The Notebook: Michael Martins on how UK PLC can prepare for a second Trump presidency

Today, Michael Martins, former US Embassy London political and economic specialist, takes the Notebook pen.

Donald Trump currently leads Joe Biden in five of six US swing states, the US electoral equivalent of Labour’s lead over the Conservatives. Trump, already the far and away frontrunner in the Republican primary, looks increasingly likely to win a second term as US President. And, if we’re being honest, he has a greater incentive. If you had to choose between potentially dying in prison (78 years old next election), or becoming US President again, where would you focus your efforts?

A second presidential term for Trump means he will have the most leverage he’s ever had. War in Europe and the Middle East and an ongoing trade battle with China mean allies need the US. I promise you, if Trump can capitalise on his leverage, he will. So, how can UK PLC get ahead of it?

First, prepare for trade disruptions. Most of Trump’s trade policy is still in force, meaning he will probably double down. Think higher tariffs and a preeminent focus on trade deficits and indifference to economic and trade theory. Helpfully, both the US and the UK government report that they are in trade surplus with each other, but that won’t matter. Try to answer questions like how is your business helping to reduce the US’s trade deficit with the UK? And then try to focus investment on domestic priorities, if possible.

Second, friends-shoring will become America-shoring. If President, Trump can and will publicly shame companies for investment location decisions, so try to find something that will either be about how your company is bringing jobs to places that love Trump, or a bigger, worse way that your competitor is not picking Trump’s America (maybe they’ve expanded into the EU, for example).

Third, get your company’s culture war talking points in a row. Some companies found themselves caught between their employees’ views and President Trump’s last time, so start planning now. Know who your customer votes for, so you know how far to push either way, while also giving your internal comms a bit of a runway.

Mining: good work, if you can get the permit

It’s a good day to be a UK lithium refiner or a graphite miner. China has limited the exports
of four critical minerals over the past year, limiting supply, while UK-based companies can
access half a trillion in US subsidies via the Inflation Reduction Act, underscoring huge
demand. Fingers crossed John Smith in Devon can stomach an extra lorry or two on the road
and the Chancellor decides to spend as much supporting Western foreign policy aims as he
does on (almost) paying out a Natwest CEO’s bonus pay.

Bringing the armed forces online

One of the brightest points of the UK economy flying under the radar is defence tech. The UK and the US militaries are spending billions to digitise their logistics, leading to billions of dollars and pounds in procurement contracts for a few sprightly UK defence tech companies. After a recent open letter to the US DoD from a dozen defence tech firms complaining about the stranglehold of bigger fish winning all the US contracts, expect the spigot to open further as both armed forces look to upgrade and incorporate lessons
learned from the Ukraine/Russia conflict.

AI events have far too many chairs and speakers

Few denizens of SW1 attended many of the AI-themed events held in Westminster ahead of the AI safety summit. The format probably turned them off: 8 speakers and minimal networking at a midweek evening event is a prime example of AI-tech firms getting Westminster wrong. Between that and the pub, small surprise few AI event attendees ended up in Politico’s Spotted that week. Most of the political and media folk AI-tech needs to make friends with don’t like to be lectured to or sold the “next big thing.” AI-tech will
need to rethink its approach to fit in in Westminster, otherwise, this could’ve just been an email.

Favourite bookstore and book of 2023

It’s one of my favourite times of year: year-end books and movies lists. These lists keep me going for the first month or two when it is either too cold (Canada for Christmas) or too rainy (London for Jan) to go outside. I was an early subscriber to the independent bookstore Backstory’s monthly book subscription and it has not disappointed. I found the Sea of Tranquility excellent. An early post-Covid pandemic book that followed on the author’s excellent pre-Covid award winning novel, and then TV series, Station Eleven, also about a pandemic, The Sea of Tranquility’s nested story structure paints a beautiful picture of how small decisions have life altering consequences in her classic style of linked characters across time and (literally this time) space.