JD Vance dangling a UK-US trade deal looks good on paper – but at what cost?

An agreement with America would benefit Britain’s economy in the long-run, writes Sean O’Grady. But there is a risk that we will move further away from the EU market – and inadvertently adopt more of their culture

Could Sir Keir Starmer be about to seize the Holy Grail of Brexit? Become the Sir Galahad of our times? Succeed where Theresa May, Boris Johnson, Liz Truss all failed, seal the single most precious of all the Brexit benefits – and gain the thanks of a grateful nation?

The vice president of the United States, JD Vance – a man not given to sentimentality towards loyal allies – has said as much.

Making full allowance for the chaotic comms of the Trump administration, there seems to be some cause for optimism in his latest remarks. Let’s luxuriate in their unusual warmth: “We're certainly working very hard with Keir Starmer's government. The president really loves the United Kingdom. He loved the Queen. He admires and loves the King. It is a very important relationship. And he's a businessman and has a number of important business relationships in [Britain].

“But I think it's much deeper than that. There's a real cultural affinity. And, of course, fundamentally, America is an Anglo country. I think there's a good chance that, yes, we'll come to a great agreement that's in the best interest of both countries.”

“Anglo country”? Let’s just excuse JD for not being quite so up-to-date on modern multicultural Britain – and rejoice in the prospect of hitching ourselves to the most dynamic economy in earth (despite Trump’s best efforts to switch it to autarky).

We would, in principle, see the latest and prospective prohibitive tariffs on cars, pharmaceuticals, steel and the 10 per cent “baseline” import tax all dropped, and greater market access for goods and services than ever before. The US is already a substantial trade partner – second only to the European Union – and, at least until Trump got in, was the fastest growing of the major advanced economies. It could not fail but to make the UK better off.

But there would be a price. Trade deals may be mutually advantageous in the long-run, as economic theory and happy experience demonstrate, but there are always winners and losers, and Britain’s losers would be many, and sometimes grievous. The Americans would demand a lot.

A worst case scenario might be as follows: UK farmers would not be able to compete with US producers of grains, meat and poultry. British consumers would have the notorious chlorine-rinsed chickens in the supermarkets – cheaper, but not so hygienically reared and with a slightly higher risk of food poisoning.

There’d also be hormone-treated beef, genetically modified bread and cereals. On our streets, we’d be obliged to relax our regulations and CO2 targets to permit more American supersized vehicles to be sold, as well as giving some of Elon Musk’s Teslas a competitive advantage. The NHS would be required to pay much more for drugs – a key consideration for Trump, who feels US pharma companies have been cheated. And because Trump doesn’t understand VAT, we’d also have to make US imports free of it.

Aside from that, on a “maxi” deal, the British would be asked to get rid of the various discrimination legislation in place and make it lawful once again to incite racial hatred – online and elsewhere. Regulations on artificial intelligence and digital industries would need to be acceptable to Washington (ie, harmonised to favour the tech oligarchs). The digital services tax, worth £800m to the Treasury, would need to be ditched, with predictably depressing consequences for run-down high streets. And the UK defence budget would have to be rapidly doubled – no doubt a wise move in troubled times, but at some cost to public services.

The new Anglo-American economic alliance would also mean the British would correspondingly be less able to get closer to the EU, our closest market, and that would also be a serious downside. The Brexit “reset” probably wouldn’t happen.

Indeed, there may be even more that the British would be asked/forced to sacrifice to have the unique honour of getting to the front of the queue (or “line” as they say) and becoming the European arm of this great superpower. It would undoubtedly boost British economic growth and living standards.

We’d be richer in the long-run, but we’d also lose a great deal if our society began to resemble even more America’s polarised “two nations”. We could be wealthier but in every other respect, a less healthy, more brutal and even less harmonious country.

Maybe we should leave the Holy Grail a delightful, fantastical mystery after all...