A Manifesto for Lord Mandelson- Part 4

Dealings with the US
Tariffs  Lord Mandelson has his agrément. Once he presents his credentials, his central objective will be to avoid new US tariffs. He will rely on US figures which show a surplus in their trade with us of $15bn, aiming off ours which show the reverse, a surplus in our favour of £67bn. His priority is then to ensure we are not caught in the crossfire of some other Trumpian manoeuvre; so too to avoid being singled out as a teacher’s pet, lest we upset our neighbours unnecessarily. 

Taxation  Trump has announced withdrawal from the International Tax Treaty. This is in line with the bully-boy tactics of the IRS (the American tax authorities) forever. For example, the IRS succeeded in using 9-11 as a pretext to push other governments into comprehensive restrictions, nominally targeting terrorist money-launderers, but really going after old-fashioned tax-dodgers. A bilateral deal might be welcome to the US as giving them cover for this round of one-sidedness: our ask would be taxing Internet firms more effectively, maybe too much for an administration so close to the tech bros. What’s more, this would upset those which whom we’ve just signed up. 

Then again, we could tolerate local upset for the right sort of progress with the Americans on the topics of these posts. We set out a framework in our conclusion. 

Piecemeal inward investment  Lord Mandelson should promptly explore collaboration in AI, which the Prime Minister has declared a national target. Trump’s $0.5tn commitment to Stargate in his inaugural week was thrown into uncertainty by the dramatic launch of DeepSeek the following week. Whether the Chinese programme is a genuine breakthrough, a dead end, or a deception, we should be realistic about what we can offer. We can’t throw in much cash and our datacentres are hampered by high energy prices. On the other hand, we do have skilled people and could focus on training more. 

For a couple of decades, apologists for the NHS have plugged its records as its hidden gem. AI makes this timely, but unfortunately our datasets are so chaotic that we will have to pull up our socks to stop the AI trainers making do with smaller but more tractable datasets from (eg) the Californian integrated provider, Kaiser Permanente; or records, skewed but amenable to adjustment, from the US Veterans Administration. Better to offer to square the circle with a collaboration to clean our datasets, using what else? AI!

Tariff free trade  Outright free trade is ambitious: if he has time, Lord Mandelson may explore it in agriculture, on the basis of mutual observance of local standards (so no chlorine-washed chicken or hormone-treated beef, unless we OK them); or manufactured goods; with a view to investments in EV car or battery manufacture. In return, the US would want us to prevent “Trojan Horse” investments by third-country manufacturers targeting them. Overall, however, targeted sectors are likely to serve our mutual purposes better, as well as being more realistic: in future posts we will address housing, energy and public services. 

Equivalent to Europe
Reeves says she will consider Maros Sefcovic’s Pan-Euro-Mediterranean Convention, simplifying rules of origin for supply chains. If disputes are subject to the ECJ, it’s not on politically. Anything more is the same story, for the reasons set out in our introductory post. Nonetheless, while Brussels continues to cast such lures, it makes sense to remind the Americans that we have options; so too to see what concessions the EU might offer to sign us up. Its current woes should ease negotiations. 

The International Tax Treaty was to pre-empt turnover taxes on Big Tech companies booking their profits in low-tax jurisdictions. If the Treaty falls apart, turnover taxes are likely to come back. If the UK fails to agree a bilateral tax deal with the US, we will want to revisit them ourselves, possibly in concert with our neighbours. 

We should, however, exercise caution. So far, the UK has squandered Brexit’s promise of regulatory divergence. Even so. it remains essential that we steer clear of renewed entanglements in Europe’s self-harming policies. Brussels itself is having a wobble on this score, promising to simplify its green rules, but this purported conversion calls for a pinch of salt. For a couple of decades, the EU has revelled in being a “regulatory leader”, making it unlikely to have changed its spots. 

Otherwise, we exhausted these avenues while we were in the EU, so it is hard to see what else to do.

Next, labour markets.