A summit between Boris Johnson and Vladimir Putin might be possible if Russia’s president ceases “malign activity” against the UK and its allies, the defence secretary has signalled.
Ben Wallace said it was important to offer a “path out, a path to improvement” and called a landmark meeting between Mr Putin and US President Joe Biden this week a “really welcome start“.
But the senior minister told Sky News that Western powers would judge Moscow on what it does next before any warming of ties, which have been brought to a post-Cold War low by Russia’s annexation of Crimea in 2014 and the Salisbury spy poisonings.
Image: The troops were equipped with armoured vehicles, a helicopter and a small drone. Pic: MOD
Asked if he thought the Kremlin might want relations with the UK to improve, the defence secretary said: “I hope so. But we will judge them on their actions. Diplomacy is only valuable if the actions that follow actually make a difference.”
Mr Wallace, who spoke on a two-day trip to Serbia this week, the first by a British defence secretary, also pointed to the poisoning of Russian opposition leader Alexei Navalny.
“We, unfortunately, still see malign activity. But I think we will judge President Putin by his actions,” he said.
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As to whether there was a chance of a UK-Russia summit, Mr Wallace indicated it was a possibility if the Russian president showed some positive signs of change.
“Boris Johnson is clearly open to meet anyone where there is an important step to be made and stepping towards normalising relations with Russia will obviously and hopefully come, but it comes following certain actions,” he said.
Image: Troops practised how to respond to a terrorist attack on a convoy and deal with rioting civilians. Pic: MOD
“Crimea is still illegally occupied in Ukraine and there are still things to resolve.”
Pressed again on whether he hoped such a summit could possibly happen, the defence secretary said: “I don’t want a permanent friction between Russia and the West. That is not in anybody’s interest.
“It is not in the interests of the Russian people, it’s not in the interests of the economy of Russia, it’s not in the interests of my population and constituents either.
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PM on ‘disappointing’ Russia relationship
“Listen, no one wants conflict. No one wants friction but that is not cost-free, you have to lift that based on behaviours.”
He said the Kremlin must recognise and respect “other people’s sovereignty and the international rule of law” before any improvement in relations, such as a lifting of sanctions, could happen.
Image: Mr Wallace is the first UK defence secretary to make an official visit to Serbia. Pic: MOD
“But we’ve always got to offer people a path out, a path to improvement and I think that bilateral between President Biden and President Putin is a really welcome start,” Mr Wallace added, referring to the summit in Geneva on Wednesday.
He was speaking on the sidelines of a multinational military exercise at a base in the south of Serbia, about six miles from the border with Kosovo.
Troops, equipped with armoured vehicles, a helicopter and a small drone, practised how to respond to a terrorist attack on a convoy and deal with rioting civilians, as Mr Wallace, Serbian defence minister Nebojsa Stefanovic and other officials watched from a stand.
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With 70 British soldiers involved, the UK was the largest foreign contributor to the exercise – dubbed “Platinum Wolf” – which takes place across two weeks and, as well as Serbian forces, includes troops from eight other nations, such as France and the United States.
The visit by Mr Wallace is evidence of the UK’s desire to strengthen ties with a country it once bombed as part of a NATO mission during the Kosovo War more than 20 years ago, but which it previously fought alongside during both world wars.
“The Balkans matter for the security of Europe,” Mr Wallace said. “It’s always mattered. That is why 80 years ago we were standing on hills together side by side pushing back the Nazis. That importance, that geographic importance, that strategic importance still matters today.”
Image: Mr Wallace unveiled a memorial to the rescue of thousands of airmen, partisans and civilians from Nazi-occupied Yugoslavia during the Second World War. Pic: MOD
Underlining the challenges in this region, at the same time as British troops train with the Serbian military, forces from Serbia are conducting an exercise with their Russian and Belarussian counterparts in Russia.
Asked whose forces Serbia liked training with more – British or Russian – the Serbian defence minister told Sky News: “We are militarily neutral, so we don’t have to prefer to train with either, we can choose both and that’s our advantage.
