UK could negotiate exemption from Trump tariffs, former Senator says
A former Republican Senator told City PM that there was a “reasonable expectation” that the UK would be able to negotiate an exemption from Donald Trump’s tariffs.
Trump has pledged to put at least a 10 per cent tariff on all foreign imports, rising to 60 per cent for Chinese goods. The President-elect has even claimed that tariff was “the most beautiful word in the dictionary”.
However, many analysts have suggested that the threat of tariffs might be used as a negotiating technique.
Roy Blunt, Senator for Missouri from 2011 to 2023, suggested that the UK was in the “best place” to dodge the tariffs because it is “a unitary actor” when it comes to trade policy.
“Trump sees foreign policy and trade policy as an ongoing negotiation,” he said at the UBS European Conference.
“I’d expect Trump to say ‘here’s what I’d be willing to do (impose tariffs) if you’re not willing to work with this on these issues’,” he added.
Blunt said it was a “reasonable expectation” that the UK might be able to negotiate exemptions from the tariffs, although he suggested it “wasn’t bad politics (for Trump) to be pro-tariff”.
Jonathan Pingle, chief US economist at UBS Investment Bank, agreed that the UK would probably not be a major target for Trump’s controversial trade policies.
”The UK is not in the trade war cross hairs,” he told City PM. “It is not getting lumped in with the EU and the large trade deficits that many in the Trump trade policy arena would like to address.”
Advisers close to the Trump administration have been very concerned by the US’s persistent trade imbalances with trading partners like the EU and China. In 2018 Trump imposed a 25 per cent tariff on steel and a 10 per cent tariff on aluminium due to national security concerns.
Speaking over the weekend, Darren Jones, chief secretary to the Treasury, said officials in the UK would be considering “lots of different scenarios” after Trump’s re-election.
“The position of the government is that we support free trade and we support the trading relationship between the United States and the United Kingdom,” he said.
Analysts at Pantheon Macroeconomics suggested that if Trump did impose a 10 per cent tariff on the UK, it would have a “trivial direct impact on GDP”.