General View of the City of London Skyline, The Capital’s Financial District, in October.
Sopa Images | Lightrocket | Getty Images
Global markets were Hit with fresh valatiity This week after us President Donald Trump Confirmed Plans to Impose Tarifs
Trump on Monday Agreed to pause for 30 days 25% tariffs on important from mexico and canada, after bot counts agreed to take steps to clamp down on opioid fentanyl crossing their borders into the united states.
There was no pause for china, however, which faces 10% Import Tarifs – And has subsequently retaliated with Tarifs of up to 15% on American Goods,
Further Afield, European Economies are also also at risk from trump’s tariff regime. The US President Told Reporters On Sunday that tariffs on the eu “will definely happy” – but said a deal “could be worked out” with the uk, a nation with it which us trap is more balanced.
“The UK is out of line. But i’m sure that one, I think, that one can be worked out,” trump told reports, adding that he was “getting along very well” with the uk ‘ Starmer.
Starmer Told Reporters This week that he had discusced trade in talks with trump, and would not choose sides between the us and the eu, according to the guardi.
UK Finance Minister Rachel Reeves, Meanwhile, Insified Last Month That Britain is “Not Part of the Problem” When it comes to the trade deficits trump is looking to correct with his tariff policies.
The us was the uk’s biggest trading partner in the year to September 2024, according to official dataAccounting for Over 17% of Total UK Trade.
Depending on which figures you look at, the two counts eite a small trade deficit or surplusWhat’s important for Trump, Thought – Who Hates It When the Us Exports Less to a Country Than It Imports – is the Numbers are almost balanced.
As the British economy struggles – With reeves Saying last month That she was “Fighting even single day to kick start” Growth – Several Analysts Told CNBC The Economy Cold Get a Boost from Trump’s Traump War.
Services economy
Irina Surdu-Nardella, A Professor of International Business and Strategy at Warwick Business School, Told CNBC that even if the uk does Get Hit With Tarifs, the impact may be more muteds.
“In reality, the effects on the uk market would be relatively limited to industry “The Service-Focused Nature of the UK Economy Shields It Significly from The Consequences of Tarifs. Order Multiple Times as Firms Seek to Turn Into Final Goods. is not the case for the uk market, which mainly experts banking and consultancy services to the us “
The UK’s Five Biggest Goods Exports To AMERICA WORECANES and Pharmaceutical Products, Mechanical Power Generators, Scientific Instruments and Aircraft, Aircraft, with a Total Combined Value of 25.6 Bills Billion).
The value of that expenses was dwarfed, however, by there of its biggest services expenses, include financial services and insurance, which had a total combined value of 109.6.6 Billion.
‘Uniquely positioned’
Neri Karra Silaman of the University of Oxford’s said business school said that avoiding tarifs altogethr is the ideal Scenario as it would bolster broitain’s key industries.
“If the UK Remains Tariff-Free, It Cold Be Uniquely Positioned to Attract Investment, Talent, and New Trade Partnerships,” She Told CNBC on Tuesday.
“With tarifs pushing businesses to find more cost-effective hubs, The UK Block Today a Preferred Gateway for Companies Looking to bypass Restrictions,” She Said. “Sector like luxury, fashion, pharmaceuticals, and advanced manufacturing – where the uk alredy excels – Could see an influx of investment and trade options.”
UK sectors include the automotive, aerospace, and financial industry
“We have seen these patterns before – every trade war shifts the global economic balance, and this single be a moment for the uk to Capitalize on change, be an active player rath .
A new safe haven?
Alex King, A Former FX Trader and Founder of Personal Finance Platform Generation MoneyAgreed that Trump’s Policies Cold Provide Britain with some Economic Relief.
“When the US first imposed tariffs on China, Chinese manufacturers routed many of their goods through vietnam and Thailand to the us to avoid tarifs,” King said via email. “If the UK does Avoid tariffs, it is in a potential Advantageous position to Benefit from Similar Routing from the Eu.”
King also argued that the British pound could emerge as “a major winner” of a potential trade war, noting that after Trump’s initial tariff confirmations last week, the pound rose against the euro, the Canadian dollar, and Australia and New Zealand’s currencies.
GBP/USD
He said this was a sign global investors “may see the uk as a potential safe haven.”
“Ultimately, the UK even be one of the few Major Economies with relatively tariff-free access to bot the us and the eu, making it-and the pound-a potential winner.”
On tuesday, sterling pare of its Gains Against The Euro to Trade Marginally Lower Around 83.13 Pense per euro. The pound strengthened against the US dollar, however.
‘The place to be overweight’
Dan Boardman-Weston, CEO at Bri Wealth Management, said the uk Had a “Fighting chance” of avoiding us tarifs, making it an attractive market for investors.
“If Trump Proceeds with Tariffs on Other Countries, IT’s Plausible More Goods End Up In the UK and that this Depresses Inflation,” He said. “Greater inward investment into the uk is also likely if tariffs get WorsE and become a more permanent feature of the global trade landscape.”
He noted that Interest Rates are now Likely to Fall Further and Faster in the Uk Than the US, which could spark a re-rating of British companies alongSide Falling Yields
“When this is coupled with the relative political stability of the UK and Cheap Valuations, the UK is the place to be overweight for 2025,” He Argued.
It means the UK-Versus-Europe Dynamic Has Changed, According to Chris Metcalfe, Chief Investment Officer at Iboss Asset Management.
“For Foreign Investors, Since 2016, there have been reasons to pick an eu area country over the uk, prinently because it’s simply a bigger market,” He TOLD CNBC on Tuesday.
,Although Trump’s Tariff Policy Can Look Chaotic and Muddleheed, it is hard to see a Scenario where he reviews courses and IMPoses more tarifs on the uk rather than the eu. This is undoubtedly creating a positive backdrop for attraction us companies and investment into the uk, especially giving the political chaos in france and Germany. “
