PM Sunak to Seek Closer Economic Ties With US in White House Visit

Prime Minister Rishi Sunak addresses journalists at the Western Jetfoil terminal in Dover, Kent, on June 5, 2023. PA

British Prime Minister Rishi Sunak is visiting the White House this week to seek closer economic ties with the United States, despite the Biden administration’s halt on discussions for a free-trade agreement.

This will be his first visit as Prime Minister to the White House, in which he will also discuss the war in Ukraine, the security of Taiwan, and the regulation of artificial intelligence.

It will be Sunak’s fourth meeting with the President in recent months and their most lengthy interaction to date.

During his two-day visit, Sunak is also expected to meet with congressional leaders and U.S. corporate executives, as well as attend a game of the Washington Nationals.

Sunak began started his visit on June 6, by laying a wreath at the Tomb of the Unknown Soldier at Arlington National Cemetery.

UK Prime Minister Praises Ties With the US

The Prime Minister, like his immediate predecessors, has been trying to build stronger economic ties with the United States and bring it up to speed with their military alliance.

One of the most touted benefits of support for Brexit was the prospect of a free trade agreement with the United States.

Five rounds of talks were held between former President Donald Trump and successive Conservative governments before Biden terminated discussions.

This time, Sunak will not push for negotiations to restart talks with the Biden administration.

Before the trip, Sunak said that existing trade ties stood annually at $346 billion, of which $17.4 billion are new investments by American companies in Britain.

“We need to build an alliance that also protects our economies,” Sunak added.

“Just as interoperability between our militaries has given us a battlefield advantage over our adversaries, greater economic interoperability will give us a crucial edge in the decades ahead.”

Sunak Opposes Biden Protectionist Policies on Green Industries

Sunak is also expected to discuss Biden’s Inflation Reduction Act (IRA) to domestically subsidize green technology with $370 billion in investments.

The British leader commented that “subsidy races” were not a solution to making international climate goals.

Many in Britain are critical of the IRA, which was signed by the President last summer, as harmful to trade.

The White House will give billions in tax credits and subsidies to speed up the production of green energy and encourage the use of electric cars to cut carbon emissions.

The BBC asked Sunak if there was anything that his American counterpart could do to ease the economic impacts of the IRA on Britain.

“It’s something that he [President Biden] and I have discussed in the past, and you'd expect us to continue discussing it,” the Prime Minister responded.

Sunak referred to a joint statement by the G-7 when asked if a strong economy required a protectionist approach to key industries.

The Prime Minister said that the G-7 -nations have already agreed that they “don’t believe in protectionism as the answer to this challenge and also don’t believe in subsidy races that are zero-sum.”

UK May Come to Agreement With White House Over EV Exports

Meanwhile, Sunak mentioned that there were $17.4 billion of new investments by U.S. firms and 2,500 jobs since October 2022

The bulk of those investments, about $11.2 billion, comes from BlackRock, bringing its total amount of U.K. investments to $622 billion, consisting of exchange-traded, index, and mutual funds, as well as alternatives and direct investment in Britain, said the Prime Minister’s office.

Other money managers like Blackstone and KKR account for most of the remained, with investments of $2.99 billion and $2.49 billion, respectively.

According to the BBC, the two nations are expected to unveil a trade deal that would allow British carmakers that export EVs to the United States to benefit from some of the tax credits offered to American EV makers.

The Biden administration came to a similar agreement with Japan earlier this year and is now entering into talks with the European Union.

However, progress over a comprehensive free trade deal, as President Biden is still expected to oppose it.

This will likely force Sunak to deepen trade ties through less comprehensive mini-deals with about 20 states.