He added: “We get the best from East and West in training capabilities, in learning about the tactics… As a militarily neutral country we want to work with everyone in order to get our army as professional as possible.”
The court ruled to uphold the impeachment saying the conservative leader “violated his duty as commander-in-chief by mobilising troops” when he declared martial law.
The president was also said to have taken actions “beyond the powers provided in the constitution”.
Image: Demonstrators stayed overnight near the constitutional court. Pic: AP
Supporters and opponents of the president gathered in their thousands in central Seoul as they awaited the ruling.
The 64-year-old shocked MPs, the public and international allies in early December when he declared martial law, meaning all existing laws regarding civilians were suspended in place of military law.
Image: The court was under heavy police security guard ahead of the announcement. Pic: AP
After suddenly declaring martial law, Mr Yoon sent hundreds of soldiers and police officers to the National Assembly.
He has argued that he sought to maintain order, but some senior military and police officers sent there have told hearings and investigators that Mr Yoon ordered them to drag out politicians to prevent an assembly vote on his decree.
His presidential powers were suspended when the opposition-dominated assembly voted to impeach him on 14 December, accusing him of rebellion.
The unanimous verdict to uphold parliament’s impeachment and remove Mr Yoon from office required the support of at least six of the court’s eight justices.
South Korea must hold a national election within two months to find a new leader.
Lee Jae-myung, leader of the main liberal opposition Democratic Party, is the early favourite to become the country’s next president, according to surveys.
While the UK’s FTSE 100 closed down 1.55% and the continent’s STOXX Europe 600 index was down 2.67% as of 5.30pm, it was American traders who were hit the most.
All three of the US’s major markets opened to sharp losses on Thursday morning.
Image: The S&P 500 is set for its worst day of trading since the COVID-19 pandemic. File pic: AP
By 8.30pm UK time (3.30pm EST), The Dow Jones Industrial Average was down 3.7%, the S&P 500 opened with a drop of 4.4%, and the Nasdaq composite was down 5.6%.
Compared to their values when Donald Trump was inaugurated, the three markets were down around 5.6%, 8.7% and 14.4%, respectively, according to LSEG.
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Worst one-day losses since COVID
As Wall Street trading ended at 9pm in the UK, two indexes had suffered their worst one-day losses since the COVID-19 pandemic.
The S&P 500 fell 4.85%, the Nasdaq dropped 6%, and the Dow Jones fell 4%.
It marks Nasdaq’s biggest daily percentage drop since March 2020 at the start of COVID, and the largest drop for the Dow Jones since June 2020.
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‘Trust in President Trump’
White House press secretary Karoline Leavitt told CNN earlier in the day that Mr Trump was “doubling down on his proven economic formula from his first term”.
“To anyone on Wall Street this morning, I would say trust in President Trump,” she told the broadcaster, adding: “This is indeed a national emergency… and it’s about time we have a president who actually does something about it.”
Later, the US president told reporters as he left the White House that “I think it’s going very well,” adding: “The markets are going to boom, the stock is going to boom, the country is going to boom.”
He later said on Air Force One that the UK is “happy” with its tariff – the lowest possible levy of 10% – and added he would be open to negotiations if other countries “offer something phenomenal”.
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Economist warns of ‘spiral of doom’
The turbulence in the markets from Mr Trump’s tariffs “just left everybody in shock”, Garrett Melson, portfolio strategist at Natixis Investment Managers Solutions in Boston, told Reuters.
He added that the economy could go into recession as a result, saying that “a lot of the pain, will probably most acutely be felt in the US and that certainly would weigh on broader global growth as well”.
Meanwhile, chief investment officer at St James’s Place Justin Onuekwusi said that international retaliation is likely, even as “it’s clear countries will think about how to retaliate in a politically astute way”.
He warned: “Significant retaliation could lead to a tariff ‘spiral of doom’ that could be the growth shock that drags us into recession.”
It comes as the UK government published a long list of US products that could be subject to reciprocal tariffs – including golf clubs and golf balls.
Running to more than 400 pages, the list is part of a four-week-long consultation with British businesses and suggests whiskey, jeans, livestock, and chemical components.
