INTERNATIONAL BUSINESS: The United Kingdom and United States Trading and Investment Relationship

By  //  August 24, 2018

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The U.K. and the U.S. have long had a unique dynamic. Winston Churchill himself referred to the two countries as having a ‘special relationship,’ a term coined by the British Prime Minister in 1946 that is still used today by his latest successor Theresa May, as well as by current U.S. President Donald Trump.

The U.K. and the U.S. have long had a unique dynamic. Winston Churchill himself referred to the two countries as having a ‘special relationship,’ a term coined by the British Prime Minister in 1946 that is still used today by his latest successor Theresa May, as well as by current U.S. President Donald Trump.

While it is said to draw attention to similarities in things like values and culture, it also refers to trade and investment relations too.

Consequently, here’s the current state of things regarding the U.K. and U.S. trading and investment relationship.

Valued Trade

Obviously, different countries have different goods and services. No one country has everything of everything, and there are certain materials, resources, foods, and products that are only available in certain parts of the world. The U.K. and U.S. are no exception to this rule and target their trade to maximize the benefits to both parties; such as by exporting and importing certain automobiles and aircraft.

Not only this but due to the U.S. being the proud owner of the first or second largest economy in the world (dependent upon how you measure it), the UK makes no secret that it considers America it’s most important ally in the grand scheme of things. The sentiment seems to be at least partially mutual, as the US is recorded as having shipped $55.28 billion in goods to the U.K. in 2016. At the very least, both countries clearly conduct serious business with one another for the moment.

One Sided?

Many analysts think that the U.K. and U.S. trading and investment relationship is heavily one-sided, even after a good dose of quality research from both respective countries. This criticism particularly comes to light when considering their trade surplus charges, as both countries have recorded different findings.

In 2017, The Financial Times reported that 2016 saw the U.K. claim a £10 billion trade surplus with the U.S., who claimed a far different number of $1 billion, which yields a stark difference. Both countries ran the numbers and published them as official statistics, and yet the only thing that is completely clear is that neither party in the ‘special relationship’ is quite on the same page.

While the broad strokes in ideals and goals might be similar between the U.K. and the U.S., things start to diverge on a technical, detailed level. Of course, this kind of inconsistency will likely affect future negotiations between the two, as this misunderstanding is far from a minor error.

Flexible Trading?

Laws are toughening up for the U.K. given their circumstances with Brexit, and they’re facing a choice between deeper trading with the U.S. or the EU. They can’t have it both ways, and soon enough barriers will start erecting themselves on either side that starts to bottleneck the U.K.’s options. After all, it’s started to happen already with the ‘unjustified tariffs’ that the U.S. has placed on steel and aluminum.

However, businesses themselves will be doing all they can to stoke the fires of good trade. They’ll likely look to strengthen their ties across the pond independently and do everything they can to keep things running smoothly within the confines of the law.

For example, CFD Trading will lighten the load somewhat and diversify their investment portfolios. All in all, the agenda of politicians can often be very different from the business peoples, and this will likely be exemplified through corporate practice.

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