UK Companies Could Gain Competitive Advantage From Trump Tariffs

Article content

(Bloomberg) – Supply lines are a daily news message that tracks world trade. Subscribe here.

Article content

Article content

Donald Trump's preference to British exports gives the country's companies a competitive advantage that can protect the economy from the worst trade war in Washington, according to the economists.

Trump has placed a 10 % duty on all imported British commodities, which is the lowest available, as part of the “Tahrir Day” tariff for trade partners in America, a step that shattered the markets and threatens to raise the entire global trading system.

Article content

But experts said that the United Kingdom is among those who have been in mind because low definitions give manufacturers a competitive advantage and that the government is in a good position to secure a deal with the United States for further cuts in the fees.

David Wayne, the manager of Conmech, a steel engineer who specializes in northwest England, told BBC Radio on Thursday that although “for many industries it will be completely disturbing, they offer an opportunity for ourselves” because Conmech will now be cheaper in the United States than their competitors abroad.

“In fact, we must be more competitive in the United States market than we have been for several years,” he said. Trump wants to build the local American industry, but that will take some time and America will still need imports.

The government is in talks with the United States on a 10 % trade line to reduce the baseline rate or raise a 25 % tariff on steel in the UK and cars about 10 %. The options on the table include dropping the UK tariff for American agriculture, canceling the digital services tax on American technology companies and agreeing on new regulations on technology.

Article content

Article content

Alan Winters, a commercial expert and professor at the University of Sussex, said the direct impact of definitions on the UK will be small. “If someone hit your competitors more than hitting you, you will get a competitive feature,” he said. “If we get a trade agreement with the United States, we can get gains.”

Sussex Complete Trade Policy Center, estimated at Friday, “modest losses to the United Kingdom” by 0.1 % -0.3 % of GDP. If the UK is able to conclude a deal with the United States, the economy “will make a 0.1 % positive profit.” The paper added that the United States “will suffer more than any other country” from its own measures.

“One of the best opportunities to move away from a deal,” said Britain. “In the short term, there is a lot of uncertainty but you can see how the pieces may eventually fall that makes the UK more competitive.”

“It is possible that it is useful”

Britain's 10 % tax makes it the largest source of commodities in the world to obtain a basic tariff. China faces a 34 % tariff and has somewhat avenge. The European Union countries have 20 %, and exporters in Southeast Asia were badly hit. Mexico and Canada were excluded where there are separate arrangements.

Article content

Trump told correspondents on Thursday that he believed Starmer “was very happy with how we dealt with them.”

While realizing the immediate repercussions will be harmful, said Raoul RuParel, director of the Boston Consulting Corporation, said that the relative effect of the preferential duty “is likely to be useful and may have some positives for the United Kingdom, especially if other countries have retaliated and the United Kingdom has not completed.”

Robarel added that the commercial conversion to the United Kingdom of goods that would go to the United States might reduce prices and allow England to reduce interest rates more quickly. He said: “At the present time, the customs tariff seems to be more thumb than inflation in the United Kingdom, and this is useful for living levels and borrowing costs.” “Not everything is bad for the UK economy.”

The markets responded to Trump's definitions by predicting that the Bank of England would reduce prices three times this year, as it previously expected only two.

The International Monetary Fund has warned of a “great danger” of the global economy, and Bloomberg's economy has estimated that the direct impact of the identification messages on UK exports could knock up to 0.4 % of GDP.

“There is the potential trend of some companies in the United Kingdom and the United Kingdom itself in the medium term”, but he warned that any possible gains can be bombed due to the global recession caused by commercial shock or constant uncertainty.

Article content