Why Trump’s presidential win could be surprisingly good news for US-UK traders

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This has been a year that has turned expectations on their head. ParcelHero campaigned hard for the UK to remain in the EU; and would have preferred a more predictable and stable outcome to the US election and Hillary Clinton’s pro free-trade agreement stance. However, there are a number of unexpected silver linings for businesses shipping between the USA and UK as a result of Brexit and Donald Trump’s presidential triumph.

One short-term reason is that as the dollar wobbles, UK traders benefit. Any immediate fall in the dollar means US-made products are a more attractive buy. And purchases made from China through Alibaba are in US dollars. Alibaba is a key source of wholesale products for many UK importers. This means the price of Chinese imports through Alibaba will also fall.

The other is longer term. If USA-EU Transatlantic Trade and Investment Partnership (TTIP) free-trade negotiations collapse, a post-Brexit Britain could strike an independent deal with the USA. TTIP, supported by Hilary Clinton initially, would have abolished tariffs and delays at US Customs: a good thing for shippers and couriers. Trump is clearly against any such free trade agreements, however. But it’s not all bad news: instead he will look to strike separate deals with different trading blocs while protecting some US industries and businesses.

Trump has gone on record saying the UK will certainly not be ‘at the back of the queue’ when it comes to trade deals with the USA. Trump’s trade advisor, Dan DiMicco, has also recently stated Britain would be a higher priority than a deal for the EU, stating, “Why shouldn’t we be working with like-minded people before we do a deal with anybody else?”

Currently tariffs between the EU including Britain and the USA are all over the place. For example, the UK pays a 10% duty on US-made cars whereas US citizens pay 2.5% duties on EU-built cars. Imagine a situation where the UK (post Brexit) and USA strike a deal that removes car duties, but the USA drags its heals doing the same with the EU. A US-built Jeep, for example, would be 10% cheaper here than in the EU; and a UK-built £50,000 (US$62,000) Jaguar would be £1,000 (US$1,246) cheaper to buy in the USA than an equivalently priced EU-built Mercedes.

We’ve already seen a marked increase in shipments to the USA this year – probably to exploit the new US Duty threshold, which increased this year from US$200 to US$800. Perhaps contrary to all expectations, USA-UK trade could enter a new special relationship under Trump post Brexit.

For more information on UK-USA exports, click here.

Bio:

David Jinks is head of consumer research and public relations at the international courier ParcelHero. He is an award-winning journalist and blogger who specializes in logistics and transport. David was formerly publisher at The Chartered Institute of Logistics & Transport, where he ran the institute’s journals, news bulletins and international newsletter. David was previously a newspaper reporter and has edited magazines on classic cars, railways and commercial vehicles.

November 9, 2016

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