Inside Westminster

Can Peter Mandelson keep his mouth shut and wow Washington?

Despite having once called the incoming president a ‘bully’, with his trade background Peter Mandelson will prove a highly effective ‘Trump whisperer’ – if he can keep his Europhile views and thoughts on strengthening trade links with China to himself, says Andrew Grice

Saturday 21 December 2024 01:00 EST
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Peter Mandelson: Peers should not 'throw in the towel’ over Brexit

Peter Mandelson warned last month that the UK’s handling of Donald Trump 2.0 will be a “transactional rollercoaster ride”. Now, at the age of 71, he is climbing on board the rollercoaster to become UK ambassador in Washington.

Keir Starmer wanted a heavyweight and, very unusually, a politician rather than a diplomat – but didn’t have to twist Mandelson’s arm; he coveted this most testing of jobs.

Not everyone wanted him, however. Foreign Office officials preferred one of their own and the safe option on Starmer’s desk was to extend the term of Karen Pierce, the current ambassador. She impressed Starmer by helping him forge links with Trump, despite the previous scathing criticism of the president-elect by senior ministers including David Lammy, the foreign secretary (who backed Mandelson’s appointment).

In Mandelson’s favour was his closeness to Starmer’s two most influential advisers: Morgan McSweeney, the chief of staff, and Pat McFadden, the Cabinet Office minister.

Starmer wanted a heavy-hitter and judged that Mandelson’s credentials as a former UK business and trade secretary and EU trade commissioner were unrivalled. He knows the art of the deal. Three other senior Labour figures – David Miliband, Cathy Ashton and Valerie Amos – were also on Starmer’s shortlist. They were seen as safe to appoint if Kamala Harris had become president, but Mandelson ticked the Trump box better than they did.

He is well connected in Washington and will feel at home networking under the chandeliers at the UK ambassador’s residence and embassy in Massachusetts Avenue, designed by Edwin Lutyens, which has just undergone a £118m refurbishment. (As Northern Ireland secretary, he loved having the use of Hillsborough Castle, a Royal residence.)

His immediate, daunting task will not be to party, but to stop Trump imposing his proposed global tariffs of 10 to 20 per cent on the UK. A medium-term goal will be a UK-US trade deal, but that will be very hard.

Mandelson will probably focus on digital services, including AI, rather than an old-style trade agreement covering goods and agriculture, which has foundered over US demands to export chlorinated chicken and hormone-fed beef to the UK. One close ally told me: “His approach will be to lean into the US without alienating the EU. But it will be very difficult to navigate a path between the old economy in the EU and new economy in the US.”

Some experts fear the UK could fall between two stools – but in Mandelson’s ideal world, the US, UK and EU would strike a deal on the industries of the future, including AI and defence technology, to the benefit of all their economies. Yet that seems fanciful given Trump’s view of trade as a zero-sum game.

In 2018, Mandelson himself described Trump as “a bully and a mercantilist who thinks the US will gain in trade only when others are losing”.

From outside government, Mandelson shaped Starmer’s answer to the $64,000 question: how can the UK government enjoy a special relationship with the Trump administration while rebuilding closer links with the EU, which Trump detests and his allies describe as "socialist?"

After Trump’s election victory, Mandelson declared the UK’s goal must be to enjoy “the best of both worlds”, adding: “We have got to find a way to have our cake and eat it.” Starmer duly rejected the idea that the UK faces a binary choice.

Privately, Mandelson knows hard choices will probably have to be made – not least because Trump might force them on the UK. Government insiders tell me the compromise will be to hug the US close on defence but, when push comes to shove, prioritise trade with the EU because of the urgent need to boost the UK’s sluggish growth.

When he becomes the UK’s “Trump whisperer” next month, Mandelson will have to keep his own views out of it: he is a Europhile and in favour of engagement with China. Both are in line with Starmer’s instincts, but not Trump’s.

However, Mandelson does not believe “America first” will see Trump adopt the isolationist approach many fear because that would play into the hands of his enemies in China, Russia and Iran.

One of the hardest parts of his new job will be handling unexpected outbursts from the unpredictable Trump. During his first term, UK politicians and officials feared waking up to one of his explosive overnight tweets.

One upside is that personal relationships do matter to Trump. Starmer has got off to a good start, but – to paraphrase Diana, Princess of Wales – there will be three people in the PM’s relationship with the president, the other being Nigel Farage. Mandelson will adopt a more conciliatory approach to Farage and Trump’s first buddy Elon Musk than some of Starmer’s ministers want.

Indeed, not everyone in Labour will welcome Mandelson’s appointment. His critics recall he twice resigned from the Blair government and think he likes the limelight too much for the government’s good. There will be intense media scrutiny of the Labour peer’s previous business interests, including with China, through the advisory company he founded, Global Counsel. He stood down as chair this spring, becoming president.

I think Mandelson is wiser as well as older than he was in the Blair era. In recruiting him, Starmer has adopted one of Mandelson’s own recipes for good government – "high risk, high reward." If anyone can ride the Trump rollercoaster without falling off, Mandelson can.

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