The Special Relationship Under Trump 2.0 (Part III)

The Chagos Islands

In the face of deep ideological conflicts, and with a highly transactional president, it is advisable for Starmer to stress Britain’s continued utility to the cold, hard interests of the United States. In particular, he might remind Trump that British-owned real estate underpins American global supremacy, whether in airbases across Britain (which recently welcomed American B-52 bombers), Ascension Island deep in the South Atlantic, or the Chagos Islands in the Indian Ocean, which host an Anglo-American airbase on the atoll of Diego Garcia. Its location – midway between the Middle East and Asia – is strategically important; American planes flew sorties from it during the war in Afghanistan and both Iraq wars. Britain set up the base in the late 1960s and granted America the right to operate from it in return for a discount on a nuclear-weapons deal, displacing the native Chagossians in the process.

But on October 3rd last year Sir Keir’s government announced a preliminary deal to cede sovereignty of the islands to Mauritius. Under the agreement, the Diego Garcia base will remain in British hands and under American control for the term of a (renewable) 99-year lease. Britain will also pay Mauritius a large sum – initially £9 billion, though the Mauritians are now reportedly demanding £18 billion – to build infrastructure. Although the deal is clearly good for Mauritius, appeases progressives in London, and enjoyed the support of the Biden administration, it doesn’t much help the Chagossians, the British, or the US, and many conservatives in Washington and London alike suspect the real beneficiary may well be Beijing.

According to press reports, Starmer and members of the outgoing Biden team resultantly wanted to finalize the agreement to cede sovereignty of the islands before President Trump could take his oath. Fortunately, wiser heads prevailed. Prime Minister Starmer agreed to welcome the new President to the negotiating table, and Foreign Secretary David Lammy confirmed that Trump’s backing was essential for the deal to go ahead. This is good news for the interests of both countries, as none of the arguments for the surrender of sovereignty stack up on closer inspection, but it also creates another point of potential tension between their governments.

Legally, Mauritius’s claim is hardly robust. The core of its case is a non-binding advisory opinion by the International Court of Justice saying that Britain violated international law in separating the Chagos Islands from Mauritius before its own independence in the 1960s. That may be a sound principle in general but it has weak purchase on the facts of this case. Britain, which acquired the islands de facto in 1786 and de jure by treaty from France in 1815, administered the territories together between 1903 and 1965, when it paid Mauritius £3m to renounce its claim. Mauritius shares no other pre-colonial history with the Chagos islands, however, and geographically the two are separated by more than 1,200 miles of water – or about as far as London is from Rome. And although worries have been expressed that the ICJ could one day issue a binding ruling on the matter, this would require Britain to agree to the court’s adjudication, as its consent to ICJ jurisdiction specifically excludes disputes with current or former Commonwealth members like the Mauritians.

Nor does a moral appeal to the rights of the indigenous Chagossians provide a convincing basis for the handover. When they were deported to Mauritius and the Seychelles in the 1960s, they faced poverty and social exclusion, so Britain eventually offered them citizenship. Today many live in the UK. No attempt has been made to systematically poll their opinion, but the MP for the constituency where they mostly live says he has not heard a single voice in favor of Mauritian sovereignty. This is hardly surprising: quite aside from the aforementioned lack of historical ties between the territories, Mauritius itself has suggested that only Chagossians with Mauritian passports will potentially be able to resettle on the islands, excluding those now in Britain or the Seychelles. It is not even possible to know whether the diaspora in Mauritius supports the deal, as the country has criminalized questioning its claim to sovereignty over the islands. The opinion of the Chagossians has as such been ignored throughout the dealmaking process.

As for the strategic argument for giving away sovereignty, this also seems naive in the extreme. The Starmer government claims it will help boost British soft power in the global south and, in so doing, win them over to causes such as backing Ukraine. But, a month after the preliminary announcement of the deal, the UK found out precisely how much goodwill it had purchased, when it was stuck with an £18-trillion bill for reparations at a meeting of Commonwealth heads of government. As for Ukraine, one cannot help but suspect that if countries in the global south are unsupportive of its cause at this stage, another pretext for such skepticism will be found regardless of the status of a remote disputed atoll in the Indian Ocean.

