China Power | Diplomacy | East Asia
The real problem is not Britain’s lack of engagement with Beijing, but its shrinking leverage in a China-U.S. power dynamic that London has no power to shape.
On December 1, British Prime Minister Keir Starmer delivered his most explicit statement yet on the United Kingdom’s China trade policy, conceding that “while our allies have developed a more sophisticated approach, the U.K. has become an outlier.” It was a long overdue recognition that Britain has fallen behind partners such as the European Union (EU), France and Germany in maintaining steady diplomatic and trade engagement with Beijing.
Yet Starmer’s framing obscures a deeper truth. The United Kingdom is not an outlier simply because it has engaged less with China than its allies. It is an outlier because it continues to behave as if it still possesses the strategic weight to shape its relationship with Beijing and withstand a potential backlash from Washington if it attempted to do so. Britain now sits in a geopolitical crossfire: it is obliged to accommodate China if it seeks greater market access but is constrained by its own long standing strategic alignment with the United States.
The timing of Starmer’s announcement was revealing. It came barely a month after the Busan meeting between U.S. President Donald Trump and Chinese President Xi Jinping, which temporarily paused tariff escalation. Despite Britain’s absence from the process, elements of Starmer’s language implied that the U.K. retains agency in navigating the fallout of China-U.S. rivalry.
Recent government publications reveal how entrenched this overconfidence remains. The China Trade and Investment Factsheet of October 2025 presented bilateral trade as a reflection of policy choices rather than structural dependence. Similarly, the HM Treasury’s 2025 U.K. China Economic and Financial Dialogue portrayed ministerial meetings as evidence of British diplomatic weight. In practice, these frameworks predominantly serve China’s interest in predictable access to European markets and indicate little about British leverage in a potential negotiation.
The erosion of the U.K.’s influence in global trade relations is not new. As early as 2021, critics of the government’s Integrated Review, the U.K.’s overarching national security and foreign policy strategy, warned against sustaining a great power self-image no longer matched by external perceptions.
Economic forecasts on the back of Trump’s 2025 tariffs made the limitations of the U.K.’s agency clearer. Even in the mildest retaliation scenario, British economic welfare gains were effectively zero and fell between 0 and 0.1 percent. In a broader tariff spiral, British exports to the U.S. would drop by 43.6 percent, imports would fall by two thirds and national welfare would decline by 0.5 percent. While the Busan agreements have put a pause on this potential escalation, such scenarios show that even in the “best” cases Britain’s position depends on a trade war that leaves it with almost no influence over the outcome.
So, is Starmer’s advocacy of pursuing trade with China entirely inconsequential? Not quite. Much has been made over recent years of the U.K. pursuing “performative trade” agreements post-Brexit. The U.K. government framed new free trade agreements (FTAs) with Australia and New Zealand as being less about shared history, culture, and language than it was about the allure of a region synonymous with economic dynamism. However, these agreements did more to evoke an anglophone camaraderie than provide any increased influence over the Asia-Pacific market, with the government’s own modeling showing they delivered little economic benefit to the U.K.
Beneath this sits a long-standing structural challenge. The U.K.’s close security and economic ties with the U.S. naturally shape the space available for an independent China policy, while China’s growing economic weight presents its own set of pressures. These dynamics are not new. During the Cold War, export controls influenced Britain’s approach to China, and more recent U.K.-U.S. trade negotiations raised concerns in Beijing that certain provisions might limit the scope for deeper China-U.S. agreements. While Washington and Beijing can exert pressure on each other without significant external cost, middle powers, such as the U.K., have far less room to maneuver.
These constraints explain why Starmer’s position carries risk. A move toward steadier relations with China could provoke friction with Washington, but it could also invite profound economic benefits. In 2024, the EU reported goods-trade flows worth $805 billion with China, making the bloc one of China’s top trading partners. Germany alone exported approximately $94.6 billion worth of goods to China that year. By contrast, the U.K. exported only around $38.1 billion worth of goods to China in the trailing four quarters by mid-2025, a drop of more than 10 percent.
The outcome is therefore paradoxical. Starmer has begun to move away from the notion that Britain can unilaterally reshape the global trading order, yet he has not addressed how the U.K. could deepen engagement with Beijing without triggering consequences in Washington. At best, the U.K. can limit its exposure, pursue narrow gains in services and digital trade, and adjust to decisions made elsewhere. A services dominant economy may soften the impact of future tariff shocks, but without scale or meaningful leverage, Britain remains largely reactive. It is not an architect of the system, but a spectator within it.
