different from

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Speaker 3: the presidential character that you traditionally associate with, you know,

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Speaker 3: with the with the US. The other thing I'd say is,

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Speaker 3: you know, the Hillary Clinton was winning clearly, winning by

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Speaker 3: a month out in twenty I mean, Kamala Harris was

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Speaker 3: never clearly in the lead extended period. She was always

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Speaker 3: coming from behind Nidel.

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Speaker 1: What does this all mean for allies of the US?

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Speaker 1: So again, because Donald Trump will have a cinemajority, he'll

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Speaker 1: probably easily clear his nominees the cabinet for the FED

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Speaker 1: and so policies will be implemented as he wants them.

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Speaker 1: What does that mean for the UK US relationship?

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Speaker 3: Well, I'm going to take one step back and just

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Speaker 3: go back to the last time round him, and I

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Speaker 3: agree with you. The implication of your question is that

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Speaker 3: there was a different type of cabinet officer last time,

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Speaker 3: and that's true. There were grown ups around in the

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Speaker 3: first term, Rex Tillerson, General Mattis, people in the National

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Speaker 3: Security Advisor slot who had a great deal of experience

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Speaker 3: and for much much more of the political experienced political center,

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Speaker 3: fair enough, but when it came to the big decisions,

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Speaker 3: they didn't actually get Trump to change his views. Even

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Speaker 3: his daughter didn't get him to change his views on climate.

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Speaker 3: He went ahead with his recognition of Jerusalem, he got

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Speaker 3: out of the IARM Deal, his confrontational stance on many issues,

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Speaker 3: and denigration of many European leaders and of NATO. That

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Speaker 3: all went on. Admittedly he didn't leave NATO, and certainly

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Speaker 3: that's going to be the case for the future. That

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Speaker 3: will be a battle for in the months ahead. But

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Speaker 3: for the UK government you've seen already some inkling of

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Speaker 3: how they'll try to deal with this to some degree

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Speaker 3: with his own base, Kirstan was taking a bit of

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Speaker 3: a risk by having dinner for two hours with Trump

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Speaker 3: in New York a couple of months ago, but that

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Speaker 3: was absolutely the right thing to do, as it was

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Speaker 3: for David Cameron to try and talk Trump through Ukraine

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Speaker 3: a little bit earlier in the year. So I think

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Speaker 3: that is right, it's inevitable that they should try, but

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Speaker 3: particularly with the prospect of a Trump unbound and fewer

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Speaker 3: balancing voices in the administration around him, and a much

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Speaker 3: more vengeful Trump than was the case in twenty In

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Speaker 3: twenty seventeen, I think that you know that here in

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Speaker 3: the UK and around the rest of Western Europe, people

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Speaker 3: have got to be a little bit cautious and careful.

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Speaker 3: I think of the leaders who tried to deal with

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Speaker 3: him last time around, the one who emerged with the

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Speaker 3: greatest credit was Angela Merkel. She wasn't openly hostile, but

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Speaker 3: she just stepped back a bit and said, look, I'm

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Speaker 3: not going to play the game of romance. So I

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Speaker 3: think an element of distance is correct working out our

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Speaker 3: own interests, and the big fundamental issue for the UK,

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Speaker 3: I think is accelerating our reset with Europe. There are

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Speaker 3: some political constraints on that, inevitably after the Brexit decision

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Speaker 3: eight years or so ago, but that I think is

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Speaker 3: where he's going to put Kistarman needs to put his

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Speaker 3: foot on the accelerator, and particularly in the defense and

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Speaker 3: security area, really work much more closely with the other Europeans.

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Speaker 2: You talk deliquently about the diplomacy and the politics, but

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Speaker 2: what about the economics. I mean, this morning feels to

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Speaker 2: me like a very expensive morning for the UK because

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Speaker 2: you've got you know, we had a budget last week

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Speaker 2: and she hasn't she the Chancellor hasn't got much headroom.

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Speaker 2: And yet we now know that we are more likely

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Speaker 2: to have tariffs. Of course, the exact nature of them

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Speaker 2: is now you know, to be seen, but that will

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Speaker 2: be expensive for the UK unless we're very lucky. And

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Speaker 2: then secondly, he Donald Trump will want an increase in

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Speaker 2: defense spending and I don't see that they've got the

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Speaker 2: space to be able to do that increase.

