The UK’s biggest export partner could be put in jeopardy if Donald Trump were elected President of the United States.
The controversial Republican candidate has suggested putting an eye-wateringly high tariff of 35 per cent (or more!) on imported goods in the US, in a bid to boost home-grown US industry.
His comments seem predominantly aimed at the Chinese market, but if a tariff were wielded on all exports to the US, this could have a marked effect on the UK economy.
The UK exported around £37.4bn-worth of goods to the US in 2014, equating to 12.7 per cent of the UK’s goods exports, according to data from economic think tank Capital Economics. When combining goods and services, the US made up 16.4 per cent of our export market that year – a hefty chunk not to be sniffed at.
Economists have widely condemned Trump’s protectionist policies, arguing that the cost of tariffs would be passed on to US consumers in the form of higher prices. But of course, they could have some of their desired effect and prompt US businesses to choose domestic goods where they have the option.
The UK export market has enough to worry about at the moment, with a potential Brexit and all the uncertainty around EU trade levies that would bring. Getting Trump-ed (geddit?) for crucial exports in the US could have a devastating effect.
Furthermore, by pushing US consumer prices up and squeezing the labour force (by removing illegal immigrant workers and discriminating against legal ones), some think that Trump’s policies could cause a major downturn in the US economy. As the old adage says, when the Dow Jones sneezes, the rest of the world catches a cold…
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