The US is the largest and most competitive economy in the world. With more than 360 million English-speaking consumers spending in an open economy, it’s an obvious choice for UK businesses trading overseas.
But while the potential is undeniable, local business regulations – coupled with ongoing political uncertainty and shifting trade relations – mean there are some important considerations to bear in mind when trading with the United States.
The US is one of the UK’s longest-standing and most important trade partners, but since the EU referendum and President Trump’s election, the future of this special relationship has become less certain.
Although President Trump has promised to negotiate a “large scale trade deal” with the United Kingdom following Brexit, this promise was recently undermined by House Speaker Nancy Pelosi.
“Let me be clear,” she said in Ireland in April. “If the Brexit deal undermines the Good Friday accords, there will be no chance of a US-UK trade agreement”.
Trouble could well be afoot, as negotiations around the Irish backstop are far from over. And as we’ve seen from the ongoing trade war between China and the US, Trump himself can be something of a wildcard too – he could easily go back on his promise if it no longer favours the US, his greatest priority.
Who can I speak to?
Though the climate is changing, and the future of UK-US trade is less than clear, strong industry contacts and trusted partners in the US market can help any business navigating its way through the current uncertainty.
The Department for International Trade (DIT) is a good place to start, and offers detailed advice for UK companies doing business with the US. It is also extremely well networked, enabling valuable local introductions for British companies.
What else should I look out for?
The ongoing trade battle between the US and China is also something to keep an eye on. Since last year, both sides have slapped large import tariffs on goods like steel and coal, creating challenges for businesses in both economies.
And it’s not just China that the US has imposed tariffs on. Last year, Donald Trump announced worldwide plans for tariffs, rattling global markets and sparking retaliation from European, Canadian and Mexican leaders.
For anyone exporting from the UK to the US, this is an important consideration. A sudden hike in tariffs would make British imports unattractive for American buyers incentivised to turn to local suppliers.
And big picture, it has been estimated that the trade war could slow worldwide GDP growth by around 2.5 percent over three years, which could spell bad news for international trade between all developed economies, not just the UK and US.
How do I protect my business?
Risk management is important for any business trading overseas, and especially so in times of uncertainty.
If you’re concerned about volatility in the pound and dollar you can reach a currency expert at OFX 24/7. We’re ready to discuss your businesses specific needs and develop a risk management strategy to help meet your goals. Get in touch at email@example.com or call us on +44 207 614 4195.
How to contact OFX
1300 300 524
IMPORTANT: The contents of this blog do not constitute financial advice and are provided for general information purposes only without taking into account the investment objectives, financial situation and particular needs of any particular person. UKForex Limited (trading as “OFX”) and its affiliates make no recommendation as to the merits of any financial strategy or product referred to in the blog. OFX makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this blog.