British Prime Minister Rishi Sunak is due to arrive in Washington on Wednesday and vows to build an “economic alliance” with the US to deal with global threats as he tries to cover up trade tensions between the two sides.
Downing Street admitted ahead of the visit that Britain had given up seeking a free trade deal with the US – an agreement once seen by Sunak and other Eurosceptic Conservative MPs as one of the biggest economic prizes of leaving the EU.
Meanwhile, Sunak will seek concessions from US President Joe Biden to soften what British ministers have called “protectionist” efforts by Washington to build a domestic industrial base in green technologies.
In a world dominated by the US, China and the EU, Sunak’s two-day visit will seek to ensure Britain’s voice is heard in debates about “reducing risk” in the west’s economic relationship with China and regulating artificial intelligence.
Sunak will draw on the close military relationship between the UK and the US – strengthened during the war in Ukraine – and argue that the two sides can work equally closely in building economic security.
“The UK and the US have always worked closely together to protect our people and uphold our way of life,” Sunak said. “As the challenges and threats we face change, we must build an alliance that also protects our economies.”
UK Trade Secretary Kemi Badenoch is among UK ministers who have warned that Biden’s $369 billion green subsidy package – the Inflation Reduction Act – is “protectionist” and would bring industry back to the US at the expense of allies .
Sunak’s spokesman said the British Prime Minister and Biden would seek to address this issue by “providing meaningful solutions that support our supply chains”.
British officials said talks between the two leaders would consider critical minerals used in electric vehicle battery production.
Britain is expected to be offered the kind of deal already promised by Biden to Japan in March: allow U.S. “clean vehicle tax credits” to be issued for critical minerals mined or processed in third countries with which Washington has an agreement.
Electric vehicle buyers in the US can get a $7,500 government-funded rebate on their car if it’s made in the US and has enough “local content” such as the battery.
The rules created under the IRA have led to a wave of investment in the US by battery manufacturers.
Allowing the UK to benefit from the rules would allow battery materials, such as lithium mined or processed in Britain, to count as local content in US-built vehicles. Such a move could be a potential boon for the fledgling electric vehicle supply chain in the UK.
Sunak wants Britain to become part of a network of Western allies building supply chains that remove dependence on states like China or Russia. “This is an area where we can find common ground,” Sunak’s spokesman said.
The Prime Minister also hopes Britain can be a “deft” regulator of AI, positioning itself as a regime lighter than the EU and thereby making it more attractive to US companies and a potential example for a global approach.
But Sunak is trying to join a discussion already being held at a preliminary level by the US and EU, which have set up a trade and technology council to discuss such issues.
US Secretary of State Antony Blinken said at a meeting with the EU in Sweden last week: “I think we share the belief that the (Trade and Technology Council) has an important role to play in developing voluntary codes of conduct which are open to all like-minded countries.”
UK officials have floated the idea of the UK becoming home to an international AI regulator and hosting a summit to discuss the matter later this year.
Sunak’s meeting with Biden at the White House will be their fourth meeting in four months and talks will also focus on the need to support Ukraine, including through air defense systems.
The British prime minister will also meet with congressional leaders on Wednesday and meeting with CEOs of major US companies on Thursday.