On one hand, Trump is positive, stating that he wants to do a trade deal as soon the UK completes Brexit, probably in mid-2019. Anxious to move a trade deal forward after the Brexit result, Theresa May hopes to have a meeting with Trump in January 2017. The aim is to agree a pro-trade “statement of intent” between the US and UK.
However, Trump is infamous for his ‘putting America first’ stance, so the UK needs to be careful to get a trade deal that works for both countries. He’s already fired warning shots at countries such as China and Germany for exporting far more to America than they import. But, seeing as we aren’t in that (fortunate) position, perhaps Trump will give the UK a chance. There’s a lot at stake:
Opportunities for UK businesses:
- Increase our healthy export trade with America. The US is the UK’s biggest single export destination, with a market worth around £3.5 billion.
- Build on existing success stories. We already export everything from gin to high-performance cars. But, there’s scope for improvement.
- There could be billions up for grabs. If we had stayed in the EU, we might have eventually benefited from a trade deal with the US. This could have added £10bn annually to the UK economy. Any such EU trade deal looks remote with Trump in power, but he appears interested in a deal with the UK.
- We’re each other's largest foreign investors. This investment supports around one million jobs in the UK and the USA. An Anglo-American trade deal could lead to even more jobs.
- There’s no language barrier. Breaking into a foreign market usually involves mastering another language, something of an issue for many Brit Businesses. Not so with America.
- Reducing tariffs could increase US imports. We buy already buy around £2.9 billion worth of goods from the USA. We only buy more from Germany and China, so some British firms could be under even more pressure.
- Jeans and cars could flood into the UK. We’re not big on manufacturing jeans, but our car industry could face even greater competition.
- UK products will need to pass strict US rules and regulations. Everything from cars to soft furnishings and brewers to insurers will need to have their products and services approved by US regulators. These tests would be expensive. What’s more, there are often different rules for each of America’s 50 states.
- We could be swamped with cheap food imports. Great news for cash-strapped consumers, but US food giants benefit from less strict regulations on pesticides and food additives. Quality could go down, and competition would increase.
- UK companies could have to create jobs in the US. Depending on what your company attempts to sell, this might not always be feasible.
Although Donald Trump wasn’t the favourite to win the US presidential election, his unexpected victory could provide opportunities that just wouldn’t have been available if Clinton had won.