Brexit Re-set now focused on Ukraine today, and tariffs tomorrow

Introduction

Keir Starmer’s desire for a re-set of the UK’s relationship with the EU has ceased to be a two-dimensional, bilateral discussion with EU negotiators. It has become a four-dimensional one, now including the Ukraine and US trade tariffs.

Starmer has already started trying to position himself as a middleman and honest trader between the USA and the EU on Ukraine and tariffs.¹

However, it is hard at present to see how conflicting interests can be reconciled such that a better trading relationship comes to exist with the EU without the UK falling into the net of US tariffs.

Where are the negotiating lines were drawn

The negotiating lines had become a little clearer over January and February, and were broadly in line with my previous piece: reduction of trade friction for the UK in exchange for fishing rights in UK waters for the EU, free movement for EU nationals under 30, and the UK bolstering EU defence by joining PESCO.² ³ That would be akin to a 3-1 defeat for the UK.

It has since come onto the table that the UK negotiators have accepted alignment with EU food safety standards, known as a Sanitary and Phytosanitary or SPS agreement, as a prerequisite for a reduction in trade friction on agricultural products.⁴ That moves it to a 3.5-0.5 defeat for the UK.

The terms on which this alignment is planned to take place have infuriated Brexiteers: it involves extending the ultimate jurisdiction of the European Court of Justice into further subjects and areas beyond Northern Ireland.

Labour’s war on agriculture

The scale of the defeat for the UK may even turn out worse as the Labour government has in parallel launched a war against UK agriculture:

Imposing inheritance tax on farmland where previously it was exempt, threatening the sustainability of family-run farms;⁵
Granting approval for the decommissioning of farmland in favour of the construction of solar panels.⁶ This overturns the statement by the previous government that solar panels should not be built on good agricultural land;⁷
The government granting itself the power to compulsorily purchase land at its value without planning permission for housing, rather than the much higher value it would have – known as the ‘Hope value’ – if it did have that permission;⁸
Closing the Sustainable Farming Incentive scheme to new applications, this being part of a package of payments that replaced the EU’s Common Agricultural Policy.⁹

The upshot appears to be the closure of hundreds of agricultural businesses.¹⁰ This not only threatens the UK’s food security, but begs the question of how much agricultural product will remain available to be shipped into the EU, even if trade friction is reduced. Labour’s war on farming could result in exacerbating the UK’s defeat on this ‘EU Re-set’ to 3.75-0.25.

JD Vance changed the frame of reference

The JD Vance speech at the European defence summit in Munich has been seen as a watershed in the US’ relationship with Europe as a whole, including Russia.¹¹

The situation is now evolving hour-by-hour but the key points for the UK/EU Re-set are:

The UK agreed to increase defence spending to 2.5% of GDP from April 2027.¹²
Starmer is attempting to construct a ‘coalition of the willing’ of countries willing to commit armed forces to a peacekeeping mission should a peace deal emerge in Ukraine;¹³
Starmer arranging a summit of these countries, even though the (then) Chancellor of Germany Olof Scholz rejected the concept as premature, and Giorgia Meloni has refused to attend;¹⁴
The extent of the proposed defence cooperation going far further than PESCO in scope, but narrower in terms of the number of countries involved.

The latest appears to be that Russia is unwilling to accept the ceasefire proposal put onto the table by the USA.¹⁵ This would render all Starmer’s efforts null-and-void.

Tariffs

Cutting across the Ukraine issue is that of tariffs. It has surprised European leaders that Trump is following through on his manifesto to the American people. European leaders appear to take it as read that they do things that were not in their manifesto and/or do things that are the opposite of what they promised:

Starmer cutting winter fuel payments for pensioners,¹⁶ and refusing compensation to women who lost out on their state pension rights;¹⁷
Merz proposing now to lift the German Debt Brake when, prior to the recent Bundestag elections, this was out of the question.

Tariffs also seem to be moving on an hour-by-hour basis, with Trump first imposing, then delaying, then increasing or reducing the rate of the tariff. Nevertheless, the direction of travel is that some tariffs will be imposed by the USA, and reciprocal tariffs will be imposed by other countries.

Starmer will want the UK to avoid all US tariffs, although that is dependent upon the US imposing tariffs on the basis of imports of specific goods from named countries, and not just on the specific goods wherever they emanate from.

The UK avoiding US tariffs will not enamour the UK to the EU. This is also a risk to Starmer’s positioning on Ukraine, that European leaders may not wish to be preached at by the leader of a country that has avoided US tariffs when their countries have not.

Northern Ireland

Starmer will not be able to completely hide away from US tariffs because, under the Northern Ireland Protocol and the Windsor Framework, trade in goods out of and into Northern Ireland is subject to the EU’s tariffs regime and not the UK’s. This sums up the absurdity of the post-Brexit arrangements, as recently commented upon by the MP Jim Allister KC for the Traditional Unionist Voice party.¹⁸

In order to exempt Northern Ireland’s goods trade from US tariffs, Starmer would need to loosen its ties with the EU, not strengthen them, in his Re-set. That is hardly going to be possible when his negotiating opponents will be wanting to see solidarity from the UK with the EU in its trade dealings with the USA.

The Republic of Ireland

Trump has also identified the Republic of Ireland as running a tax regime – often referred to as the ‘Celtic Tiger’ – that is against US interests.¹⁹ It is also against UK interests. At a time when the UK is desperate for tax revenues it will prove very hard for Starmer to side with the EU in defending its fellow member state against the USA when the UK is equally a victim of the ‘Celtic Tiger’ as the USA is, and as – if they looked into it carefully – the other EU member states are.

Summary and conclusions

Starmer has set himself an impossible task of simultaneously attempting to re-set UK relations with the EU, establish a durable peace in Ukraine, avoid US trade tariffs, and act as an honest broker between the USA and EU.

There is no realistic pathway to achieving all of those objectives and it is just a question of what breaks down, when, and how badly.

¹ https://news.sky.com/story/sir-keir-starmer-thinks-he-can-manage-relations-with-the-us-eu-and-china-but-that-could-be-easier-said-than-done-13302676 accessed on 3 March 2025

² https://en.irefeurope.org/publications/online-articles/article/keir-starmer-wants-to-re-set-the-uks-relationship-with-the-eu-but-on-what/ accessed on 3 March 2025

³ https://commonslibrary.parliament.uk/research-briefings/cbp-9058/ accessed on 3 March 2025

⁴ https://www.telegraph.co.uk/news/2025/02/21/labour-must-submit-eu-rules-manifesto-pledge-starmer/ accessed on 3 March 2025

⁵ https://lordslibrary.parliament.uk/budget-2024-inheritance-tax-and-family-farms/ accessed on 3 March 2025

⁶ https://www.energyvoice.com/renewables-energy-transition/solar/uk/566122/labour-donor-dale-vince-says-solar-farm-approval-was-not-politically-motivated/ accessed on 3 March 2025

⁷ https://www.solarpowerportal.co.uk/ministerial-statement-solar-panels-must-not-be-built-on-good-farmland/ accessed on 3 March 2025

⁸ https://www.fwi.co.uk/business/new-bill-to-extend-compulsory-purchase-without-hope-value accessed on 13 March 2025

⁹ https://www.theguardian.com/environment/2025/mar/11/farmers-in-england-furious-as-defra-pauses-post-brexit-payment-scheme accessed on 13 March 2025

¹⁰ https://www.gbnews.com/news/britain-farms-shut-down-inheritance-tax-raid accessed on 3 March 2025

¹¹ https://foreignpolicy.com/2025/02/18/vance-speech-munich-full-text-read-transcript-europe/ accessed on 3 March 2025