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Speaker 3: Well, they're going to try and do some increase in

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Speaker 3: penn Svan George Robertson, as you know, is doing this

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Speaker 3: Defense review which will be published early next year, and

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Speaker 3: it's inconceivable that he won't recommend some form of defense.

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Speaker 3: They've trying to do a little bit more already in

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Speaker 3: the in last week's pod. Yet I agree it's a

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Speaker 3: hugely constrained area and with so many other demands which

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Speaker 3: are higher on people's agendas, health and education and all

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Speaker 3: the rest of it, that is going to be a

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Speaker 3: scrap inside government of course, you know, defense spending, by

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Speaker 3: comparison with the other big demands on public services, you know,

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Speaker 3: is a more manageable entry. But I agree with your

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Speaker 3: your your fundamental point. But the UK already is spending

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Speaker 3: about two and a half percent of GDP on defense,

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Speaker 3: so we're not the ones most in the American spotlight.

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Speaker 3: And I agree with you on tariffs. Obviously, I think

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Speaker 3: he will pick and choose on tariffs. He will try

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Speaker 3: and divide and rule and cause a great deal of

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Speaker 3: disunity and trouble within the European pack. I don't know

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Speaker 3: whether we would therefore be given a little bit more leeway.

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Speaker 3: I just don't know. I agree with you that the

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Speaker 3: net result of any tariffs is going to be bad,

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Speaker 3: actually for both sides, will be bad for the American

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Speaker 3: consumer and the American public as well as as well

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Speaker 3: as for US. But I think that's an area where

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Speaker 3: he does have some flexibility and there will be an

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Speaker 3: element of differentiating which, you know, which in the Trump

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Speaker 3: world is bound to be fairly erratic and personal and

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Speaker 3: aggressively and aggressively done.

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Speaker 1: What's the right way of dealing with Donald Trump. So

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Speaker 1: one of the first things he said that you know,

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Speaker 1: he would do as president would be to negotiate a

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Speaker 1: peace deal with Russia on Ukraine. How does the Prime

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Speaker 1: Minister Starmer deal with that?

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Speaker 3: Well, I think the broad answer to the question and

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Speaker 3: is respectfully and working out how to argue these cases

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Speaker 3: according to American interests as well as well as our own.

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Speaker 3: You've got to present it to him as being not

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Speaker 3: just the sort of European morally better choice, but it's

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Speaker 3: having a positive impact on American interests. And I think

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Speaker 3: you can explain that that no one is against ultimately

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Speaker 3: doing a deal which ends the war. But I think

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Speaker 3: you'll find that any sort of balance deal is going

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Speaker 3: to be a very difficult with the Ukrainians. We all

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Speaker 3: know that. But I'm not sure that he's correctly calculated

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Speaker 3: if he thinks he can do it in a day

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Speaker 3: what the Rushia would, because there's no sign that for

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Speaker 3: putin anything other than abjects surrender by Ukraine is on

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Speaker 3: the cards in terms of his own political position. And

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Speaker 3: I think you know, kids Starmer and others will have

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Speaker 3: to explain to Donald Trump, and I'm sure there'll be

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Speaker 3: lots of in the US too explained to him just

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Speaker 3: how toxic that would be for American positions and reputations,

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Speaker 3: whether or not they want to be a leading player

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Speaker 3: in future NATO or whatever. But I think it will

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Speaker 3: just affect his leadership position in the world, which I

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Speaker 3: think in a sort of way he wants. He wants

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Speaker 3: to have it both ways. He doesn't want to have

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Speaker 3: people saying we don't care about you, you're not a leader.

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Speaker 3: He likes the attention, likes to be deferred to. And

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Speaker 3: I think we've got We've got to try our best

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Speaker 3: to do two things. Number one, increase the European contribution

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Speaker 3: on to NATO and to Ukraine. Assume more of even

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Speaker 3: more of the leadership. Actually it's about half and half today,

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Speaker 3: it's not all America, so we need to do more

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Speaker 3: of that. But at the same time, keep America in

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Speaker 3: the game for the long run. And if they are

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Speaker 3: negotiating with Russia, do it in conjunction with NATO allies

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Speaker 3: and with Ukraine above all with Ukraine itself, and try

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Speaker 3: and try and work out the best, the best the

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Speaker 3: way through are genuinely acceptable deal in terms which Trump

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Speaker 3: himself might might might understand and warm to.

