Trade in goods between the US and the º£½ÇÊÓƵ saw a slight decrease in 2024 compared to the previous year, ahead of a potential decline in º£½ÇÊÓƵ exports if ten per cent tariffs are implemented in three months.
President Donald Trump granted all countries, excluding China, Canada, and Mexico, a temporary respite from tariffs following a spike in US treasury yields that increased borrowing costs, as reported by .
However, recent official data indicates that several key º£½ÇÊÓƵ industries could be severely impacted by tariffs if a trade agreement is not reached between the Labour government and the Trump administration.
The Office for National Statistics (ONS) revealed that machinery and transport equipment made up nearly half of all goods exported to the US in 2024, valued at £59.3bn.
This suggests that tariffs could adversely affect manufacturers of turbines and internal combustion engines. Chemicals, including vaccines and other essential medicines, were the second largest commodity exported.
Goods exports to the US experienced a minor drop of 3.7 per cent compared to levels in 2023. The º£½ÇÊÓƵ had a small goods trade surplus with the US, importing products worth £57.1bn.
According to the ONS, there was a surplus of £77.9bn when services are considered, while the US Bureau of Economic Analysis (BEA) reported a º£½ÇÊÓƵ surplus of approximately £12bn.
The statistics body of the º£½ÇÊÓƵ has clarified that discrepancies in trade figures may stem from varying "estimation practices" as capturing trade data is inherently "complex."
Negotiations over trade necessitate 'pragmatism'
President Trump has maintained an additional 25 per cent tariff on imported cars and steel.
For British car manufacturers, the US market is crucial, representing more than a quarter of all car exports.
Over a three-year span, the importance of the US as a trading partner for º£½ÇÊÓƵ businesses has escalated, with the proportion of º£½ÇÊÓƵ goods exported to the US relative to other nations rising from 13.8 per cent to 16.2 per cent.
President Trump's goal remains to curtail US trade deficits with various countries, although the good trade deficit with the º£½ÇÊÓƵ is markedly smaller compared to the total excess of more than £250bn with China.
The sweeping tariffs introduced by the President notably exempt services among several other items.
Chancellor Rachel Reeves is scheduled for discussions with her American counterpart Scott Bessent in Washington DC come Friday, aiming to progress trade deal talks.
In her remarks to the BBC, Reeves expressed eagerness to reduce trade barriers while ensuring elevated standards are upheld.
"The US administration respect and understand that we have high standards to support British farming, and to support British consumers, and we're not going to be relaxing those standards," she elaborated.
Lindsay James, an investment strategist at Quilter, highlighted the importance of these discussions as new data revealed the industries most susceptible to an escalated trade war. "This data serves as a timely reminder of the importance of navigating trade negotiations with precision and pragmatism," James stated.
