The trade deficit in the US has the potential to completely change the face of imports and exports in the UK over the coming year. With the Trump administration promising to reduce automotive imports by up to 50%, and continued uncertainty about what could become of our trade relationship with the US post-Brexit, we’ve had a deeper look into the trade deficit in the US, and how it could affect freight and logistics. Here’s a short extract from our whitepaper:
“The United States has for decades now been running a trade deficit, with the value of imports exceeding the value of exports by over $700 billion in each of the past four years. While many economists argue that a trade deficit alone is not a sign of a weak economy or of a country doing badly, US President Donald Trump has, as a core element of his policies, pledged to get “better deals” for the United States and reduce the trade deficit.
“Proposals to achieve this have included the introduction of protectionist policies to curb imports – such as duties or tariffs on foreign goods – and negotiating trade deals that will allow US exporters more opportunities to access foreign markets. UK and US trade relations, in particular, will inevitably shift over the coming years as Britain exits the European Union and has to renegotiate its trade deals both with the remaining 27 countries of the EU, and with other nations.
“This presents potential difficulties as foreign trading partners may place incompatible conditions on future trade deals; for example, a UK deal with the EU might be dependent on continuing alignment with EU regulations, while a trade deal with the US may be contingent upon Britain moving away from EU regulations and aligning more closely with the US on matters such as health and safety or manufacturing standards.”
The following document outlines what the trade deficit is, how it might affect the UK and the US, and what we’re expecting to see in 2018/2019.