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Speaker 2: I mean, Nigel, with with your with your with your

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Speaker 2: diplomatic ambassadorial hat on. People have been saying the first

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Speaker 2: press conference between a convicted president, if that's the sort

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Speaker 2: of way to put it. But you know, the Starmer,

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Speaker 2: prime minister who used to be in charge of the

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Speaker 2: CPS standing shoulder to shoulder with Donald Trump at a

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Speaker 2: press conference. We don't know when it will happen. It

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Speaker 2: maybe not be for a very long time, but it

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Speaker 2: will come. You know, the journalists on that day will

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Speaker 2: have a field day sort of trying to point up

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Speaker 2: the differences in disposition and character and so on. But

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Speaker 2: do you think there is a credible relations special relationship?

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Speaker 2: Do you think you know there is a there is

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Speaker 2: a you know, Prime Minister Starmer making himself If not

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Speaker 2: genuine friend of President Trump, then then useful.

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Speaker 3: I think useful. Yes, I think it's unlikely to be

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Speaker 3: a genuine friend of Donald Trump. I don't think Boris

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Speaker 3: Johnson was that.

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Speaker 2: It was a complicated relationship, Boris and brilliant.

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Speaker 3: It was close. And I think that that there's there's

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Speaker 3: every chance that Kirs Starmer will be listened to. He's

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Speaker 3: going to be in power for five years. He's in

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Speaker 3: a very stable position himself. He's not of the same

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Speaker 3: political persuasions as Trump by any means, but I think

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Speaker 3: he he's a centrist and I don't see any reason

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Speaker 3: why they shouldn't have a good working relationship. When the

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Speaker 3: term special relationship is used, it's supposed to mean more

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Speaker 3: than that. It's supposed to mean that each side sort

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Speaker 3: of picks up the phone on a regular basis, that

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Speaker 3: there's an underlying or appor on values and the sort

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Speaker 3: of worldview. That's much more difficult with Trump in any case,

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Speaker 3: I would say the specialness of the special relationship historically

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Speaker 3: has been waiting for his heyday under Churchill those years ago,

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Speaker 3: and Brexit has changed it. That has made the UK

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Speaker 3: a less consequential a life of the United States, less

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Speaker 3: able to perform that bridging rule. So things are changing

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Speaker 3: anyway in the overall, regardless of the personalities.

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Speaker 1: It's very difficult, I guess, to you know, think about

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Speaker 1: the special relationship. If we start by saying that Donald

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Speaker 1: Trump wants only loyalists in the cabinet, you wonder whether

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Speaker 1: his allies need to also be one hundred percent loyal

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Speaker 1: to the Trump policeason the Trump agenda, and then it

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Speaker 1: includes how to deal with China, how to deal with

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Speaker 1: even you know in North Carolina direction.

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Speaker 2: And I think that's right Brant, and we are we

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Speaker 2: are unclear at sitting in London right now, which way

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Speaker 2: for instance, Ed Milliband will come down on that question

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Speaker 2: of tarifs on Chinese cars where the Europeans have been

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Speaker 2: very clear and Donald Trump will be wanting to see

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Speaker 2: clarity in firmness. I think for me, you know clearly,

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Speaker 2: remember it wasn't long ago when President now President elect

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Speaker 2: Trump then candidate Trump was you know, he understands politics

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Speaker 2: and power and as you say, Nigel, he could see

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Speaker 2: that kiss Armer had got a thumping majority. So lots

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Speaker 2: and lots. But I think that the wrinkle for me

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Speaker 2: is if you look at the fights that have then

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Speaker 2: forget about one hundred labor activists going over to the

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Speaker 2: States in the war over the battle, the legal battle

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Speaker 2: about whether that was very long, the Elon Musk and

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Speaker 2: the fact that kiss Armer and Elon Musk are you

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Speaker 2: know at loggerheads. That I think is troubling.

