We are a nation of, inevitable, overseas traders, so our livelihoods depend on trading effectively; Any change to the global trading system affects the efficiency, and since the US is our largest trading partner, it is extremely important that we understand and prepare to handle such changes.
The Office for National Statistics (us), in its latest analysis of British/American trade, notes: “President-elected Donald Trump has promised to increase the United States rates on its international trade. The proposed rates would be a tax of between 10 percent and 20 percent on each product imported by the United States, as well as higher rates on imports from China, Canada and Mexico. “
But what are the likely real effects in the medium term, and what if something can and should we do to deal with?
Treasures -Island
In 2023, the last full year for which audited data exists, we said we imported nearly £ 58 billion worth of goods from the US (10 percent of all our imported goods) and exported more than £ 60 billion worth of goods ( over 15 percent of all exported goods).
In addition, the US is the largest import and export partner for services in the UK (more than £ 57bn and over £ 163bn respectively).
So deal with the US business – lots.
But of course we are part of various broader trade networks, not least with the EU and the Far East, so the US tariff oppositions that affect the trade blocks and individual countries with whom our trading links are strong can further, second order , have, consequences on us.
However, the promises and demands (such as the best plans) are founder of the banks of Realpolitik.
Actually
Businesses around the world must deal with changing circumstances every day; The cost of doing business is a permanent concern, especially for the increasing number of businesses trading online worldwide. It is extremely important for them to get their goods from their customers, safe, fast and cost-effective.
The management needs are supported by the global airlines network, cargo operators and courier services that handle a large amount of goods around the world every day.
In a December 2024 report, prepared for the House of Lords Library, Professor Jonathan Portes, professor of economics and public policy to King’s College London, said that the planned tariff increase “was a serious shock to the world economy, including the UK would be ”.
The report also quotes the National Institute of Economic and Social Research (Niesr), which claims that “the measures will lead to halved growth, rising inflation and higher interest rates. Niesr said the impact level depends on whether affected countries are imposing retaliation tariffs. ‘
Eventually, it quotes Liam Byrne, LP of the Labor and Chairman of the Commons Business and Trade Committee, which described the proposed rates imposed on the UK as a ‘Doomsday scenario’. Byrne argued that the government should obtain an exemption from the US rates by offering to tighten its inner investment investment program and introduce stricter export control.
On the other hand, there are many who believe that its consequences will improve or even exist; From the report, Michael Saunders of Oxford Economics said the UK is not ‘in the leading countries of countries’ that will be influenced. Chancellor Rachel Reeves said the UK will make ‘strong representations’ to the Trump administration, which will make the matter for free trade.
To emphasize the point of second-order consequences, the IMF warned that any trade war between the US and major EU exporters such as Germany would have an impact on the British economy.
Meanwhile, the Think Tank Center for European Reform claims that the best way forward is that the UK will be “working active with Trump and keep an eye on possible mini-deeals, but otherwise continues to enter into the EU relationships deepen ”.
So, perhaps inevitable, there are divided opinions and strong views – no doubt reflect the interests and political leaning.
What all this can do, what can we do to ensure that our trade networks function as close as possible as possible?
Flight risk
First, we must remain a trusted trading partner, which means that we must support our existing global networks by providing the safe, secure, reliable and efficient cargo transport system.
In practical terms, we must ensure that our key infrastructure remains fully operational and works on peak efficiency – whatever happens with rates, our partners need to know that we can still import and export safely and quickly. That’s why our courier network is the key.
To give an example of how significant an airport is for this international system, London’s Heathrow processes almost three quarters of all British air freight, with an annual value of over £ 200bn. This is a tremendously important part of the UK’s global trade network and an important part of the national infrastructure.
We are generally well placed to cope with the disruption of this nature, but more importantly, the global online companies in countries that can be more severely affected enjoy a existence, so there are solutions that have the cost of the consumer to the Minimum limited.
In summary, we must be cautiously optimistic.
Our common language does not isolate us from the vagaries of American political shifts, but it enables us to make the important close trade relations easier to form with what is still the world’s largest economic power station.
