The significance of Britain’s trade with the US cannot be underestimated.
A long sought after free-trade deal is elusive despite the best efforts of former Business Secretary, now Tory leader, Kemi Badenoch.
The debate in Britain foolishly has focused on minor issues such as American chlorinated chicken. This misses the point totally.
The US, it should never be forgotten, is Britain’s biggest single trading partner. Trade with the 27 nations of the EU is larger in volume.
Less recognised is the data from the US Bureau of Economic Analysis which shows that the UK has been and remains the largest trading partner of the US for exports and imports of services. The UK also leads in digital services and those supplied by multi-national enterprises.
Shake-up: Donald Trump has said he wants to impose tariffs of between 10% and 20% on the rest of the world outside China. The president-elect aims for a 60% tariff on China
UK Trade & Investments says that the US is not only Britain’s biggest trading partner but is among the countries of the world with which we have a trade surplus.
It jumped from £35.6billion in 2014 to £41.4billion in 2016, the year of the Brexit referendum, to £71.4billion in 2023.
Washington also curiously claims a surplus explained by measurement, timing and currency differences.
The ‘special relationship’ is often disparaged as a political construct. It is indisputable that when it comes to economic ties, those between the UK and US and the City and Wall Street could not be any closer.
The major US investment banks – Goldman Sachs, JP Morgan and Morgan Stanley – run their European and some global operations from London.
Britain has more to lose or gain should Donald Trump succeed in his effort to impose tariffs of between 10 per cent and 20 per cent on the rest of the world outside China. The president-elect aims for a 60 per cent tariff on China.
Given the importance of the US market to British commerce and vice-versa, it makes little sense for Keir Starmer to throw in his lot with Emmanuel Macron and Brussels in negotiating a tariff deal with Washington.
This is especially true as the fate of most commerce in services, where the UK dominates, falls outside normal trade deals.
The Government, with overt support for Kamala Harris in the US elections and disparagement of Trump, has not helped itself in seeking a derogation from the next White House.
Britain can take comfort from other truths. What is said in a campaign – think Labour’s national insurance tax rise and business friendly agenda – doesn’t necessarily stay intact in government.
Moreover, Congress may be less than enthusiastic about trade barriers, which mean higher consumer prices.
Here is hoping for small mercies.
Trenchant defence
Takeover speculation has done wonders for Burberry’s beaten up shares over the last month. They were up 17 per cent but still down 45 per cent this year.
Would-be buyer Moncler, a distant cousin of luxury behemoth LVMH, dismisses the bid speculation and, given the scale of the share price movement, Burberry would be obliged to tell shareholders if there had been an approach.
Much depends on chief executive Joshua Schulman when he unveils first half results on Thursday. Revenues are projected to have slumped by 20 per cent and losses are estimated at £45million.
Schulman needs to be given time. It is unthinkable that a brand so associated with Britain and its distinctive country life culture should vanish into the hands of an overpriced Italian puffer jacket maker.
As TV fashion guru Patrick Grant notes, Burberry used to make ‘absolutely brilliant coats’ which it developed year after year focusing on waterproofing and design qualities.
Under no circumstances should such a British heritage company – which still manufactures at Keighley in Yorkshire – allow itself to be snaffled by a Continental luxury behemoth which would bury it alive.
Research neglect
Amid all the Labour Government’s misfiring talk about growth, it is doing precious little to back UK science excellence.
Cambridge University, which this year added a couple more Nobel prize laureates, bringing its proud haul up to 125, is launching a £50million drive to recruit the best and brightest PhD students from around the world.
The goal is to raise the cash over ten years. Given the pay-off, in the shape of companies such as Deep Mind, a government sinking billions into the public sector needs to fast track PhD scholars at our great research institutions now.
Delay is R&D suicide.