Don’t pick a side in Trump vs. EU trade war, Bank of England boss warns UK

Bank of England Governor Andrew Bailey warned the U.K. government Tuesday against picking sides in a possible trade war between the EU and the U.S.
The head of the U.K. central bank said Britain should maintain an “active dialogue” with both the EU and the U.S., amid fears incoming President Donald Trump will force London to choose which relationship to prioritize with the threat of across-the-board duties of up to 20 percent on American imports.
“Free trade is not about choosing one area over another,” Bailey told MPs. “This is not in the history of this country.” 
His comments echo those of U.K. Prime Minister Keir Starmer, who has insisted Trump won’t force Britain to pick between Washington and Brussels.
Trade experts have argued the U.K. needs its trading relationship with the EU more than with the U.S.
Others have put the hit to the U.K. economy from Trump tariffs at around £20 billion, while Trump adviser Stephen Moore has urged the U.K. to avoid the “more socialist” model of European economies if it hopes to land a long-coveted free trade deal with the U.S.
Speaking in front of MPs on the House of Commons Treasury committee, Bailey, who described himself as a “dyed in the wool” free-trader, said it was too early to speculate on how the promised Trump tariffs might impact the U.K. economy.
But, he said, Britain should “be in an active dialogue with the Trump administration.”
“Likewise, we should be in an active dialogue with the EU as well,” he added.
The central bank chief said the U.K. had softened the potential blow from Brexit by winning the EU’s trust for London’s large financial services industry.
“I find it hard to understand people who seem to say that we should implement Brexit in the most hostile fashion possible,” he said.