US-UK Trade Deal Hinges on Election Result
Trade between the US and UK has been strong for many decades. The US is the biggest importer of British goods and, despite all the goings on in the White House, relations between the two Western superpowers remain cordial. The outcome of next month’s snap General Election could change that.
Earlier this year, whilst President Donald Trump had just got his feet under the Oval Office desk, there was talk of a new trade deal between the two countries. However, the hope that a deal can be done has subsided, with the White House signalling that a similar deal with the EU would take priority.
The outcome of Brexit, which is adding to the high level of uncertainty, depends on who wins the election and by how much. If, as expected, the Conservatives win with an increased majority, a hard Brexit is likely. The outcome of a Labour victory may result in better terms, but a lot depends on how the EU are going to enter negotiations.
Recently, the FTSE 100 reached the 7,500 mark for the first time, while the Pound rose to $1.30 against the Dollar. On the surface, this is good news for many businesses, but anxiety may be just around the corner, not least with the trade deal hinging on more than just the election on these shores.
President Trump is facing a huge amount of questions over his rumoured involvement with Russia. The dismissal of FBI chief James Comey and a new, $110bn arms trade deal with Saudi Arabia may see his focus turn away from Europe altogether.
A lot of macroeconomic indicators suggest that traders using platforms from Hantec Markets have a lot to look out for. After the election takes place, whoever is in government will have plenty on their plate in relation to salvaging the US-UK trade deal.
Strong and Stable?
Victory for the Conservatives will likely see two outcomes – a strengthening in relationships between Theresa May and Donald Trump and a hard Brexit. The incumbent Prime Minister is one of a handful of world leaders to have visited the White House since his inauguration and, from a fiscal standpoint, shares a lot of common ground.
The fallout from any Brexit deal will have a profound impact on who, if anyone, the Trump administration will do a deal with. Should the UK come out of any negotiations with the EU favourably, this may make the country far more attractive for the US to strike a trade deal with. Anything else will put the EU at the front of the queue.
Since the turn of the year, many proposed trade deals involving the US have either been delayed or fallen completely by the wayside. Others, such as that with Saudi Arabia and the newly-resuscitated Trans-Pacific Partnership (TPP), have gone through regardless of goings on with Mr Trump.
No figures have been quoted for any Transatlantic deal, but should it take place, it would have to be after the UK leaves the EU. Firms in the banking and technology sectors will surely be keeping a firm eye on future developments.