By Harry Mottram: The reverberations of the America presidential election continue to be felt with concerns that tariffs on British goods could stifle business. The USA is this country’s largest export market after the European Community at 22.1% while the EU is number one on 41.3% – which goes some way to explain the concerns over the Brexit Business Deal signed by Johnson.
Hiking tariffs will set in motion a tit-for-tat series of reprisals as other nations respond to this handicap for international trade. Some commentators say it could cut growth in the USA economy and see inflation rise with a knock-on effect here. Jaguar Land Rover sell a lot of Land Rover Defenders in the US and with 10% added to their costs that could kill the market – not just for car makers but for the likes of BAE Systems and Rolls Royce.
King’s College Professor Jonathan Portes, Professor of Economics and Public Policy said: “While a major crisis is unlikely in the short-term, Trump’s tax cuts would certainly raise the risk of higher long-term interest rates -which would further damage both the UK economy and our fiscal position.”
Ian Carrotte of ICSM Business Membership Group said: “It’s an old saying that if America sneezes the UK catches a cold. Tariffs go against most rules of international trade. If China is as suspect is using massive subsidies to undercut prices in the West, then there’s a strong argument to hit them with tariffs – not the UK as we play by the rules. If tariffs are placed on the UK’s publishing sector – and we sell nearly half a billion pounds worth of books and printed literature in the US a year – then we have a problem.”
The news of the Republican victory has given a boost to the British stock market – mainly on the basis Trump didn’t mention the T word in his victory speech. Whether he lives up to his promises of evicting migrants in their millions, ending two wars with two phone calls of slapping 100% tariffs on Chinese goods remains to be seen. One should always remember that not all promises made during an election campaign are kept.
ICSM CREDIT
For information on ICSM visit www.icsmcredit.com or call 0844 854 1850.
ICSM, The Exchange, Express Park, Bristol Road, Bridgwater, Somerset TA6 4RR. Tel: 0844 854 1850. www.icsmcredit.com. Ian.carrotte@icsmcredit.com