The transatlantic alliance needs a “boot up the backside”, Peter Mandelson has warned, saying that Britain must work closely with the US to take on Chinese technological dominance.
The UK’s ambassador to the US argued Beijing represents a “far more dynamic and formidable strategic rival than the Soviet Union ever was”, urging Britain and the US to combine forces to “drive the scientific breakthroughs that will define this century”.
“Rather than stifling these transformative technologies through excessive regulation, our two governments must unleash their immense potential for human benefit and Western advantage”, he said.
While Donald Trump almost blocked Lord Mandelson’s ambassadorship because of concerns about his links to China, the Labour peer now appears to have turned against Beijing, saying there is “there is nothing in this world I fear more than China winning the race for technological dominance”.
David Cameron’s Conservative government sought closer economic ties with Beijing and hosted a state visit for President Xi Jinping in 2015, known as the “golden era” of relations.
But speaking at the Atlantic Council on Tuesday, the ambassador warned that there is now a “new dynamic between China and the west”, saying Britain and the US “must not be afraid... to take on aspects of China’s behaviour and policies”.
He also urged European countries to step up their defence spending and stop “living in a fantasy created by the US security guarantee”, accusing Europe of having spent decades relying on the US to defend it in the face of global threats.
Lord Mandelson said: "If we are serious about rebuilding confidence in the international system… we need to devote an enormous amount of energy and goodwill to preserve, sustain and deepen the alliances which exist between like-minded countries for the UK and the rest of Europe.
“We must reboot the transatlantic alliance. Indeed, a boot up the proverbial backside is needed now to deliver peace through strength across three interconnected domains - military, economic and technological."
Lord Mandelson added: "For my generation, the 20th century, gains in peace and prosperity were thought of as a European peace dividend. I now recognise it as an urgent bill, that peace dividend - an urgent bill for decades of defence under-investment, a payment that is long overdue.
"We have lived in a fantasy created by the US security guarantee, complacent that a friendly heavyweight across the water would be always there when the going gets tough.”
In February, the prime minister outlined plans for Britain to spend 2.5 per cent of its GDP on defence by 2027, up from 2.3 per cent currently, following repeated warnings from Mr Trump that Europe must spend more on its defence.
It comes after the International Monetary Fund (IMF) warned that trade tensions from Donald Trump’s sweeping global tariffs will dampen the UK’s economic growth next year, despite upgrading this year’s growth forecast for Britain.
The IMF said the UK is experiencing an "economic recovery," with GDP expected to rise by 1.2 per cent this year, a step up from the 1.1 per cent growth it predicted in April.
Meanwhile, it maintained its projection that the UK economy will expand by 1.4 per cent in 2026. But IMF economists said this will come despite global trade tensions wiping 0.3 percentage points off growth for the year.
The forecasts were published just weeks after Britain struck a historic trade agreement with the US last month that will slash the bulk of Mr Trump’s tariffs.
The deal saw US tariffs on cars immediately cut from 27.5 to 10 per cent for up to 100,000 vehicles – almost the total number exported last year. Levies on steel and aluminium will be reduced to zero, however, a general 10 per cent tariff for other goods will remain.
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