
As Donald Trump re-enters the Oval Office this month and promises a resumption of his signature trade wars, officials in Britain, long one of the U.S.’s closest allies, are heading to Beijing to push for a “reset” of the UK-China relationship and the resumption of financial and investment talks.

While Trump looks set to harden America’s China policy, and a new European Commission in Brussels keeps its focus squarely on economic security, the question is whether the UK might pay a steep price for a China strategy that looks out of sync with its closest partners.
Economic growth at all costs has been the watch-word of Prime Minister Keir Starmer’s Labour government since it took office last July. The logic runs that outside of the EU the UK can become a top destination for Chinese investment, which might in turn drive economic growth and help the government meet its aspiration for the UK to become a “clean energy superpower”.

This is not a new idea. The so-called “Golden-Era” of relations from 2008 to 2019 saw multiple UK governments prioritise securing investment from China over national security and human rights concerns. Rather than meeting the hype of increased foreign direct investment from China driving significant economic growth (China was placed 22nd for FDI into the UK in 2018 at a high point of the relationship), ministers were left unpicking Chinese investment in sensitive sectors of the UK at great cost to the taxpayer, including in telecommunications and nuclear energy.
The difference this time is that China is facing an economic downturn, a declining population, and the rigid authoritarian control of Xi Jinping which has seen crackdowns in every aspect of China’s economy from technology, higher education, to financial services.


Left: UK Foreign Secretary David Lammy meets with China’s Foreign Minister Wang Yi, October 18, 2024. Right: Chancellor Rachel Reeves meets with China’s Finance Minister Lan Fo’an in Beijing, January 10, 2025. Credit: UK Government, HM Treasury
In opposition, the Labour Party was vocal in its criticism of the previous Conservative government’s failure to stand up for human rights in China — in particular, calling for sanctions against Hong Kong officials and voting to label the treatment of Uyghurs in Xinjiang as “genocide”. However, in government Labour has adopted a more pragmatic strategy of “cooperating, challenging, and competing” with China.

This policy, alongside a promised audit of the UK-China relationship, is not too dissimilar to the last government’s approach. It is little surprise that some in the UK government aspire for a China policy that emulates the “cakeism” of Germany or France, which seeks to benefit from deepening trade ties with Beijing while enjoying continued U.S. support in defence and national security. Some have also suggested that the UK follow the example of Australia’s government or the outgoing Biden Administration, which increased bilateral engagement with China.
Often missed is that both Australia and the U.S. have also bolstered their respective national security in recent years through the adoption of foreign agents registers and effective foreign investment screening regimes. This has allowed them to engage from a position of strength.
…there remains significant questions about the logic of the UK seeking to deepen relations with Beijing at a time of likely deteriorating U.S.-China relations and a slowing Chinese economy.
The UK has far less to offer in terms of trade than either country. The further reality is that in Beijing the UK is neither seen as an important nor a trusted partner. Beyond higher education and the City of London, there are few sectors of the UK economy China wants to invest in which do not touch upon national or economic security.
This has not stopped policymakers slowly pushing the UK’s China policy out of the orbit of both the U.S. and the EU. Areas of divergence include: the UK refusing to join Washington, Ottawa, and Brussels in introducing tariffs on Chinese electric vehicles; failing to introduce a forced labour due diligence screening regime; and, after heavy lobbying from pro-China business groups, postponing the introduction of a foreign agents register and classification of China in the highest tier.
At a time where the UK Government is seeking to mend relations with the European Union and avoid Trump’s tariffs, it is unclear how long the UK’s out-of-sync China policy can go unnoticed.
Far from changing its planned visits to Beijing, Trump’s re-election has led the British government to expand efforts to deepen trade relations with China. This hedging strategy has been fuelled in part by speculation that the U.S. will be an unpredictable and unreliable ally over the next four years.
Peter Mandelson discusses the U.S.-China relationship at an event hosted by the Milken Institute, October 8, 2019. Credit: Milken Institute
The decision to appoint the former minister Peter Mandelson as ambassador to the U.S. is further evidence of the government’s plan to double-down on its China strategy.
Alongside the former Prime Minister David Cameron and finance minister George Osborne, Mandelson is considered an architect of the UK’s so-called “Golden-Era” of relations with China. He has also previously lobbied the government on behalf of Chinese clients, including clothing manufacturer Shein which is seeking to IPO in London.
Mandelson has promised that he will successfully convince Trump not to put tariffs on UK goods. But given his background and his record on China, it is unclear how much traction he’ll get with a Trump Administration which includes many prominent China hawks.

For sure, the UK may be gambling on a Trump trade war with China never happening, the presence of a number of former Wall Street executives and figures like Elon Musk in the administration, as well as Trump’s own preference for striking grand bargains.
Such a strategy is a hostage to fortune. Even if Trump does seek a grand bargain with Xi, there is no guarantee that his administration would support partners deepening trade partnerships with China at the U.S.’s expense.
And whatever Trump’s intentions, it does not appear wise for the UK Government to paint a target on its back by such an overt display of “resetting” relations with China. Given the UK economy’s vulnerability outside of the European Union, the UK’s trade surplus with the U.S., and its significant reliance on American foreign direct investment , it would be viewed by many in the Trump world as an easy target for economic coercion.

Irrespective of whether the UK’s China strategy puts it in the crosshairs of an incoming second-term Trump Administration, there remains significant questions about the logic of the UK seeking to deepen relations with Beijing at a time of likely deteriorating U.S.-China relations and a slowing Chinese economy.
At the very least it will weaken the UK Government’s hand in dealing with U.S. counterparts and be cited as evidence that London is out of alignment with U.S. foreign policy priorities and not serious about national security. In the worst case scenario it will be seen by the Trump world as disloyalty worthy of being singled out for punishment.

Sam Goodman is Senior Policy Director at the China Strategic Risks Institute and the co-founder of the New Diplomacy Project, a think tank which informs the Labour Party in Britain’s foreign policy. Previously he was the Policy and Advocacy Director at Hong Kong Watch, and he worked as a political adviser to the Labour Party and a parliamentary researcher.