The risks of giving up sovereignty, however, are very real. Although the base will remain in British hands and under American control for the term of a long lease – initially reported as 99 years, though the Mauritians have reportedly demanded a shorter period – it would leave Diego Garcia entirely hostage to the whims of future Mauritian governments. This comes at a time when Mauritius has grown increasingly friendly with China, with whom it entered into a trade agreement in 2021. Mauritius’s new prime minister, Navin Ramgoolam, has also signaled his intent to further bolster diplomatic relations with the PRC, and once told his supporters that President Xi Jinping related to him that “China never forgets its friends”. It also is an ally of India, whose foreign policy could diverge significantly from the West’s in the coming decades, and has recently strengthened ties with Iran too. But if Mauritius is deepening its friendships with the likes of China and Iran, can it really be relied upon to keep their spy ships away from our military base? They could even decide to renege on the lease altogether, just as the Philippines closed an American naval base in Subic Bay in 1992 after its Senate rejected an extension, and Libya shut down British and American bases in the 1970s after Muammar Qaddafi took power. Britain’s experience with Hong Kong, where China has disregarded many of its treaty commitments since the territory was handed over in 1997, also suggests caution is in order over the worth of paper guarantees.

The best outcome for Britain, America, and the Chagossians would as such probably be for members of Britain’s Parliament to vote against this deal and push instead for a settlement that would maintain sovereignty over Diego Garcia while offering a referendum to the Chagossians on the future of the other islands. Given Labour’s huge majority, however, this scenario is unlikely. The next best outcome would be for President Trump to veto the deal altogether. His advisers seem inclined to do so: Secretary of State Marco Rubio has warned that allowing Diego Garcia to slip into the hands of Mauritius would “provide an opportunity for communist China to gain valuable intelligence” and pose “a serious threat” to U.S. national security and “critical U.S. military posture”, while Robert Wilkie, who headed up Trump’s Pentagon transition team, called the proposed deal a “calamitous decision” that wasn’t “thinking about the long term”. Despite their skepticism, the President hinted in his meeting with Keir Starmer that the US could support the handover after all, telling reporters in the Oval Office, “I think we’ll be inclined to go along with your country.” Doing so would certainly smooth over relations with the Starmer government, and the UN, but likely at the expense of the best interests of America, her British allies, and the Chagossian people. As such, most conservatives on both sides of the Atlantic will be hoping that the President puts strategic self-interest ahead of diplomatic comity where this one is concerned.

Ukraine and NATO 

There is clearly a substantive difference in Anglo-American approaches to the war in Ukraine. Starmer has maintained the U.K.’s strong bipartisan support for Kiev against Russia’s invasion. His government has vowed £3 billion in military aid to Ukraine every year for “as long as it takes”, and holds the position that Russia should give back all territory gained since February 2022. The Prime Minister also reiterated the view last month that Ukraine is on an “irresistible path” to joining NATO, and like most of Westminster’s political and media elite, he regards the invasion as a product of Russian imperialism.

Trump has a very different stance. He vowed to “stop wars”, has refused to explicitly say if he wants Ukraine to win, and threatened to stop aid to Kiev – a threat he made good on after a disastrous Oval Office meeting with President Zelensky the day after Keir Starmer’s visit to Washington. His view on the conflict is a realist one. From his perspective the war erupted because America provocatively dangled NATO membership in front of Ukraine while sponsoring a coup against an elected pro-Russian government there in 2014, threatening Russia’s control of its Sevastopol naval base and the security of its near abroad. To end it, a negotiated peace is seen as preferable to fighting to the last Ukrainian, WW3, or unconditional surrender. And in order to achieve such a deal, Trump accepts that it will be necessary to agree to the military non-alignment of Kiev in future, as well as to freeze the post-war borders roughly along the present frontline; after all, territory that has already been lost on the battlefield – and is in any event largely populated by ethnic Russians – is unlikely to be won back at the negotiating table. Both sides will also have to be incentivized to make peace: the Ukrainians by threatening the withdrawal of US military and financial aid, the Russians by dangling the prospect of sanctions relief and the unfreezing of assets if they co-operate.

Given Trump’s rapid drawdown of US support in order to pressure the Ukrainians into peace talks, the UK and other European countries are now trying to signal that they have the will and capability to back Ukraine as long as the Ukrainians themselves have the appetite to do so. This seems broadly welcome to the Trump Pentagon, which wants the Europeans to increase military support now to stave off an embarrassing Ukrainian collapse, sustain Kiev through the negotiations, and potentially deploy troops in a peacekeeping role as part of any settlement – something that Starmer has already raised the prospect of.

This will not be cheap: over the first two years of the war, up to December 2023, total US military aid to Ukraine totaled some €43 billion, compared with around €38 billion for Europe (including the UK and Norway), meaning that, if the US is no longer willing to provide assistance, maintaining the current level of total military aid would require Europe to double its contribution. For the UK to take its proportionate share of this increase, it might mean doubling its Ukraine budget from £2.5 billion in 2024/25 to as much as £4 billion or £5 billion per annum. It will also have to take on additional responsibilities in relation to training and intelligence support for the Ukrainian armed forces, to say nothing of the risks of any future peacekeeping deployment.

