What Would Trump Presidency Mean for UK Manufacturing and Logistics?

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On November 8th 2016, the face of the US, and indeed world politics changed forever. There has been plenty of talk about the ramifications of a Trump presidency on future economy, international relations and trade. Trump talked a lot about promoting manufacturing and industry at home, but what does that mean for abroad? Let’s now take a look at the effect Trump will have on UK manufacturing and logistics, whether for better or for worse.

Export

The US is currently the biggest export destination for British goods. The total value of exports from the UK to the US up till November 2016 came to £29.2 billion pounds. Exporting to the US is therefore an integral part of UK manufacturing and logistics businesses. Unfortunately however, this could all be set to change.

Looking to the future of UK-US exporting, the situation seems altogether more complex and challenging. Trump campaign had a clear bias towards promoting US manufacturing, stifling globalisation and promoting isolationism. Trump spoke out against free trade. This may mean a dramatic increase in import duties for certain industries such as steel.  All this may result in a closed off market for British manufacturing and logistic businesses to export their goods. This could leave the business with two options. One, reduce US exports to the US and look for other, cheaper alternatives. Two, set up US subsidiaries to bypass any trade barriers.

Trade Deals with Trump and the US

The severity of the impact of a Trump presidency on manufacturing and logistics however will depend upon whether the UK government can secure a trade deal with the US. The Trump camp has previously been optimistic about a UK-US trade deal. Trump himself has Scottish roots, whilst his trade adviser claimed they ‘absolutely’ wanted to do a deal with the UK if possible. The current UK government weren’t particularly enthusiastic to the idea of a Trump presidency during his campaign, but since his victory have responded with optimism to talk of securing trade deals. Any mutually beneficial trade deal could easily negate increased US import duties.

In reality however, the future does not look as promising for a trade deal to be set up. Despite the positive words from the Trump camp, their actions haven’t spoken quite as loud. Trump’s main trade and international relation agenda focused on China and Russia. This is quite clear on Trump’s website, which has a lot of paragraphs devoted to international relations with these countries. However there is no mention at all of the UK, in the website’s section for trade or otherwise.

Uncertainty

The truth is, predicting the effect a Trump presidency will have on UK manufacturing and logistics is a difficult one. The whole situation has promoted plenty of uncertainty. Trump said a lot during his campaign trail, encapsulating a large variety of issues. It’s uncertain however how much of his campaign policies will actually translate into policy. Trump clearly represented an anti-establishment agenda. This could lead to significant changes in government policies, international relationships, and subsequently where the UK’s manufactured products will be exported to.

Combining this with the uncertainty of summer Brexit vote means it’s anyone guess what the future of UK manufacturing will look like. The best case scenario is a free trade agreement with the US, which is an even bigger importer than the whole of the European Union, which could lead to a bright future for UK manufacturing and logistics. Until the future becomes clear, the sector must remain positive, keep business running as usual, and hope the political and economic forces of the future will align in their favour.

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