Will 'Britophile' Trump sign a trade deal with the UK?

Though few voice it so crudely, one of the great worries on the minds of British policymakers is whether the soon-to-bereincarnated President Trump will slap tariffs on UK exports to the United States.

- SEAN O'GRADY

The more romantically inclined, preferring to ignore Donald Trump’s record and harsh anti-trade rhetoric, might still wonder if that ever-so-elusive UK-US free trade agreement (FTA) might even, maybe, somehow, be in the offing in the coming years, provided Keir Starmer lays the flattery on with a trowel.

For those companies who provide Range Rovers, Scotch, and financial services to the US, the issue is obviously vital; but given that America is Britain’s largest trade partner after the European Union, transatlantic trade will affect the whole economy. Key fact: exports to the US account for about 6 per cent of UK GDP. Is a “special relationship” in trade a good idea, or even possible?

Is trade a good thing?

On the whole, yes, and that is well underpinned by economic theory along with experience during the post-Second World War era, when general reductions in tariffs, non-tariff barriers and import quotas have helped to boost global growth, most notably as China rejoined the world economy earlier this century.

Trump, however, doesn’t agree. That’s the fundamental problem. According to Bob Woodward’s excellent book on Trump’s first term, titled Fear, the president was once handed a draft text on his way to a G20 conference, and he scrawled the words “TRADE IS BAD” on it. He says “tariff” is his favourite word, and ideally he’d like to replace income taxes with tariffs (a highly regressive move, but there you go).