The UK, unlike the EU, has not been included in the list of countries subject to US tariffs.

The four key issues dominating President Trump’s foreign policy agenda are trade, defence, illegal immigration, and the influx of illegal drugs. Of these, trade and defence are particularly relevant to the UK and Europe. After all, nothing says “special relationship” like a bit of transatlantic finger-pointing, which President Trump has been doing since his first term in office.

Trade in Goods
President Trump has made no secret of his disdain for what he calls the EU’s “unfair” trade practices. The UK, however, has largely sidestepped his ire — perhaps because tea and crumpets don’t quite spark the same level of outrage as, say, German cars. Trump has accused EU member states of subsidizing goods and “dumping” them onto the US market, which sounds less like trade and more like an awkward yard sale.

One of his favourite talking points? The imbalance in tariffs on imported vehicles:

• EU vehicles imported into the US: 2.5% (barely enough to cover a cup of coffee)
• US vehicles imported into the EU: 10% (enough to make a Ford Mustang feel like a Ferrari)

It’s worth noting that when it comes to trade, the EU operates as one big, bureaucratic blob rather than 27 individual countries. The European Commission holds the reins on trade policy, setting tariffs, quotas, and negotiating free trade agreements. So, if Trump wants to talk trade, he’s got to deal with Brussels — not Berlin, Paris, or Rome.

Post-Brexit, the UK gained the freedom to craft its own trade policy. Unfortunately, successive UK governments have treated this newfound independence like a gym membership: they have it, but they’re not really using it. Instead of slashing the tariffs inherited from the EU, they’ve left them largely untouched — a missed opportunity. Still, there’s hope for improvement, unless the current Labour government decides to cosy up to EU policies like an old ex you just can’t quit.

The Trade Balance: US-EU vs. US-UK
When it comes to trade, Trump and his advisors have been laser-focused on the EU, which they see as the big fish in the pond — or maybe the shark, depending on the day. The overall trade imbalance between the US and the EU has been a major sticking point, with Trump treating it like the plot of a bad soap opera: dramatic, never-ending, and full of accusations.

The UK, on the other hand, has largely flown under the radar. It’s not that the US doesn’t care about trade with Britain — it’s just that the dynamics are less contentious. While the EU gets all the drama, the UK is more like the quiet neighbour who occasionally borrows a cup of sugar. For now, Britain remains out of the spotlight, which might just be the smartest trade strategy of all.

Trade tariffs are like bouncers at the club of international trade — they only deal with goods, not services.

When it comes to the USA’s trade deficit with the EU in this VIP section, the numbers are downright jaw-dropping.

Let’s break it down: tariffs are the exclusive domain of goods and are enforced by the importing country, like a strict “no free rides” policy. Now, focusing just on goods (where tariffs do their thing), the EU’s trade surplus is flexing like it’s on a victory lap, while the US’s deficit looks like it just tripped over its own shoelaces.

In 2023, the overall trade deficit for goods and services combined was a hefty $150 billion. But hold onto your calculators — when you isolate goods, that deficit ballooned to a staggering $201.6 billion. It’s like the US handed the EU its wallet and said, “Take what you need… and then some!”

The Goods Trade with Trump’s USA — EU vs. UK
US goods-only trade balance (Oct 2023 — Sept 2024), in billions of USD:

• With the UK: Surplus of $9.7 billion per year (Looks like Uncle Sam’s got some spare change from tea and biscuits!)
• With the EU: Deficit of $201.7 billion per year (Guess the US is really into European shopping sprees — someone hide the credit card!)

Steel and Aluminium — Will This Significantly Impact the UK Economy?

President Trump’s recent decision to slap global tariffs on steel and aluminium imports has caused quite the stir. It’s like he’s decided to play Monopoly but skipped the rules and went straight to “Do Not Pass Go.” While these tariffs aren’t aimed specifically at the UK, they may still cause a few ripples across the pond. So, just how big of a dent could this make?

According to UK Steel, exports of steel and aluminium from the UK to the US are valued at around £364 million (about $473 million). Sounds like a lot, right? Well, not so fast — it’s only 0.7% of the total goods the UK exports to the US. In other words, if the UK economy were a pie, this would be the crumbs you brush off the plate. Considering the UK’s steel industry is a shadow of its former self (cue nostalgic music for the industrial glory days), the overall economic impact of these tariffs might barely register. Sure, some firms and workers might feel the pinch, but the broader economy? It’ll likely just shrug and carry on sipping tea.

Of course, not everyone is so chill. Some left-leaning and EU-affiliated think tanks are waving red flags like they’re auditioning for a disaster movie. They’ve predicted that even without being directly targeted, the UK economy could nosedive, with GDP dropping by 2.5% to 3% over five years. Sky News has eagerly amplified these claims, throwing around numbers like confetti. But let’s be honest — these predictions often come with about as much accuracy as a weather forecast for next year’s summer BBQ. Remember the anti-Brexit GDP doom prediction of a 4% drop over 15 years? Yeah, still waiting on that one. So, take these projections with a grain of salt — or maybe the whole shaker.

Sources: US Bureau of Economic Administration (BEA) | EU Commission