USA and UK They announced They open negotiations on a potential trade Pact after visiting Sir Keir Starmer in Washington this week.
US President Donald Trump raised the look for “real trade agreement” that could see that the UK avoids threat Tariff, while the oldmer was more cautious, referring to the “new economic contract with advanced technology at its core”.
However, the history of recent trade negotiations between London and Washington was not easy.
What form could any American entry agreement have?
This remains an open question but StarmarReference to a “new economic agreement” suggests that the UK provides a pact that is far from a complete trade contract.
This avoids that the UK will enter into sensitive areas such as access to American pharmaceutical and agricultural products that would require politically controversial concessions to accept goods such as chlorine -washed chicken, which would be unpopular with consumers in the UK.
Instead, trade experts expect this pact to be much closely focused, with possible models, including Digital trade agreement Trump signed with Japan in his first term.
On the United Kingdom side, a possible template is an agreement Signed with India Last July to increase cooperation in critical minerals, semiconductors and technologies in emergence to “enhance the existing associate efforts”.
Former British trade department official Allie Renison, now in the consulting SEC Newgate, said the agreement is likely to include promises on regulatory cooperation in AI and other advanced technologies, while he wanted to avoid or even reduce tariffs to industrial components of the critical companies for the companies. The reconciliation of export control in countries like China could also be on the negotiating table, she added.
How blessed could the economy agreement in the UK?
The EU is by far the largest market in the UK, taking twice the export of goods and services from the USA. But it still leaves the US as one of the biggest destinations for British products.
In 2023, the UK performed £ 60.4 billion in the United States, making it the only largest export partner in the country, making 15.3 percent of all exports of goods. The United Kingdom has performed an 186 billion euros in the EU during the same period.
In this context, the greatest benefit of the trade trade with Trump would be to avoid creating the costs that the EU is now facing after the threat of the US president of 25 percent of tariff on the block of the block.
The largest export in the UK in the United States includes pharmaceutical products, cars and electricity generators. “In the UK, this is important if we can avoid hitting us by tariffs,” Erik Britton said in Economic Consultancy Fathoma.
Dave Ramsden, Deputy Governor of Bank of England, said on Friday that uncertainty was related to trade after Trump’s return to the White House “may already affect the global and British economy through the financial markets and through the trust channel.”
William Bain, head of trade policy in British Chamber of Economic Chambers, said that if the contract could be reached, to provide companies with a stable basis for bilateral investment of 1.5 titles between the two countries, including “cooperation in technology and innovation, providing continuous growth in bilateral services trade”.
Britton said it would be further benefits if the UK could remove some obstacles in the areas of key comparative advantage for the UK-on the example, its top scientific sector, which is sold by corporate Behemots in the US, or digital and creative industry.
The UK in the United States performed about twice as much in the United States – in the goods – £ 126 billion 2023, which makes up about one quarter of all the exports of services in the UK.
“The obstacles for these industries are not big, which is why the United Kingdom is doing well together, but maybe more can be done here through these discussions,” Britton added.
What could they ask for now?
Trade packages are two-way negotiations and experts warn that one key risk for the UK is that Trump’s administration will stimulate a much wider agreement, covering areas such as regulating technology and more access to American pharmaceutical companies for NHS.
“The challenge for the Government in the UK will limit the discussions to the areas of mutual interest or if concessions will not be too painful,” said Lowe Sam, the leadership of a trade policy in Consultancy Flint Global.
Even if agricultural standards can be avoided, Trump’s administration signaled through it Investigation on “reciprocal” trade measures That it takes a very wide view of what is protectionist, which extends far beyond the tariff on VAT, digital taxes, the payment of carbbling boundaries, and even the wider internet regulation.
“If Trump starts looking for an exemption from VAT, that’s a huge problem,” Lowe added.
The White House also has a special said That his review of protectionist policies in the EU and the UK will include any measure that “encourages US companies to develop or use products and technology in ways that undermine speech freedom or stimulating censorship.”
Vice -President JD Vance, who will conduct negotiations, criticized what he called “violations of speech” regulator in the UK, asking whether London in the UK would demand that London dilute some of his existing network protection.
Renison at Sec Newgate Seconda said that social media and internet regulations are an area that will probably be “shown tickling” for London. “It would not be surprising if the implementation of the Law of the UK is launching the UK’s internet damage and the recent digital market law in conversations with the US, along with questions that has things that he believes are unjust trade barracks such as our digital services tax.”
How will the US business affect EU-UK reset?
The UK will soon embark on an “reset” relationship with the EU to improve trade and cooperation agreement, signed after Brexit, including a potential contract to remove border checks of agricultural and plant products and We are referring to the carbon market in the UK and the EU.
Had to adopt American agricultural standards of Torpedo hope in the so-called “EU Veterinary Agreement” with the EU, while the US-based concessions on digital regulation, protection of data and carbon taxes also risked the divisions with Brussels.
Analysts warned that the UK could not afford to distract from his efforts to give up the obstacles to Europe, given the huge proportion of the UK trade.
“The barriers we have set up against the EU are far more important than anyone we can bring down with the US,” said Paul Dales, a British economist of Capital Economics.
