The sudden advent of the COVID-19 pandemic has meant that trade talks have been put on the back burner. Governments around the world are focusing their efforts towards relief and containment measures as they aim to minimise the impact of the coronavirus. However, this does not mean that trade talks between countries have ended. In May 2020, the UK and the US announced that they are commencing high-level talks related to a potential trade deal. This blog focuses on the new UK-US trade talks and discusses what these talks could mean for Great Britain.
After a long delay, Britain finally left the European Union (EU) in January 2020. This meant that the country has to now renegotiate trade deals with countries around the world. The US is among the most important trading partners of the UK. According to estimates, trade between the two nations has already reached £220bn. Therefore, it is critical for both parties to sign a new trade deal that considers the interests of each of them. The UK is hoping to sign a free trade deal with the US that could allow its companies to export freely. However, the US is also likely to demand access to the British markets.
One of the main areas of contention is likely to be the tariffs that are levied by each country. The UK wants assurances over minimal tariffs on products such as automobiles and food, while the US will continue to push for other concessions. Although both parties understand the fact that they are politically and economically close to each other, this does not guarantee that a UK-US trade deal will be struck. There is another issue in the form of EU regulations potentially clashing with US laws. This could result in further complications in the deal.
Nevertheless, despite all complications, it is more than likely that the deal will go through. The two countries would want to iron out their differences and sign the deal as soon as possible. But what would be the implications of such a deal for Great Britain? Firstly, the new deal could help importers and exporters based in the UK. This is because they will be able to attain better access to the US market. Secondly, the deal is also likely to result in lower tariffs for UK exporters. This would help the trade industry that is already reeling due to the COVID-19 crisis.
Thirdly, companies in Great Britain could also face some new challenges in the form of more competition from US firms. UK-based firms that are focused on the domestic market would need to devise newer strategies in order to deal with the new competition. This may also result in a price war. Such a price war could prove to be beneficial for the customers but may eat into the profits of the corporations. Therefore, businesses based in Britain must be prepared for the times ahead.
Importers and exporters based in the UK could seek the help of industry experts in order to prepare themselves for the near future. Companies such as OCR Trade Management provide a range of specialised solutions that help traders in dealing with regulatory uncertainties. OCR offers a global trade management system that can be used by traders who are looking to access all information in a single dashboard. This software ensures that you remain updated about the latest compliance requirements and are well-prepared to deal with disruptions. For more information about the company and the key offerings, please contact us.