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Speaker 1: But I guess the question is, you know, in Nigel,

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Speaker 1: what does the UK need the US for? Right? Do

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Speaker 1: they just need to make sure they don't make an

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Speaker 1: enemy of Donald Trump? Or do they actually need active

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Speaker 1: policies for the UK. And what does that mean for

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Speaker 1: the UK's foreign policy agenda.

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Speaker 3: Well, Brexit means the whole terms that in foreign policy,

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Speaker 3: in the world, insecurity, the United States has become more

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Speaker 3: important to the UK than ever before. I'm afraid the

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Speaker 3: bare fact, you know, we've severed our institutional links with Europe.

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Speaker 3: We're trying to rebuild them very very slowly at the moment.

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Speaker 3: So I think America looms looms larger as a result

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Speaker 3: of our own decision in twenty sixteen over the EU.

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Speaker 3: So it remains important to us. It's always been in

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Speaker 3: ourn equal relationship in many ways. So I think he

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Speaker 3: has to stick at it and will stick at it,

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Speaker 3: as he's shown already. And no doubt Alegra's right that

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Speaker 3: in front of the microphones and the press corps, you know,

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Speaker 3: that would be uneasy to some degree. But I'm sure

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Speaker 3: chist On will just say I have to deal with

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Speaker 3: the president the public elects. And he's been very, very

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Speaker 3: sure footed, you know that, despite the misstep of the

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Speaker 3: of the Labor Party a few weeks ago in making

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Speaker 3: that announcement. I think they'll get over that very very fast.

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Speaker 3: But operationally it does depend a bit on the Cabinet office.

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Speaker 3: The cabinet members are, you know, the relationships down the

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Speaker 3: line with the Foreign Secretary of the Foreign Office, Treasury,

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Speaker 3: and all the rest of it. And that may be

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Speaker 3: much more difficult with the sort of people that Trump

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Speaker 3: may put in to these to these roles. The role

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Speaker 3: of National Security Advisor is that in that full current

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Speaker 3: position in the administration, linking up with number ten in

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Speaker 3: a in an idequal world. And you know, the person

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Speaker 3: doing that role, if they don't have a natural sense

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Speaker 3: for working with allies and consulting people and giving people

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Speaker 3: their heads up, that's going to be highly problematic.

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Speaker 2: Yeah, I mean, it's sort of in turns funny and

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Speaker 2: also very very concerning the kind of Elil Musk gist

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Speaker 2: of a sort of war of words that we start

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Speaker 2: started over the summer, over the over the riots, and

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Speaker 2: then since are sort of morphed into Musk has clearly

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Speaker 2: taken it upon himself to call out a number of

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Speaker 2: things that the labor activists and labor say against the

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Speaker 2: backdrop of David Lammy manfully, you know, putting a lot

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Speaker 2: of effort into building bridges with Trump and the Trump team.

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Speaker 3: Yeah, and JD. Vans and all the rest of it.

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Speaker 3: And no, absolutely, Look, I mean Musk and Kennedy. Know

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Speaker 3: the idea of Kennedy is the American health Secretary or

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Speaker 3: healthsar that should you know, legitimately strike flear into into

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Speaker 3: people's hearts. So we'll see where he goes with those two.

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Speaker 3: I mean, I let's see. I can't quite see on

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Speaker 3: Mass sitting in an office dutifully being a cabinet member.

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Speaker 3: But you know we can. We've been supported where he is.

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Speaker 3: He won't do that.

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Speaker 2: He'll do it in his own way, and that's even

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Speaker 2: more worry almost better if he did sort of you know,

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Speaker 2: put on a suit and do what he's told. But

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Speaker 2: if he if he does a job, then he'll probably

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Speaker 2: do it in a Nelon Musk way.

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Speaker 3: Yeah, probably do it from space, I think that's what.

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Speaker 1: Yeah, no suits, different type of suit. Yeah, nije for

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Speaker 1: thank you so much for joining us. Thank you, thanks

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Speaker 1: for listening to this week's in the City from Bloomberg.

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Speaker 1: This episode was hosted by Meat Franci LaQuan with Legra Stratton.

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Speaker 1: It was produced by Summer Saudi, production support from Moses

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Speaker 1: and Dam and sound designed by Blake Maples, Britain. Francis

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Speaker 1: Newman is our executive producer. Women