Analysts warn that proposed US tariffs may impact the UK economy significantly.
- A 60% tariff on Chinese goods alongside a 20% on other imports is expected.
- The UK’s GDP could fall by 0.9% equating to a £20 billion loss.
- Free-trade talks are seen as a potential, albeit unlikely, solution.
- Experts suggest boosting green technologies to counteract potential losses.
The potential imposition of steep tariffs by the incoming US administration poses serious challenges for the UK. According to the Centre for Economics and Business Research (CEBR), a 60% tariff on Chinese products and a 20% tariff on all other imports could significantly affect the British economy.
CEBR’s analysis indicates that should these tariffs be enacted without any countermeasures, the UK’s GDP might suffer a reduction of 0.9% by the conclusion of any Trump administration. Based on current data, this diminishment would equate to a loss of £20 billion annually.
The National Institute of Economic and Social Research (NIESR) shares similar concerns. Their forecasts show that even a more modest 10% tariff could shave 0.7 percentage points off the UK’s economic growth.
Securing a free-trade agreement with the United States surfaces as an evident solution to mitigate the impact of these tariffs. However, the question of food standards remains a large hurdle, making such an agreement a challenging endeavor to realize.
CEBR suggests that one viable strategy to counteract the economic fallout involves reinforcing the UK’s strength in the green technology sector. This move would be particularly strategic in light of anticipated policy shifts under Trump, especially with expected changes to the Inflation Reduction Act (IRA). Economist Sara Pineros highlighted the importance of the UK position itself as a competitive investment destination.
Pineros emphasizes that without an assertive strategy to capitalize on emerging opportunities amid these challenges, the UK could face significant disadvantages, experiencing the negative ramifications of heightened protectionism without harnessing any potential benefits.
The UK’s response to the potential impact of Trump’s tariffs could dictate its economic resilience and future growth.
