Why US and UK Trade Might Not Happen This Year
By Space Coast Daily // February 19, 2021
When he took over as PM, Boris Johnson promised to deliver Brexit and boost the economy with a series of exciting new trade deals. While he’s succeeded on the first, the latter is still in some doubt.
The US was one of the main targets, with Donald Trump declaring an interest in doing a trade deal with Britain. There were always question marks about the price and whether the NHS would be affected. But the appetite for an agreement was clear.
However, now that Joe Biden has moved into the Whitehouse, other priorities have come to the fore. Interest in a deal with the UK appears to have waned, leaving the UK out in the cold. Does this mean that a US trade deal is dead in the water – or can it be revived this year?
New Focus for the US
To forecast the likelihood of a deal being done, it’s essential to understand Joe Biden’s priorities. A very different type of leader to Donald Trump, Joe Biden views the US as fitting into a broader global economy rather than standing alone.
The fact that Biden’s policies will extend beyond the US has huge relevance all over the world. For example, changes in leadership and agendas are precisely what strongly influences currency and stock markets across the globe; and should be especially beneficial when speculating on Forex, where movements can be volatile.
Biden has already rejoined the Paris Agreement, reinstated US membership of the World Health Organization and lifted the ban on visitors from Muslim countries.
The new President has made it clear that his goal is to reunite a fractured country, and that includes concentrating on US infrastructure. Tackling the spread and impact of COVID-19 is one of his most urgent priorities, with plans to have vaccinated 100 million Americans by the end of April 2021.
The President is a lifelong champion of environmental issues and in stark contrast to Donald Trump, who frequently denied the effects of climate change. Biden will be keen to try and rebuild the American economy, but not at the expense of the environment.
This means that the UK trade deal will have to wait because it’s not as crucial to the US as it is to Britain.
Joe Biden has already set out his agenda for his first 100 days in office, a critical time for any new president. Trade talks with the UK don’t get a mention, but this isn’t a surprise for political commentators.
Donald Trump regularly talked about the benefits of doing a deal with the UK, but during his campaign, Biden was silent on the subject. It, therefore, comes as little surprise that he’s showing no interest now.
The UK’s problem is that if a deal isn’t done quickly, it could be held up by Congress. At the moment, there is temporary legislation in place that allows a trade deal to be done without lawmakers being able to argue or change individual elements.
If there isn’t an agreement for a deal with the UK before the April deadline, this won’t be the case. Any arrangement can be scrutinized, and each separate part disputed, potentially dragging out the process until 2022 or beyond.
Joe Biden has never hidden his disapproval of Brexit, nor his allegiance to the EU. With so many barriers in place, a speedy US-UK trade deal is increasingly being viewed as a political unicorn.