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There was a time when Britain sat at the centre of two of the world’s biggest markets.
To the west, there was America, with a population of more than 300 million people and a market size measured in tens of trillions of dollars. While to the east, a market of 450 million people with a nominal GDP of $19.4 trillion and no barriers to entry.
It made the United Kingdom an ideal trading post for some of the world’s biggest businesses. Canary Wharf was transformed from old shipping docks to a global trade centre overnight because of it as transatlantic brands fell over themselves to get an English-language-speaking foothold in the EU.
But in the wake of Brexit and with no subsequent trade deal with the US, the UK is staring at the very real prospect of being stuck between a rock and a hard place just years after enjoying one of the most economically privileged positions on the planet.
President-elect Donald Trump has pledged to impose a 10 per cent or 20 per cent tariff on all imports across the board in order to cut the amount of income tax Americans pay or do away with it altogether.
That is likely to have a devastating effect on the UK economy.
According to an analysis by The National Institute of Economic and Social Research (NIESR), if the plans are implemented UK growth could be halved while prices on consumer goods are likely to rise significantly.
“The UK is a small, open economy and would be one of the countries most affected,” NIESR economist Ahmet Kaya said, and it’s not like we have any friendly relations with the new president to fall back on.
We could, of course, look to our oldest and biggest trading partner to the east, but due to the trading restrictions we have imposed upon ourselves, we won’t find any answers there.
So that just leaves the wonderful trade deals with Australia, New Zealand and all those faraway nations signed up to the CPTPP to rescue our economy.
Which is a bit of a concerning thought, don’t you think?
