Trump's America is not a reliable ally

Keir Starmer did his job by not telling the truth

If you were unsure as to whether the United States remained a reliable ally, just ask Canada and Mexico. Little more than six years ago, the two nations signed the United States-Mexico-Canada Agreement (USMCA), the successor to the North American Free Trade Agreement. At the time, President Donald Trump hailed the USMCA as “the largest, most significant, modern, and balanced trade agreement in history. All of our countries will benefit greatly.” Today, he effectively tore it up.

As of 12:01am, the US imposed a 25 per cent tariff on all imports from Canada and Mexico. Only last month, America’s northern and southern neighbours secured a reprieve by agreeing to beef up law enforcement around their respective borders, with Trump citing the movement of fentanyl and illegal migrants. This complaint was especially spurious in the case of Canada, given that US authorities intercepted a mere 19kg of fentanyl at the northern border, compared with nearly 9,600kg to the south.

As if to make this clear, Trump promptly changed his justification for imposing tariffs. Now, it’s apparently about cars. “What they have to do is build their car plants, frankly, and other things in the United States, in which case they have no tariffs,” the president said.

The easiest element of this to disentangle is the economics. According to EY, the imposition of 25 per cent tariffs on Canada and Mexico, as well as a further 10 per cent on China (assuming proportional retaliation by those nations) would mean:

• US GDP would shrink by 1.5 per cent in 2025 and 2.1 per cent in 2026, relative to the baseline, due to greater import costs. Inflation would rise by 0.4 percentage points, while American households would see an effective loss of $1,040

• Canadian GDP would shrink by 2.7 per cent in 2025 and 4.3 per cent in 2026, relative to the baseline, with inflation almost 2 percentage points higher

• Mexican GDP would shrink by 1.6 per cent in 2025 and 4.5 per cent in 2026, relative to the baseline, with inflation almost 2 percentage points higher

I’m working on the assumption that few readers are employed in the Canadian or Mexican auto sectors, so I’d add that EY also expects spillover effects to reduce the European Union’s GDP by 0.2 per cent in 2025 and 0.5 per cent in 2026. And these economies were not exactly booming to begin with.

More complicated are the defence and security implications of an unreliable US. Following a meeting of European leaders (and, notably, Canada) at Lancaster House, which took place mere hours after the calamitous Oval Office argument between Trump, Vice President JD Vance and Ukrainian President Volodymyr Zelenskyy, Starmer declared: “I do not accept that the US is an unreliable ally.” This is one of those times when the prime minister did his job by not telling the truth.

Starmer, like French President Emmanuel Macron and incoming German Chancellor Friedrich Merz, is playing for time. Even if it possesses both the ability and the will, Europe needs many years (perhaps a decade) to build up armed forces that come even close to bridging the gap.¹ If US support for Nato is no longer ironclad, ambiguity is better than confirmation.²

Let’s be clear what is actually going on in the US. The Trump administration is refusing to follow the laws passed by Congress, and stands accused of ignoring court orders to reinstate funding for various vital spending programmes. It has cut off aid to Ukraine, despite Congressional appropriation. And it is jettisoning international agreements signed in good faith by hitherto enthusiastic allies.

Even if he should be successful, and Starmer and others manage to convince Zelenskyy to relinquish stolen Ukrainian territory in return for a US security guarantee, how much is any treaty of mutual obligation signed by Trump really worth? Moreover, should Elon Musk’s butchering of the administrative state be allowed to stand, it is reasonable to question whether the US can continue to carry out the basic functions of government at home, let alone project power abroad.

Nothing is certain. Indeed, asked last week whether he supported Nato’s Article 5, which states that an attack against one ally is considered as an attack against all, Trump replied: "I support it.” But the parameters for what might feasibly happen are wider than any time in recent history. Barely 15 years ago, President Barack Obama referring to BP as “British Petroleum” following the Deepwater Horizon oil spill was enough to cause aneurysms on this side of the Atlantic. Today, we are double-checking whether the US intends to take Canada by force.

Housekeeping: It’s been a minute. Thank you so much for reading (to the end!). See you tomorrow, and the next day, and the next… Hopefully with more fuel duty maths, Tony Blair quotes and allusions to Roger Federer’s 2006 season.

By the way, if you enjoyed this newsletter, please do share it. It would mean the world to me.

1. Rob Johnson – former director of the Ministry of Defence’s office of net assessment and challenge – stated last year that UK armed forces “cannot defend the British homelands properly” and were unprepared for “conflict of any scale”

2. “It's better to keep your mouth shut and appear stupid than open it and remove all doubt” – a quote ascribed to Mark Twain, Abraham Lincoln and Proverbs 17:28