Kemi Badenoch, the UK trade minister, has her work cut out for her as Brexit Britain finds itself caught between the United States and the European Union in the midst of a trade war.
Concerns about a transatlantic trade war have grown since the United States passed its $369 billion (£307 billion) green subsidies programme. The programme was approved by Congress in August as part of Joe Biden’s Inflation Reduction Act (IRA).
Meanwhile, the EU is concerned that Washington’s subsidy programme will divert investment away from the continent, affecting automakers.
Though the EU is planning its own set of retaliatory subsidies, the US appears unmoved and unlikely to change its mind.
According to reports, the EU is planning billions of dollars in subsidies for its industries that will be impacted by the US subsidy package, leaving the UK vulnerable to both the US and the EU.
As a result of leaving the EU, the UK is caught between the two sides, attempting to persuade Washington to take a small step back, which may result in the UK being negatively impacted by both the US and the EU.
According to UK officials, Kemi Badenoch has been privately negotiating with the US to reduce the country’s restrictions on electric vehicle subsidies by providing exemptions.