How barrow boy and banker Britain should make a deal with Trump
Britain has long been a nation that combines street smarts and smart suits in its approach to trade. We should use our unique talents to take on Trump and tariffs, says Matthew Kilcoyne
Forgive me for taking you just outside of the bounds of the City for a second. Not far, but just south of the river. There stands, on the south side of London Bridge, one of my favourite pubs. Not because of its drink selections (fine as I’m sure they are), but its name: The Barrow Boy and Banker.
From the outside, with a simplistic or marxist view of the world, the barrow boy wheeler-dealer and the snobby educated gilded and guild protected banker, should never get along. But here in London, they rub alongside each other. Street smarts and smart suits that together, in the City’s finest institutions and her disruptive firms, do deals that keep the whole world connected by trade.
Trade is something that we’ve built our prosperity upon. It’s a world that keeps our lights on, food on our tables, gets goods from farms across the globe onto our supermarket shelves, into delivery vans and into our abodes and bellies. Free exchange between free peoples – underappreciated and, sadly, under threat.
Tariffs are the talk of the town. From across the pond newly crowned President Trump has had enough of those countries and blocs that do not pay their way in a world free-loading on America’s security offer, or subsidising their own industries or blocking access to American firms while expecting access for their own.
Liberal Democrat Ed Davey would see the country throw our collective weight into the EU’s confrontation with America. The Labour Government, to their credit, are not so quick to provoke the Donald. The Tories and Reform are a little bit more pro-Trump these days than during his first term, but cosying on up too much carries risks of its own.
The hustler and the strategist
Re-enter the barrow boy and banker. The barrow boy is the hustler, getting deals done. The banker, the strategist, seeing the bigger picture. Together, they represent a shrewd, results-focused approach – the very essence of “The Art of the Deal”. And that’s how Britain needs to engage with Trump’s America: be clear, be direct, be ready to make a deal. The old-fashioned, understated diplomacy? That’s a language Trump simply doesn’t speak.
Antagonism at home, or as part of Europe, comes with risks and opportunities that we need to properly assess. The European Union, constrained by its need to demonstrate collective strength and protect its internal market, is almost necessarily going to respond forcefully to any new American tariffs. This is understandable given their political imperatives and their union that is complete mostly in goods and not services or capital markets. But Britain is different, we do have a different make-up to our economy and a different trade relationship with the USA and other states.
Britain’s vulnerability to Trump’s trade tariffs lies primarily in second-order effects via our services and to some high-value manufacturing sectors which are well linked into the high-end industries Trump supports in the USA (think planes, defence and, yes, AI).
The City of London’s financial services, which account for roughly 10 per cent of UK GDP, will, when Trump raises tariffs on goods Americans buy from countries he dislikes, face significant indirect effects through the disruption of global trade flows and financial market uncertainty. The immediate impact would manifest in sterling volatility and heightened risk premiums on UK assets – something the Chancellor can ill afford.
The City of London’s financial services, which account for roughly 10 per cent of UK GDP, will, when Trump raises tariffs on goods Americans buy from countries he dislikes, face significant indirect effects through the disruption of global trade flows and financial market uncertainty
Britain should choose a uniquely British path. The City of London handles nearly half of global forex trading and an even larger share of euro-dollar transactions. We’ve got all the major AI firms invested here, some of the top universities, the best fintechs, insurers, biotechs and banks. They’re here because of our cultural combination of pragmatic deal-making and sophisticated positioning as much as our fiscal and monetary policy. Our pivotal place can be maintained in this tricky time not by taking a side but by maintaining measured engagement while others exchange blows. Doing so we could strengthen London’s role as a trusted neutral venue for international business.
When Trump speaks of “The Art of the Deal,” he’s actually describing something the City has practiced for centuries – finding practical solutions where others see only conflict. He may yet offer us a trade deal himself, just as the EU will revisit theirs with us shortly. We need our leaders to show that barrow boy and banker savvy in that moment and act in our national unique British interest. In the meantime they should keep own tariffs low and our trade free. The rest of us should tell our contacts and clients that the City is open to anyone that wants to trade.
Matthew Kilcoyne is a free market economist and commentator