Fallen in the middle: British companies prepare for Trump's influence in global trade war | International Trade

“We are currently vulnerable,” said Fiona Conor, managing director of Trust Electric Heating, a radiator maker based in Leeds, who has been considering expanding to the U.S. market.

As Donald Trump's second term as U.S. president, Conor feared that his choice would be restricted, as global trade wars across the UK would be limited.

Business leaders hope the UK will avoid U.S. tariffs, but experts warn that the split in international transaction orders will still have a shocking impact on a relatively small open economy, such as the UK. Trump could suffer a significant impact when it came into effect early March in the danger of a 25% tariff on steel and aluminum announced this week, including British exporters.

As the owner of a fast-growing business, Conor has been flying back and forth between Leeds and New York in recent months, establishing links in the world’s largest economy to sell its family-owned award-winning power radiator.

"Now with this tariff threat, I want Keir Starmer to wear his big boy pants and have some strong negotiation skills. I'll walk there, look at the white guys in the eyes (Trump's) eyes, shake hands and finish The deal,” she said.

Irish Prime Minister Micheál Martin (left), Keir Starmer (stand, right) at the EU summit in Brussels. Starmer's administration is trying to stay comfortable with President Trump, while also establishing ties with the EU after Brexit. Photo: Olivier Hoslet/AP

The United States is the UK's largest personal trading partner, with a relationship worth nearly £30 billion a year. Most people are in the services of banks, law firms and accountants in the City of London and Wall Street, which mainly involves not being subject to tariffs. FDI between the two countries totaled more than £1.

UK commodity exports - dominated by automobiles, pharmaceuticals and pharmaceutical products, mechanical generators and scientific tools - are worth £58 billion by the end of September 2024. The goods imported from the United States are worth only £20 billion less, led by oil, and generators.

When Trump targeted tariffs, the Stamer administration tried to be comfortable with the president, while also rebuilding ties with the EU after Brexit. The Prime Minister will visit Trump later this month, while British ministers will join the United States this week, refusing to sign an AI agreement at Paris’ landmark Paris summit to conquer the White House.

Some economists usually have a softer tone than other world leaders because he uses post-Brexit independence to trade with the United States, the EU and China, so Steamer's strategy can be rewarded. However, others warn that Britain outside the EU is in a weaker position and ultimately need to choose one side.

"The scale of the UK economy and its high openness of trade means that if it does have limited pressure to retaliate in a truly meaningful way," former government trade adviser Rhys Davies said now on consulting firm Flint Global.

“While the UK will seek to prepare for careful calibration of countermeasures to achieve maximum political impact and strengthen broader trade relations, the best hope is to fly under radar, while Trump focuses on countries with ongoing U.S. trade deficits .”

Trump has largely focused his attention on Canada, Mexico and China, which exports to the United States far exceed their imports. The transaction relationship between the UK and the US is more balanced.

Starmer can also rely on statistical quirks. U.S. data shows that its commodity trade surplus with the UK is about $1.2 billion (£9.6 billion), but the U.S. surplus with the US is about £20 billion. The National Bureau of Statistics blames part of the mismatch on the definition of territory, unlike the United Kingdom, including data from the United States, including official dependencies.

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But business leaders remain concerned about the distinctive risks of the U.S. president. Research by the British Chamber of Commerce shows that 63% of manufacturers believe exports will be affected by U.S. tariffs.

Europlaz Technologies is a high-precision product manufacturer based in the Essex-based medical device industry, another company that has found itself. The US market is the largest destination for UK scientific tools exports, worth nearly £300 million in 2023.

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Rory O'Keeffe, business director of Europlaz Technologies, said Trump's "sledgehammer" approach could cause a "business earthquake" to his company.

“Our three of our largest customers have a big presence in the US and many of our UK customers rely on the US market to earn sales of the Lions. The reality is that tariffs will mean higher costs and higher costs It means higher prices and less competitive,” he said.

Liberal Democratic leader Ed Davey urged Starmer on Wednesday to impose "Tesla tariffs" if Trump pushes for plans to crack down on the UK steel industry.

"Sit down and hope Trump won't hurt us, it won't work. The only way we can solve Trump and (Elon) Musk is to negotiate from a strength standpoint and show that Britain won't be in the whole. Being bullied in the pond,” he said.

Even if Britain manages to avoid specific tariffs, experts warn that a larger slowdown in international trade will hurt Britain. Global supply chains mean that UK companies could still be hit by U.S. tariffs on other countries, such as companies shipped by manufacturers to Mexico or the EU, which are used to enable finished products exported to the U.S. market.

"Slowership in other regions may have a greater decay effect on the UK than effective tariffs," said Anthony O'Brien, head of market strategy at Phoenix Group.

The UK response may also be important. Free market economists urge Starmer not to retaliate against Trump’s targets and believe that while British exporters will be attacked, British consumers will avoid higher prices for U.S. goods.

Nevertheless, such a result will still hit the UK's economy. The Bank of England, which is closely monitoring the situation, warned that any unpicky global trade is detrimental to growth. Commercial investment can be placed on ice, while U.S. tariffs on other countries, including the world's largest exporters, could cause their products to be transferred to the UK, flooding the market.

John Glen, chief economist at the Chartered Procurement and Supply Institute, said the UK is in a narrow state. "We have the opportunity to stand alone (after Brexit) and reach a deal with Trump. Will he do that? I don't know. Will we be in a strong negotiating position? I don't think so. We can be in the EU and us Do you act as a mediator?”