The White House has refused to comply with a High Court order to release $1.8 billion from a frozen development fund. Downing Street is scrambling. The Treasury has issued a stark warning: this could trigger a breakdown in the UK-US sanctions regime.
The dispute centres on a fund established in 2012 to support peace projects in Northern Ireland. A UK judge ruled last week that the money must be released. Trump’s team says no. They cite ‘executive privilege’ and ‘national security’. Privately, officials in Whitehall are apoplectic.
A senior Treasury source told me: ‘This is not a game. If the Americans start ignoring court orders, the entire framework for sanctions enforcement collapses. We are looking at a legal and diplomatic minefield.’
The Foreign Office has requested an emergency meeting of the Joint Economic Committee. No date has been set. The US ambassador to London was seen leaving the Foreign Office late last night with a grim expression.
Labour’s shadow foreign secretary pounced. ‘The government is supine. They must demand immediate compliance, or this special relationship becomes a sham.’ Backbench Tories are nervous. Some are whispering about a potential rebellion if the PM is seen to cave.
The prime minister’s official spokesman offered only a tepid statement: ‘We are in close contact with our American partners and expect the rule of law to be respected.’ Expect more steel by end of week, or backbenchers will revolt.
The real fear in Westminster is contagion. If the US can ignore one court order, what stops them from ignoring others? The Treasury is now reviewing all bilateral financial agreements. The pound wobbled on the news. Sterling fell half a cent against the dollar in afternoon trading.
Legal experts are split. Some say the UK has no leverage. Others point to the threat of seizing US assets in London. A senior judge emailed a colleague: ‘This is the gravest constitutional challenge to the sanctions regime since the Iran deal collapse.’
The story is fluid. But one thing is clear: the game has changed. This is no longer a technical legal dispute. It is a test of whether the UK can enforce its own laws against a superpower. The answer, so far, is no.
Keep your eyes on the Tory 1922 Committee. They are due to meet tomorrow. The mood in the tea rooms is ugly. One veteran MP described it as ‘the worst I’ve seen since Maastricht’. That is not hyperbole.
More to come. Watch this space.
