Bbc
Donald Trump has not been clear to know if he will impose prices in the United Kingdom, but economists warn that there are still ways that Great Britain could be negatively affected by the wider trade policies of the very president If it avoids being struck directly.
The impact could be felt by slower growth in some of the main trade partners of the United Kingdom. Industrial exports could be diverted from the United States and flood the British market and there could be impacts on our financial markets, including a possible increase in loan costs.
Asked about future prices, Trump told the BBC on Sunday evening: “The United Kingdom is out of line, but I’m sure that one … I think we can be developed.”
The president did not specify how he considered the United Kingdom to be “offline”.
One of the justifications brought by Trump to impose prices on the countries is that they have a trade surplus with the United States-in other words, they sell more in the United States that they do not import .
He said that these commercial surpluses equivalent to “massive subsidies that we give in Canada and Mexico”.
The prices on Mexico were interrupted for a month by Trump on Monday, but the president complained of the unbalanced trade with the EU, saying on Sunday: “They do not take our cars, they do not take our agricultural products, they take almost nothing and we take everything.
Thus, the United Kingdom could be considered offline in the mind of Trump – and at risk of prices – is that Great Britain also led a commercial surplus with America.
Does the United Kingdom have a trade surplus with the United States?
The United Kingdom’s office for national statistics estimates that the United Kingdom has experienced an excess of around 71 billion pounds of trade with the United States in 2023, the last full year for which we have data.
But the US statistical office, the Bureau of Economic Analysis, believes that the United States has had a surplus on its trade with the United Kingdom this year of $ 14.5 billion, or about 12 billion pounds.
How can the two be true?
The two statistical agencies examined this gap and contained that this was due in different ways to measure trade.
A factor is that the British agencies, unlike their American counterparts, do not have trade flows by the dependencies of the British crown such as the island of Man, some of which are important financial services centers and clearly affect overall figures .
Another key element, linked, seems to be differences to the extent of the services of services – things such as the bank and finance – as opposed to physical goods.
But the main thing is that there is still a certain degree of uncertainty about what precisely stimulates the overall difference of the statistics and the two agencies try to determine it.
In the meantime, the British government undoubtedly hopes that President Trump prefers to use American data, which shows that America sells more in the United Kingdom than to buy – and will focus on goods rather than on services trade.
If the president was to impose a coverage price on British exports to the United States, this would affect around 60 billion pounds sterling of goods sent in 2023, according to figures from the United Kingdom.
Pharmaceutical products represented 8.8 billion pounds of sterling in exports of goods from the United Kingdom to the United States that year, cars of 6.4 billion pounds sterling and the electricity production machine of 6, 4 billion sterling pounds.
Although the immediate impact of prices is to do more good the price of these imported goods for American companies and consumers, over time, they could reduce American demand for them, which could have a negative impact on The British companies that exported them.
If not, how could the United Kingdom be affected?
There are other ways in which Great Britain could be negatively affected by American prices on other countries.
Slower growth in the global economy and, in particular, the EU – with which the United Kingdom is still around half of its trade – would hinder the growth prospects of the United Kingdom.
If our business partners had to fall into recession due to prices, analysts say they would reduce interest rates and that their currencies would abandon value, which makes British exports to them more expensive.
“The United States imposing prices on our other business partners will always have a negative effect on the British economy thanks to its effects on supply chains and the exchange rate,” said Ahmet Kaya, of the National Institute economic and social research (NIESR).
Niesr estimated that the 25% prices that the United States has threatened to impose in Mexico and Canada could reduce the GDP growth of 0.1 percentage points in 2025.
Some economists warn exports – such as Chinese manufacturing steel – which could be diverted from the American markets due to the new prices, could be sold below the cost of production, or “spilled” in the British markets, which could Have a negative impact on sales of British steel producers.
Some analysts claim that higher American interest rates due to prices could also spread in the British borrowing markets.
One of the reasons why the British government’s borrowing costs, or golden yields, temporarily increased in January, is because bond yields of the US government also increased.
“The main threat to the British economy of Trump prices may well be the overflow of higher American interest rates, rather than prices themselves,” said economist Julian Jessop.
“The bond yields of the American and British government are now again under locking. If the Fed (American Central Bank) is more reluctant to reduce American rates, as seems likely, loan costs will also be higher in United Kingdom.”
Higher borrowing costs could slow down the British economy and also exert pressure on the British government to reduce public spending or increase taxes in order to comply with its chosen borrowing rules.
