UK Firms Seek Involvement in Trade Talks Amid Tariff Threats

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(Bloomberg) – UK businesses want a bigger role in shaping trade policy, as protectionism promoted by US President-elect Donald Trump throws exporters into uncertainty.

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Business leaders should have a say in trade negotiations early so they can provide special advice to the government, the British Chambers of Commerce said Monday in a report. Currently, firms usually only contact each other when an agreement has been reached between the negotiating partners.

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The announcement comes as Trump’s bid for a second term as president – which he begins next month – has put international trade relations on the line because of his promise to drop tariffs of up to 20% on all US exports, with heavy tariffs. commercial from China. Economists warn that in the short term, that could disrupt UK supply chains and weigh on export-heavy industries in countries outside the Atlantic.

Prime Minister Keir Starmer, who defeated the incumbent Conservatives in July’s general election, has promised to boost Britain’s economic growth during this parliament, a position partly dependent on improving trade and foreign investment. The US is the UK’s biggest single trading partner, meaning the prime minister’s ambitions are threatened by the prospect of a transatlantic trade clash caused by Trump’s promised tariffs.

That raises the prospect that the government may want to renew negotiations on the US trade agreement that was started during Trump’s first term, before being abandoned under President Joe Biden, in order to find a more beneficial position. But any trade talks could be complicated by Starmer’s desire to seek a closer trading relationship with the European Union – whose 27 members account for a bigger share of Britain’s trade than the US.

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“It’s anyone’s guess at this point what trade relations will look like in the new year, but everyone can see that a new tax season is on the way,” said BCC President Martha Lane Fox, who also serves as Business Chair. Council. The BCC represents tens of thousands of firms across the country.

In a show of how the UK is playing in trade talks with the US, half of decision-makers at major organizations in both countries said they were worried that US trade policy changes would cause disruption, according to a survey. procurement software company Ivalua. Just under half see rising supply chain costs that will reduce their profits.

The BCC has proposed a number of changes in government policies, including greater involvement of businesses in trade negotiations, setting aside more money to support exporters, and publishing data on the rates at which businesses use current free trade agreements.

“The UK is no longer part of a major trading bloc, which gives us more flexibility in how we respond,” Lane Fox said. “However, we also have to make sure we are in the best possible position to do that.”

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The BCC also said it saw a “strong case” for pursuing “resetting” free trade talks with Canada and Mexico, as well as for finding opportunities for similar talks with Indonesia and Thailand. Talks with Canada were stopped in early 2024 under the previous Conservative government, while those with Mexico were suspended last year.

The BCC also made a number of recommendations on improving investment in the UK, including working with key trade partners to drive “policy coordination”, and providing more guidance to lenders so they can improve their infrastructure provision and trade finance products.

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