British MP to Trump: Lay off tariffs if you want more defense spending

LONDON — The government’s message to Donald Trump should be to “lay off tariffs” if it wants the U.K. to invest more in defense, according to Liam Byrne, chair of the business and trade committee.
The president-elect has demanded that NATO allies spend a greater percentage of their GDP on defense — a demand which Byrne says the U.K. should use as leverage when faced with Trump’s threat of import tariffs of up to 20 percent.
“What the U.K. has got to do now is basically construct this grand bargain where we draw closer to our defense allies,” Byrne told the POLITICO Financial Services UK Summit Thursday.
“With the United States, the case that we’ve got to win is, look, higher duties means weaker defense. In fact, we’ve just run this calculation this morning. If you implement 20 percent tariffs on the U.K. that basically offsets your increase in defense spending.
“So we think that increasing tariffs to 20 percent, that impact on economic growth probably knocks up to 2 billion off defense spending by 2030 because if you’re spending 2.5 percent of GDP and your GDP is smaller, then your defense spend is going to be lower.”
“So there’s actually quite a straightforward case to win with President Trump, that if we want stronger defenses then lay off the tariffs.”
Economists have warned of a hit to U.K. GDP of up to 2.5 percent if Trump goes through with his threat to impose tariffs on U.K. goods, with billions of pounds worth of trade at risk.