Trump commerce warfare: How UK figures present his tariff argument would not add up

As Chancellor Rachel Reeves meets her counterpart, US Treasury secretary Scott Bessent to debate an “financial settlement” between the 2 international locations, the most recent commerce figures affirm three realities that should form negotiations.

The primary is that the US stays an important buyer for UK companies, the biggest single-nation export marketplace for British items and the third-largest import companion, crucial to the UK automotive trade, already landed with a 25% tariff, and prescribed drugs, which could but be.

In 2024 the US was the UK’s largest export marketplace for automobiles, price £9bn to firms together with Jaguar Land Rover, Bentley and Aston Martin, and accounting for greater than 27% of UK automotive exports.

Little surprise the home trade fears a heavy and quick affect on gross sales and jobs ought to tariffs stay.

American automotive exports to the UK in contrast are price simply £1bn, which can clarify why the chancellor could also be keen to decrease the present tariff of 10% to 2.5%.

For UK medicines and pharmaceutical producers in the meantime, the US was a greater than £6bn market in 2024. Presently exempt from tariffs, whereas Mr Trump and his advisors take into consideration tips on how to deal with an trade he has long-criticised for prime costs, it stays weak.

The second level is that the US is much more vital for the providers trade. British exports of consultancy, PR, monetary and different skilled providers to America have been price £131bn final 12 months.

That is greater than double the full worth of the products traded in the identical path, however mercifully providers are a lot tougher to hammer with the blunt instrument of tariffs, although not immune from regulation and different “non-tariff limitations”.

The third level is that, had Donald Trump caught to his preliminary rationale for tariffs, UK exporters shouldn’t be going through a penny of additional value for doing enterprise with the US.

The president says he slapped blanket tariffs on each nation bar Russia to “rebalance” the US financial system and reverse items commerce ‘deficits’ – through which the US imports greater than it exports to a given nation.

Learn extra: Might Trump tariffs tip the world into recession?

That closely contested argument may apply to Mexico, Canada, China and lots of different manufacturing nations, however it doesn’t meaningfully apply to Britain.

Figures from the Workplace for Nationwide Statistics present the US ran a small items commerce deficit with the UK in 2024 of £2.2bn, importing £59.3bn of products in opposition to exports of £57.1bn.

Add in providers commerce, through which the UK exports greater than double what it imports from the US, and the UK’s surplus – and thus the US ‘deficit’ – swells to almost £78bn.

That is likely to be an issue have been it not for the US’ personal accounts of the products and providers commerce with Britain, which it says really present a $15bn (£11.8bn) surplus with the UK.

You may suppose that they can’t each be proper, however the ONS disagrees. The disparity is brought on by the way in which the US Bureau of Financial Evaluation accounts for providers, in addition to a spread of statistical assumptions.

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“The presence of commerce asymmetries doesn’t point out that both nation is inaccurate of their estimation,” the ONS stated.

That is likely to be encouraging had Mr Trump not ignored his personal arguments and landed the UK, like everybody else on the earth, with a blanket 10% tariff on all items.

Commerce agreements are notoriously advanced, protracted affairs, which helps clarify why after 9 years of attempting the UK nonetheless has not received one with the US, and the Brexit deal it did with the EU in opposition to a self-imposed deadline has been proved extremely disadvantageous.