UK/US Trade Deals: How Does This Affect the US?
8 February 2017
Author: Anton Dell
If you’re up to date with world news, you will have heard murmurs of the UK and US trade market.
With a potential trade deal between the UK and the US on the horizon, there are a number of benefits for prospective US clientele to expand in their export into the UK. Despite earlier claims from the former president of the United States, that the UK would be at the back of the queue in getting free trade deals, President Trump and PM Theresa May have stated that they are likely to begin work on a UK/US deal immediately. This deal is set to be implemented 90 days after the UK leaves the EU and is eager to “increase the wealth and welfare of both partners”.
Currently, the US export market is one the of the largest, most competitive and ‘technologically’ advanced in the world. Because of this the US export market has low regulatory barriers, minimal language barriers, access to global supply chain, which can lead to exports for other markets and a strong rule of law. All good attributes for the US market.
Current export situation
Currently, the export state permits trade between the UK and the US on large trade exports for items such as industrial chemicals, live animals and vegetable fats, to name a few.
According to BBC, when Britain exports to a single nation it stands to make a lot of profit and currently the US ranks as the UK’s biggest export destination, with profits hitting £3.5bn. In addition to this the BBC also says, “the US and the UK are each other's largest foreign investors, and "this investment supports approximately one million jobs in each country", which of course means US brands stand to make profit from any UK trade deals.
What could this new deal mean?
Although we’re yet to find out the innate details of the forthcoming deal, it is said that trade tariffs could be cut down tremendously between the two countries. Forbes says, “Trade tariffs between the US and UK could be slashed and workers will be free to move more freely, under plans set to be discussed by Theresa May and Donald Trump this week. The outline of a historic trade deal will be one of the main topics when the PM meets the new commander-in-chief in Washington.” This would essentially mean that trade costs would be cheaper in future between the UK and the US, and that freedom of movement in export would become a little bit easier for brands and companies.
Although we know little, one thing we do know for certain, is that the free movement of workers, will not be on offer within this trade deal.
Should the deal go ahead, there are a number of opportunities for US brands within the UK at this time. In terms of brand opportunities, with the recent athleisure trend on the rise and sneakers all the more accessible to women, the trend is huge for UK consumers. Nike for example, is one the US biggest brands occupying space within the UK. If the deal goes through, this would be an opportune time for US brands to export in large numbers at little cost, to the UK market. Bigger brands like Nike would stand to make further profit from the trade deal.
If as a US brand you are keen to export to the UK, now is an opportune moment to execute said opportunity. With export costs currently at a lull, funds are expected to decrease rapidly making exports and trade relations much cheaper between the UK and US.