I always get nervous about asking people to ‘pick a side’. Sometimes you need to, but then it has also been my experience that when you do force them to pick a side they don’t always pick the one you want them to.
Trump wants us to pick a side, him or China. Or, more accurately, choose his specific global economic order in which we are explicitly subservient to the US and reject any other form of global economic order at all.
I am watching as the ‘brave, liberal defenders’ of Britain (its centrist politicians, its diplomats, its think tanks) all conclude the correct answer is ‘so, Mr Trump, where should I lick first?’. The answer to this is not obvious to me, because there appear to be three broad options and they’re all a long way short of ideal. This is why I want to propose a fourth option.
Option one is that we just bend down and get on with the licking. In this version we do what Trump wants, cut ourselves off from anyone who is economically competitive with the US, stop regulating US products (especially social media platforms) and basically accept our position as a non-voting State of the USA.
Option two is to kid on that Europe is a credible defence against this. In this version we rejoin the EU, achieve the sudden, phenomenal economic growth which is ‘bound’ to result and then, as a continent, we stand united in the face of Trump’s aggression. I’m afraid that at every stage this is basically delusional. Europe is closer to an economic basket case that can’t defend itself than a powerhouse, and it is fragmenting more than it is a unified, powerful player in the global economy.
Option three isn’t discussed. Here we just say ‘the US is going nuts and its exports are both expensive and hardly essential, whereas China produces everything we need cheaper, better and with less domestic political interference’. This too has elements of myth and there are clear risks to anyone hanging out with an authoritarian regime. But it isn’t as fantastical as the ‘strong, united EU’ route.
And so our nation, so long contorted by the impact of US financial and military interference in our domestic politics, takes its perpetual path of least resistance and sets up working groups to work out how to make frantic licking not look like frantic licking.
This isn’t the view from more considered heads in the US itself. In a New York Times analysis today the conclusion was basically that this could ’tilt the economic order in China’s favour’. And that, whisper it, is because that would be the logical thing to do. Really, in sheer economic theory and practice, you’d ‘choose China’.
I rather feel that Silicon Valley’s tech bros have a more threatening agenda in relation to me and my political views than China does
Why? Put simply, there is now a global market for goods and services. The UK is well equipped with services – it’s the only area of our economy where we’re a strong net exporter. But we’re hopelessly exposed on goods. We don’t even nearly begin to produce enough of the fundamental goods that we need in the modern world.
Some of them we simply don’t have the ability to produce. We have no deposits of many of the rare earth minerals required by modern technology and we will import those like it or not. And there are industry areas where we’re so behind the game we aren’t going to catch up. The US can try and repatriate mass-scale silicon chip manufacture, but Britain can’t.
So who has all these mineral resources and who is making the stuff we need now at a credible technological level? China is. It’s not just the vast mineral resources China itself has and it’s not just cheap labour, it’s proper planning by China.
First, while America was travelling the world building military bases everywhere, China was travelling the world signing up exclusive rights to other nation’s minerals – at a fair and reasonable price and without invading anyone. It used cheap labour to gain a substantial lead in fields which are about a lot more than cheap labour – from solar to batteries to chips, it used the boost from cheap labour to establish itself in high-strategic-value industries.
And it’s good at this because it’s hungry. We need solar panels more than social media – and China has cut the cost of production by 85 per cent, as much through technological innovation as cheap labour. It is China that is revolutionising battery technology, not the US. China doesn’t have a ‘chip advantage’ because of cheap labour (chip manufacture is largely automated) but because of bold, early investment.
Any illusion that the US is the great innovator of our era because of its free market capitalism is kidding themselves on. It’s a piss poor innovator (given the size of its economy and scale of investment) precisely because of its free market capitalism. The biggest US export by miles isn’t a product but the Dollar. The US is all about rent-seeking, not innovation. Last week’s Deep Seek AI bombshell ought to put the myth of US innovative advantage to bed.
You can now give me the official Nato line about how mean and horrible Beijing is and how I shouldn’t give them my data. I keep asking myself though, what is Beijing going to do with my data that I should be so worried about? Using it to manipulate me or change my political view? I rather feel that Silicon Valley’s tech bros have a more threatening agenda in relation to me and my political views than China does.
It’s not that I’m not paranoid about who can manipulate me, it’s that I am no less paranoid irrespective of which autocratic billionaire or regime you’re particularly thinking about. And I’ll tell you this; if I was honest and I could get the help and advice of an industrialist to push forward Scotland’s economy, he or she almost certainly wouldn’t be American.
We would only work with trading partners who are trading partners and not tyrants telling us how to run our economy
No, I don’t want to move deep into China’s political orbit. That’s why I said I think there is a fourth option. I’m going to call it ‘don’t align, be swift and nimble, open but strong’. It would involve three particular approaches. First, we would ensure that national security was insulated from trade decisions. If we need to compromise our domestic economic interests for help and protection then we’ve done something wrong.
Strong domestic security arrangements along with a process of de-Americanising European defence is key. Remember, if we’d followed the path the EU had wanted to in 1992 we’d now be in an economic and security union that included Russia whom we’d be gradually drawing towards Western social democracy. The humiliation and punishment beatings we inflicted on Russia instead were demanded by the US.
If we believe we need the US to save us (from what? – the US looks like the major threat…) then we’ll sacrifice our economic self-interest to the US. That is stupid. And it leads to the second point, economic security. In my model we’d have a domestic industrial strategy which revolved around resilience.
Scotland won’t ever be entirely self-sufficient, but we can be much, much more self-sufficient than we are. Food, construction materials, energy, fabrics, bioplastics and well-manufactured consumer goods are all realistic possibilities for Scotland if they are placed in the right economic framework. We could build up whatever capacity we wanted, so long as we were willing to make clear choices (and potentially accept some sacrifices).
And of course at the heart of this, if we were sane would be zero waste. You only need access to endlessly-expanding amounts of rare earth minerals if you keep throwing the last lot you imported into the bin. Don’t want to be ‘trapped by Trump’? Learn to repair things.
Beyond that, we would trade according to our interests and no-one else’s. We would have a national strategy of ensuring that we were never trapped to individual markets. If the US doesn’t want our whisky, we need to develop new markets. If the US won’t sell us a technology, we must make sure we can get it elsewhere.
And if anyone gives us a demand that our relationship with them should be exclusive, we would then be in a position to tell them no. Put simply, we would decide not to be subservient, or at least not to a single master. We would only work with trading partners who are trading partners and not tyrants telling us how to run our economy.
This package of measures isn’t going to be put in place overnight, even if we decided to start it seriously now. But it will never, ever be in place if we don’t decide to put it in place. And make no mistake; we are not anywhere near the end of US unpredictability and chaos. This is going to keep happening. Biden was doing this shit too, just less aggressively.
If we were looking at our economic interests just now and we were being honest and cynical, we’d be running into the arms of China so long as Trump is on the other side blowing things up. Of course there are very good reasons to be wary of China, but are they worse than our reasons to be wary of the US?
Or, let me put it another way, if you keep telling yourself over and over ‘its a special relationship, it’s a special relationship’ and so you can see nothing but to accommodate the demands of the other half of the relationship no matter how volatile or stupid, you are not acting in the national self interest.
It is time to escape this trap. After all, it was (probably) Henry Kissenger who said: "It may be dangerous to be America’s enemy, but to be America’s friend is fatal". If we don’t learn that lesson in this round of aggressive, bullying American exceptionalism, we will end up with the economic outcomes we deserve.