LONDON, Nov 29 (Reuters) – Britain is set to convince Donald Trump that Britain’s largely services-oriented trade with the United States should be exempted from its harshest tariffs – even as London begins to cautiously rebuild relations with the European Union and strengthen commercial ties with China.
Trump has threatened blanket tariffs of 10% to 20% on nearly all goods imported into the United States upon his return to the White House in January, and this week vowed to impose significant tariffs on goods from Canada, China and Mexico on his first day in office.
In Britain’s trade-sensitive economy, it could undermine attempts by the Labor government elected in July to boost growth, which is its top priority.
After Brexit has complicated relations with the European Union, its largest trading partner, there is a strong case for maintaining and strengthening the partnership with the United States, which already accounts for about a fifth of Britain’s total foreign trade.
While Trump’s ire is directed at countries with which the United States has a trade deficit, both the UK and the US simultaneously report trade surpluses with each other – due to differences in the way national statistical agencies operate.
Moreover, Trump’s main target is widely seen to be the import of manufactured goods, most notably German luxury cars, while more than two-thirds of Britain’s exports to the United States are services rather than manufactured goods.
“In my view, the criticism of some European countries that was voiced during the presidential campaign does not apply to us,” Business and Trade Secretary Jonathan Reynolds said this week, adding that London would still stand up for freedom in its dealings with the Trump administration. trade.
“We must always be prepared to advocate for open, transparent and free trade relationships around the world.”
The goal is to work with Trump while eliminating trade barriers with the EU, although one of the US president-elect’s advisers suggested Britain may have to choose between the two options.
While London has ruled out a return to the EU’s single market or customs union, it is seeking a reset in relations with mainland Europe and hopes to secure a new deal to cut border checks.
Business and Trade Committee Chairman Liam Byrne noted that the push for closer relations with the EU could reduce the likelihood of a full-fledged free trade agreement with the United States. However, in his opinion, such an agreement is rather elusive, and it is more realistic to achieve less ambitious pacts on individual sectors that could be concluded to avoid tariffs that are not in anyone’s interests.
“In my view, a closer relationship with the European Union will bring us great benefits in the shortest possible time, and I do not believe that it will completely stop the good trade cooperation with the United States,” Liam Byrne told Reuters.
More than 40% of UK exports go to the EU, compared with 22% to the US, according to official figures.
AT A DEAD END
EY UK’s George Riddell said exporters could find themselves in a situation where cargo leaving the UK this year would be subject to a new tariff regime by the time it arrives.
“Right now, businesses have to engage in scenario planning without a clear idea of what will happen next,” he said.
In addition to closer ties with the EU, the UK is showing increased openness to cooperation with China, despite Trump’s threats to impose tariffs.
Prime Minister Keir Starmer met Chinese President Xi Jinping at the G20 summit in his first high-level conversation since 2018; Treasury Secretary Rachel Reeves plans to visit Beijing in 2025.
The British will find it extremely difficult to play the game on all fronts because the problems are too many and varied, said Simon Sutcliffe of Blick Rothenberg. He added that London may prefer to focus on ties with the EU and China and wait out possible tariffs from Trump.
Liam Byrne noted that London may introduce restrictive measures in trade with China to protect the economic security and interests of the United States. However, Flint Global’s Sam Lowe believes the UK’s trade ties with China may rankle Trump more than its relationship with the EU.
“I think it is likely that Donald Trump will ask the UK to impose new tariffs or trade restrictions on China in exchange for concessions from the US,” he said. “And this will no doubt put London in a difficult position.”
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## Special Report: Can Britain Weather the Storm of Trump’s Tariffs?
**world-Today-News.com,london**
With Donald Trump poised to return to the White House,fears are mounting over the impact of his threatened blanket tariffs on the global economy. While countries like Canada, China, and Mexico brace for immediate consequences, Britain faces a unique challenge: navigating a potential trade war while rebuilding its relationship with the EU and strengthening ties with China.
To shed light on this complex situation, we sat down with **Professor Eleanor Davies**, Director of the Center for International Trade and Investment at the London School of Economics.
**WTN:** Professor Davies, how significant a threat do Trump’s proposed tariffs pose to the British economy?
**Professor Davies:** The potential impact is considerable.Although Trump’s rhetoric primarily targets manufactured goods,a blanket tariff on all imports would undoubtedly ripple throughout the global economy,affecting British businesses and consumers alike.
**WTN:** Britain’s exports to the United States are largely service-based. Can that be leveraged to shield the nation from the worst of Trump’s tariffs?
**Professor Davies:** That’s a crucial point. While the US statistical reporting may suggest a trade surplus with Britain, the reality is more nuanced. Our strong services sector, comprising finance, insurance, and tourism, offers a degree of protection. The Trump management appears primarily focused on manufactured goods, making it harder to justify imposing heavy tariffs on British services. However, this doesn’t guarantee immunity. Secondary impacts, such as a global slowdown triggered by trade wars, can still substantially affect the UK.
**WTN:** Considering Britain’s strained relationship with the EU post-Brexit, how crucial is maintaining a strong trade alliance with the United States?
**Professor davies:** Essential. The US remains a vital trading partner for Britain, accounting for a significant portion of our foreign trade. Nurturing this relationship is paramount, particularly with the ongoing uncertainties surrounding Brexit and the evolving trade landscape.
**WTN:** Business and Trade Secretary Jonathan Reynolds expressed optimism about navigating trade relations with the Trump administration. Is that realistic?
**Professor Davies:** There’s no doubt navigating the Trump administration will be challenging. Though, highlighting the differences in trade data and pointing out the unique nature of the british service-based economy are starting points for constructive dialog. London must tread carefully, advocating for free trade principles while acknowledging legitimate US concerns.
**WTN:** What steps can Britain take to mitigate the potential impact of Trump’s tariffs?
**Professor Davies:** firstly,a proactive and transparent approach to dialogue with the US administration is crucial.Secondly, diversifying trade partnerships beyond the US, strengthening ties with the EU and exploring opportunities in emerging markets like China, will lessen reliance on a single market. consistent investment in innovation and workforce skills will strengthen the UK’s competitive edge in the long run.
**WTN:** Professor Davies, thank you for your insights.
**Professor Davies:** My pleasure. The coming months will undoubtedly be challenging,but with strategic planning and a commitment to open trade,Britain can navigate these choppy economic waters.
