After the June 2016 referendum, which saw Britain vote to leave the EU, the UK economy has been in uncertain territory, with no one knowing what the future may hold. As such, there has been much talk of future trade deals which may arise, one of which being between the UK and US. Here are some ways this could affect UK business.
There is no doubt that prices for business undertakings could well be affected by a trade deal between the UK and US. It is worth noting that the EU, which the UK is currently a member of, and the US, have been trying to negotiate a deal since 2011. Any agreement would most likely see tariffs reduced from the current average of 3% between the EU and US to 0%.
Whether the UK would be granted the same tariff reductions in a post-Brexit deal is certainly a point for discussion, but it is likely that any reduction would aid UK business through making the cost of importing/exporting cheaper.
Therefore, negotiations will be of paramount importance if both countries are to reach a mutually beneficial deal. The regulations which govern both countries, such as those applied to banks and food standards, are vastly different. This means each country may have to accept the other’s regulations.
Therefore, all manner of businesses who operate between the two countries may be affected, such as international courier services. Regulations which were once taken for granted could be lost if a potential deal shakes up normal business proceedings. This could well result in a lower standard of goods for both businesses and consumers in the UK.
Ultimately, the prospect of a new trade deal with such a volatile president as Trump is likely to add more uncertainty to a country already unsure as to the effects Brexit may have on the economy. Since negotiations cannot begin until 2019, and would probably not conclude for some years, it is likely that much will change between now and the conclusion of a deal.
Therefore, it will be hard for UK businesses to know exactly which direction to take if they do not know how the economy will behave, or how their daily operations may be affected.
It is hard to say quite how extensive and powerful the effects of a UK-US trade deal would be on UK business. It would depend entirely on what kind of a deal is reached, so business owners may well have a nervous wait ahead of them in the coming years.