A failure to step up in these areas would likely incur scorn in Washington, where the administration believes that Europeans are unwilling to match their hawkish views on the war with material commitment. Starmer’s government will also have to navigate thorny conflicts arising from its unique intelligence sharing relationship with the US, an issue that came to the fore earlier this month when the Americans demanded that Britain suspend sharing of Five Eyes intelligence with Kiev, much to the disgust of British defense officials.

Looming in the background of conflicts over Ukraine is the question of what policy the second Trump presidency will adopt towards NATO more broadly. The most likely scenario remains that the US stays in NATO, retains the position of supreme military commander, but makes deep cuts to the military resources that it assigns to the Alliance. In this event, the Brits would have to do more, but NATO as an institution would survive, and the possibility of a renewed US commitment, under a new president, would remain open. If Trump goes further and withdraws the US from its NATO commitments altogether, all bets would be off.

In the former scenario, the immediate priority in London would be to steady the ship, ensuring that the major European powers, working closely with NATO and the EU, take a united stance against any Russian attempt to take advantage of US withdrawal. In the latter scenario, of full American withdrawal from NATO, some voices would call for the EU to take on the main role in organizing the common defense of its members, with the UK and Norway participating through third-party agreements. If the US’s long-term commitment to European security remained unresolved, however, most European states would be likely to favor the Europeanisation of NATO, rather than a wholesale transfer of its responsibilities to another organization. If it has to choose, the UK will prefer this latter option, which will give it an equal say with the other major European military powers in the continent’s defense, as well as minimizing the disruption caused by a US drawdown. It would also fervently hope that the main pillars of the UK-US defense relationship, namely the Five Eyes Agreement on intelligence sharing and the 1958 UK-US Mutual Defense Agreement on the sharing of nuclear missiles, would outlast the US commitment to NATO itself.

Tariffs and Trade

At first glance, Britain looks vulnerable to Donald Trump’s famous enthusiasm for tariffs. After all, much like Canada and Mexico, which have recently been threatened with levies of 25%, America is Britain’s single biggest trading partner. Its own figures also show it ran a healthy £71-billion ($88-billion) trade surplus with America last year, roughly the same as Canada’s. And given MAGA’s strong disapproval of how the Labour Party is running the country, they might see tariffs as a useful weapon for bringing it into line on matters like free speech.

Yet, so far, the UK seems to have escaped the worst of Washington’s new mercantilism. Republicans in general are typically enthusiastic about strengthening trading ties with Britain: Jamieson Greer, the man nominated to become the new US Trade Representative, testified to Congress in 2023 that it was one of the trading partners with which he was most focused on building market access. The 47th President himself has suggested that “The UK is out of line. But I’m sure that one, I think that one, can be worked out.” Keir Starmer for his part said that he wants talks between the U.K. and the U.S. on a trade deal at the federal level to resume within weeks, and probably had this in mind when he chose Peter Mandelson, a Labour grandee and former EU trade commissioner, as Britain’s new ambassador to Washington.

Aside from the politics, some structural economic factors are also on Britain’s side on this issue. For one thing, the American Bureau of Economic Analysis has come up with very different figures from Britain’s Office of National Statistics about the trade balance between the two countries, calculating that the US actually ran a surplus of $14.5 billion in total trade with the UK in 2023. For another, when Britain does run up overall surpluses with America, it is thanks to services; in goods, the two are broadly balanced, which may be helpful given that President Trump primarily blames goods deficits for the blight of de-industrialization. And unlike Canada and Mexico, both of which by dint of geography send over 75% of their exports to America, Britain sends only 13% of its total to the US market – and even then, just 7% of those exports are classified as structurally vulnerable in the sense that over half of them are sent to America.

This is not to say that President Trump’s broader trade policies could not, or will not, do damage to the UK. A global tariff on steel came into force this month, and as the UK did not secure an exemption this will cause some friction. There is concern among Britain’s numerous drug companies and car manufacturers that the administration may make good on warnings of tariffs on cars and drugs. The Treasury in London is also concerned that the Trump team’s upcoming review of reciprocal tariffs might conclude (in their view, erroneously) that VAT – an indirect consumption tax charged at 20% on all domestic and imported goods purchased in Britain – should be viewed as a tariff, triggering retaliatory levies of 20% or more. If that happened, one think tank concluded that it would shave 1% off of UK GDP and reduce British exports by £22bn, or about 2.6% of total exports. This is much less damaging than the projected impact of equivalent levies on Canada and Mexico, but would still be pretty awful for Keir Starmer nonetheless; his government has promised faster growth to fund increased public expenditure, and can’t raise taxes any further without exacerbating its already dreadful standing in the polls. Expect Labour to be resultantly desperate to build trust with the Trump administration, notwithstanding all the foregoing conflicts in domestic and foreign policy; they know that being shunned by the 47th president would only work in Nigel Farage’s favor and make it all the more likely that Britain will have its own populist government in 2029.