UK exports to the USA after Brexit
The result of the UK referendum that took place on the 23 June 2016 generated a turbulent reaction from the British public and global businesses alike.
The ratio of Leave to Remain voters has not only divided the nation, but the political earthquake created by the Brexit result has also had an immediate, negative effect on the UK markets, raising questions and concerns about the future UK exports to the USA post-Brexit.
UK exports will undoubtedly face challenges as a result of new legislation and tariffs, however, the short term impact of Sterling’s weakness may offer a silver lining for UK traders.
As the pound begins to rebound slightly and the post-Brexit markets stabilise, it’s important that UK exporters strike whilst the iron is hot, and particularly, businesses trading in short term contracts should focus on the few advantages that can be taken from the vote.
US-based retail warehousing and logistics specialist Coast to Coast Fulfillment Inc., has already seen an flurry of activity post-Brexit. The company\’s founder Jeffrey Wyant claims that although the Brexit vote was a surprise to many both inside and outside the UK, British businesses such as UK start ups and first time exporters are already making new plans which involve the US.
Despite the pounds’ initial recovery, USA tourists travelling to the UK will still benefit from a better pound to dollar exchange rate, boosting visitor numbers in the short term and helping to steady the UK markets.
The Brexit result was clearly an unexpected one for both the political parties and the British public and it will take some time for new treaties to be drafted and resolved. However, with the ability to export goods from the UK to the USA at a more cost effective rate, UK businesses should definitely be taking advantage of this short time period while it lasts. It’s likely that there will be a ‘honeymoon period’ whilst the UK is still a member of the EU, and as a result, many businesses will be keen to complete their transactions before the necessary trade treaties between the EU and the rest of the world are settled.
Despite previous claims that in the event of a Leave vote, the UK would be banished to the “back of the queue” for trade talks, it seems this isn’t quite the case, as talks in Congress get underway to discuss new trading and export opportunities between the USA and UK. Senior USA economists have argued that the implementation of The United Kingdom Trade Continuity Act and negotiations of a new trade deal with the UK might even be easier without “interference” from other countries.
There are inevitably challenging and uncertain economic times ahead, which will undoubtedly affect the UK exports to the USA. However, all is not lost, and where there are losers, there are always winners. Businesses that are proactive enough to seek out and pursue new opportunities in the wake of the Brexit vote have the potential to make the best of a bad situation.