Meanwhile, Prime Minister Sir Keir Starmer said on Thursday that the US president had launched a “new era” for global trade and that the UK will respond with “cool and calm heads”.
It also comes as Canadian Prime Minister Mark Carney announced a 25% tariff on all American-imported vehicles that are not compliant with the US-Mexico-Canada trade deal.
He added: “The 80-year period when the United States embraced the mantle of global economic leadership, when it forged alliances rooted in trust and mutual respect and championed the free and open exchange of goods and services, is over. This is a tragedy.”
Donald Trump has announced a 10% trade tariff on all imports from the UK – as he unleashed sweeping tariffs across the globe.
Speaking at a White House event entitled “Make America Wealthy Again”, the president held up a chart detailing the worst offenders – which also showed the new tariffs the US would be imposing.
“This is Liberation Day,” he told a cheering audience of supporters, while hitting out at foreign “cheaters”.
He claimed “trillions” of dollars from the “reciprocal” levies he was imposing on others’ trade barriers would provide relief for the US taxpayer and restore US jobs and factories.
Mr Trump said the US has been “looted, pillaged, raped, plundered” by other nations.
Image: Pic: AP
His first tariff announcement was a 25% duty on all car imports from midnight – 5am on Thursday, UK time.
Mr Trump confirmed the European Union would face a 20% reciprocal tariff on all other imports. China’s rate was set at 34%.
The UK’s rate of 10% was perhaps a shot across the bows over the country’s 20% VAT rate, though the president’s board suggested a 10% tariff imbalance between the two nations.
It was also confirmed that further US tariffs were planned on some individual sectors including semiconductors, pharmaceuticals and critical mineral imports.
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The ramping up of duties promises to be painful for the global economy. Tariffs on steel and aluminium are already in effect.
The UK government signalled there would be no immediate retaliation.
Business and Trade Secretary Jonathan Reynolds said: “We will always act in the best interests of UK businesses and consumers. That’s why, throughout the last few weeks, the government has been fully focused on negotiating an economic deal with the United States that strengthens our existing fair and balanced trading relationship.
“The US is our closest ally, so our approach is to remain calm and committed to doing this deal, which we hope will mitigate the impact of what has been announced today.
“We have a range of tools at our disposal and we will not hesitate to act. We will continue to engage with UK businesses including on their assessment of the impact of any further steps we take.
“Nobody wants a trade war and our intention remains to secure a deal. But nothing is off the table and the government will do everything necessary to defend the UK’s national interest.”
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The EU has pledged to retaliate, which is a problem for Northern Ireland.
Should that scenario play out, the region faces the prospect of rising prices because all its imports are tied to EU rules under post-Brexit trading arrangements.
It means US goods shipped to Northern Ireland would be subject to the EU’s reprisals.
The impact of a trade war would be expected to be widely negative, with tit-for-tat tariffs risking job losses, a ramping up of prices and cooling of global trade.
Research for the Institute for Public Policy Research has suggested more than 25,000 direct jobs in the UK car manufacturing industry alone could be at risk from the tariffs on car exports to the US.
The Society of Motor Manufacturers and Traders (SMMT) had said the tariff costs could not be absorbed by manufacturers and may lead to a review of output.
The tariffs now on UK exports pose a big risk to growth and the so-called headroom Chancellor Rachel Reeves was forced to restore to the public finances at the spring statement, risking further spending cuts or tax rises ahead to meet her fiscal rules.
A member of the Office for Budget Responsibility (OBR), David Miles, told MPs on Tuesday that US tariffs at 20% or 25% maintained on the UK for five years would “knock out all the headroom the government currently has”.
But he added that a “very limited tariff war” that the UK stays out of could be “mildly positive”.
He said: “There’s a bit of trade that will get diverted to the UK, and some of the exports from China, for example, that would have gone to the US, they’ll be looking for a home for them in the rest of the world.
“And stuff would be available in the UK a bit cheaper than otherwise would have been. So there is one, not central scenario at all, which is very, very mildly potentially positive to the UK. All the other ones which involve the UK facing tariffs are negative, and they’re negative to very different extents.”