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Ed Davey will urge Sir Keir Starmer to negotiate a UK-EU customs union to “turbocharge the economy” and strengthen the UK’s hand against possible tariffs from president-elect Donald Trump.
Giving a speech in London on Thursday, the Liberal Democrat leader will say such a deal would help the UK to negotiate with Mr Trump “from a position of strength”.
He will also criticise Conservative leader Kemi Badenoch for wanting to go “cap in hand” to the new US president and “beg for whatever trade deal he’ll give us”, as well as taking a swipe at Reform UK leader Nigel Farage for “fawning over Trump and licking his boots”.
Mr Farage is “more interested in advancing Trump’s agenda over here than the UK’s interests over there”, Sir Ed is expected to tell an audience in London in his first major speech of the year.
It comes as a leading thinktank urged the prime minister to boost trade defences to deter against economic threats from the president-elect.
A new report from the Institute for Public Policy Research (IPPR) calls for urgent reforms to navigate Mr Trump’s presidency, warning that “global trade faces a new era of turbulence”.
In the run-up to his election, the Republican promised to implement 10 to 20 per cent tariffs on all goods coming into the country – a figure that rises to 60 per cent for those from China.
As Sir Keir attempts to pursue a reset of relations with the EU and renegotiate the Brexit deal struck by Boris Johnson, Sir Ed will urge the government to avoid simply “tinkering around the edges of the botched deal”.
“The UK must be far more positive, far more ambitious, and act with far more urgency. That is why, today, I am calling on the Government to negotiate a brand-new deal with the EU this year”, he will say.
He is expected to urge the UK government not to be “bullied into taking whatever Trump offers us”, saying that rebuilding our “crucial relationship with Europe” is “how we can protect our economy, defend European security, and deal with President Trump from a position of strength, not weakness.”
Taking a swipe at Mr Farage and Ms Badenoch, he will add: “The answer cannot be to do what some – like the Leader of the Conservative Party – would have us do. Approach Trump from a position of weakness. Go to him cap in hand and beg for whatever trade deal he’ll give us.
“Nor can we take the Farage approach of fawning over Trump and licking his boots, seemingly more interested in advancing Trump’s agenda over here than the UK’s interests over there.
“Neither of those is the way to get a good deal for Britain or get Trump to take us seriously. If we seem as weak or as desperate as the Conservatives or Reform would have us appear, Trump will treat the UK the same way he has treated so many throughout his career.”
The IPPR’s report argues that the UK should signal openness to negotiations over a free trade agreement with the US under President Trump, while also calling for the UK to develop a legal mechanism to introduce counter-measures – including tariffs – in response to attempts to coerce the UK economically.
Such a policy would follow the approach of the EU, which has recently introduced a similar “anti-coercion instrument”.
The report also points to the consequences of Brexit, arguing that between 2021 and 2023, EU goods imports to the UK were down by 32 per cent and UK goods exports to the EU were down by 27 per cent compared to what would have happened if the UK had not left the EU.
The prime minister is attempting to reset the UK’s relationship with the bloc after years of tense relations under successive Conservative prime ministers.
While Sir Keir has repeatedly insisted the UK will not rejoin the single market within his lifetime, he has pledged to “make Brexit work” by pursuing closer cooperation, particularly on defence, security and trade.
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