As Chancellor Rachel Reeves meets her counterpart, US treasury secretary Scott Bessent to debate an “financial settlement” between the 2 international locations, the newest commerce figures affirm three realities that should form negotiations.
The primary is that the US stays a significant buyer for UK companies, the most important single-nation export marketplace for British items and the third-largest import associate, vital to the UK automotive business, already landed with a 25% tariff, and prescription drugs, which could but be.
In 2024, the US was the UK’s largest export marketplace for automobiles, price £9bn to corporations together with Jaguar Land Rover, Bentley and Aston Martin, and accounting for greater than 27% of UK automotive exports.
Little surprise the home business fears a heavy and quick impression on gross sales and jobs ought to tariffs stay.
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American automotive exports to the UK against this are price simply £1bn, which can clarify why the chancellor could also be prepared to decrease the present tariff of 10% to 2.5%.
For UK medicines and pharmaceutical producers in the meantime, the US was a greater than £6bn market in 2024. At present exempt from tariffs, whereas Mr Trump and his advisers take into consideration deal with an business he has long-criticised for top costs, it stays weak.
The second level is that the US is much more vital for the providers business. British exports of consultancy, PR, monetary and different skilled providers to America have been price £131bn final yr.
That’s greater than double the whole worth of the products traded in the identical route, however mercifully providers are a lot more durable to hammer with the blunt software of tariffs, although not immune from regulation and different “non-tariff limitations”.
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The third level is that, had Donald Trump caught to his preliminary rationale for tariffs, UK exporters shouldn’t be going through a penny of additional value for doing enterprise with the US.
The president says he slapped blanket tariffs on each nation bar Russia to “rebalance” the US economic system and reverse items commerce ‘deficits’ – during which the US imports greater than it exports to a given nation.
That closely contested argument may apply to Mexico, Canada, China and lots of different manufacturing nations, but it surely doesn’t meaningfully apply to Britain.
Learn extra: May Trump tariffs tip the world into recession?
Figures from the Workplace for Nationwide Statistics present the US ran a small items commerce deficit with the UK in 2024 of £2.2bn, importing £59.3bn of products towards exports of £57.1bn.
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Add in providers commerce, during which the UK exports greater than double what it imports from the US, and the UK’s surplus – and thus the US ‘deficit’ – swells to just about £78bn.
That could be an issue have been it not for the US’ personal accounts of the products and providers commerce with Britain, which it says really present a $15bn (£11.8bn) surplus with the UK.
You may suppose that they can not each be proper, however the ONS disagrees. The disparity is brought on by the way in which the US Bureau of Financial Evaluation accounts for providers, in addition to a variety of statistical assumptions.
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“The presence of commerce asymmetries doesn’t point out that both nation is inaccurate of their estimation,” the ONS mentioned.
That could be encouraging had Mr Trump not ignored his personal arguments and landed the UK, like everybody else on this planet, with a blanket 10% tariff on all items.
Commerce agreements are notoriously advanced, protracted affairs, which helps clarify why after 9 years of making an attempt, the UK nonetheless has not received one with the US, and the Brexit deal it did with the EU towards a self-imposed deadline has been proved extremely disadvantageous.
