For or against, 2016 was a year of great change. The British public voted to leave the European Union on the 23rd of June, meanwhile the American public elected Donald Trump as their next President on November 8th. What do these two factors have in common? It may be more than you think.
The irony is that President Obama once stated that Britain would be “at the back of the queue” for any trade deals after voting to leave the EU. Strong contender for Office: Hillary Clinton seemed inclined to agree with him. However, things seemingly didn’t go as the politicians had predicted. With Trump stepping up as the 45th President on January 20th, he has unveiled many of his plans during his first 90 days in Office. One of which involved a planned trade deal between the UK and US after Britain has left the EU.
The Prime Minister and President-Elect became close over the Christmas period, after she sent him a copy of Winston Churchill’s letter to the American people in December 1941 which built unity between the countries during the Second World War. Regarding a meeting with the Prime Minister, Trump stated:
“We're going to work very hard to get it done quickly and done properly. Good for both sides.”
“I will be meeting with Mrs May. She's requesting a meeting and we'll have a meeting right after I get into the White House and it'll be, I think we're going to get something done very quickly.”
While Theresa May should keep in mind that Trump has been doing business his whole life, he’ll keep his cards to his chest until the opportune moment, it’s also a great chance for a trade deal both parties can benefit from. The big question however is what this deal could mean for the industry.
If a Free Trade deal is reached between the UK and US it could change how business operates between the two entirely. US cars could be shipped or manufactured in the UK without tariffs, it could also lead to an improvement for financial services. It could have a change in the value of the pound next to the dollar, it is debatable whether it would be for the better or worse. Travel to and from the US may be less costly and need less requirements than security has previously demanded. A deal would be beneficial for organisations with branches in both countries, allowing for further networking between firms and customers across the globe.
The UK-US trade deal has raised many concerns for the European Union, as many countries now want to replicate the UK’s 2016 referendum. Some believe Trump Is looking towards the other nations for trade deals with those who would wish to leave the European Union, developing his own trading network to take on the single market as the biggest source of trade in the world. When asked about EU supporters such as Angela Merkel, Trump told reports that while he has “great respect” for her, she is “ruining Germany, making a catastrophic mistake.” In regards to trade with EU members he said in an interview: "I am going to treat everybody fairly but it wouldn't make any difference to me whether they were in the EU or not. The UK would certainly not be back of the queue, that I can tell you."
Either way, leaving the EU is going to take some time, trade deals are merely in planning stages and can take much longer than the 2 years it takes to trigger Article 50. Canada and the EU have been discussing a trade deal for over 7 years, the Government will need to schedule trade deals for a secure Brexit the UK will benefit from.