Trading with the USA after Brexit
The UK’s decision to part ways with the European Union generated a turbulent reaction from the British public and businesses across the world. In a decision that has divided a nation; the immediate aftermath has, as warned, had an instantaneous, negative effect on the UK markets and raises questions and concerns about how it might affect trading with the USA after Brexit.
Despite the many challenges facing UK exporters as a result of potential new legislation and tariffs, there may be a silver lining in the short term impact of Sterling’s weakness.
With the pound initially falling to pre-1985 levels, it’s important for UK exporters planning to continue trading with the USA after Brexit to strike whilst the iron is hot, and focus on the few advantages, particularly those trading in short term contracts.
Any USA tourists travelling to the UK will enjoy a better pound to dollar exchange rate, which should boost visitor numbers and, in the short term, help to steady the UK market.
It’s clear that the world wasn’t quite prepared for a Brexit vote, and as a result, it will take some time for new treaties to be resolved. UK business selling to the USA should to utilise this period and take advantage of potential price benefits to sell their goods at a more cost effective rate. There is likely to be a honeymoon period whilst the UK remains a member of the EU, and many companies will be keen to complete any transactions before the necessary trade treaties between the EU and the rest of the world are settled.
There will likely be new export opportunities for businesses who wish to continue trading with the USA after Brexit. Talks in USA Congress are already underway on the implementation of The United Kingdom Trade Continuity Act, and the possibility of a free trade agreement between the UK and USA, quashing previous claims that the UK would be banished to the “back of the queue” in the event of a Leave vote. Senior USA economists have argued it may even be easier to negotiate a trade deal with the UK without “interference” from other countries.
Though there are inevitably uncertain and challenging times ahead for UK trade as a result of the Brexit vote, all is not yet lost. Where there are losers, there are always winners, and businesses focused enough to seek out and pursue new opportunities have the potential to make the best of a bad situation.