EU-US Trade Deal Not As Expected! Is the U.K. Quietly Profiting?

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As world leaders and European economists digest the news of the trade deal between the European Union (EU) and the United States, some experts are speculating that the deal, while less favorable to the EU, could provide a surprise boost to the United Kingdom.


The EU currently faces a 15% tariff on its exports to the U.S., compared to just 10% on goods from the U.K. According to Philip Shaw, Chief Economist at Investec, this theoretically gives the U.K. an advantage. “U.K. exports to the U.S. are now relatively cheaper, and this could increase British trade with America as U.S. firms are more likely to buy goods from the U.K. than from the EU,” he explained.


Alex Altmann of Lubbock Fine LLP added that the tariff differential would not only make British goods cheaper for American consumers, but also provide a major incentive for EU companies to move their manufacturing operations to the U.K. He stressed that the remaining production capacity in the U.K. post-Brexit, making it a strategic location for new investment. “The U.K. could be the biggest indirect winner of this deal,” he said.


However, not all of the benefits stem from lower tariffs. Shaw noted that the EU’s avoidance of the 30% tariffs that U.S. President Donald Trump had threatened also had a positive impact on the U.K. because its major trading partner was spared a potential recession that could have hurt U.K. exports to the EU. However, Beth McCall of law firm Dentons warned that the impact of the 5% advantage could take time to be fully felt, as existing contracts would have to expire before U.S. importers would switch to the U.K.

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