Brexit is one event that we’ve not been able to shut our ears to, and as talks about our exit from the European Union continue, there is another change that threatens to destabilise our already fragile global economy.
Once considered by many as a laughable concept and something that could never happen, America and the rest of the world recently woke up to the news that it will be business tycoon and TV personality Donald Trump taking the helm when President Obama steps down in January. Needless to say this news has shaken things up around the globe affecting not just the United States but Mexico, China, the rest of Asia and Europe, but where does this leave the UK business world? Businesses that we provide our own flexible and efficient accounting services to…
Brexit may in fact help relations with Trump
A great admirer of our exit from the EU, President-elect Trump has always supported the Brexit move and whilst Obama famously stated that we would be at the back of queue in regards to trading with the US, despite our strong relationship with the nation, Trump has taken a different approach. Winning the support of Brexit backer Nigel Farage, who even spoke at one of Trump’s rallies during his campaign, Trump has said that Britain will be at the front of the queue for new trade deals, a statement that is helpful not just to Theresa May’s bargaining position but to the businesses throughout the UK looking to trade internationally too.
If Theresa May can show that the US will be a great trading ally, it strengthens the UK’s case for negotiating and securing its own trade deals outside of the European Union, which means talks with EU member countries are likely to go much more smoothly.
Victory means less pressure on the pound
The value of the pound has fluctuated since the referendum result, however Trump’s unexpected victory means that the dollar is also under scrutiny. A short term effect of the election result is that the risk and uncertainty regarding the US economy is heightened taking pressure off Sterling, which has been sold heavily against the US dollar since it was revealed that the UK voted to leave the EU.
What about Trump’s protectionist measures?
One of President-elect Trump’s economic policies outlined in his campaign was the protectionist measures, free-trade measures that he remarked were the cause of the collapse of the US manufacturing sector. As part of his argument for protectionism, Trump stated that he would renegotiate or even eliminate the North American Free Trade Agreement, a move that would have a negative effect on the world economy. The measures however affect only cheap manufactured goods, leaving many countries in Asia weathering the blow, not the high end service providers that the UK is known for.