At a joint press conference Friday, British Prime Minister Theresa May said she and President Trump discussed “future economic cooperation and trade. … We are discussing how we can establish a trade agreement, take forward immediate high-level talks, lay the groundwork for a U.K.-U.S. trade agreement, and identify the practical steps we can take now.”
When the Trump administration works toward a trade agreement with the U.K. (which it should), it should remember the U.K. needs the U.S. more than the U.S. needs the U.K. The British economy is more dependent on trade with the U.S. than vice versa.
May hinted at this when she said, “The U.S. is the single biggest source of inward investment in the U.K.”
Take a simple look at the trade numbers.
The U.K. exports more goods to the U.S. than to any other individual country, with 14.6 percent of its exports going to the U.S. As for imports, the U.S. is the third-biggest originator — 9.2 percent of U.K. imports come from the U.S.
On the other hand, the U.S. exports more goods to Canada, Mexico, China and Japan before the U.K. Only 3.3 percent of U.S. exports go to the U.K. On imports, the U.S. imports more goods from China, Canada, Mexico, Japan, Germany and South Korea than it does from the U.K. Only 2.3 percent of all U.S. imports come from the U.K.
If the Trump administration is going to use this for leverage in a trade agreement, it should certainly be in the direction of more free trade rather than as leverage to get the U.K. to accept more protectionist measures.
Thankfully, Trump hasn’t signaled that he opposes free trade with the U.K. If he’s seriously worried about the U.S. trade balance, he’s probably not too worried about the U.K., since only a tiny portion of the U.S. worldwide trade balance hinges on the U.K.
Britain is not known for cheap labor, and no one thinks of it as a prime place for outsourcing U.S. jobs. So perhaps Trump doesn’t believe companies are leaving the U.S. for the U.K. and feels no need to build economic walls between the two countries.
Jason Russell is the contributors editor for the Washington Examiner.
