Trump trade tariffs: Brexit Britain could fare better than EU

That’s one of many potential scenarios playing out in conversations among international trade experts, including John Alty, senior trade adviser to Pagefield and former trade official to the UK government.

While the world is months out from a Trump 2.0 administration, leaders are assessing which of his campaign policies could come true and who the future leader could appoint to carry them through – such as Robert Lighthizer. The incoming president’s former trade chief is favourite to become trade czar or treasury secretary under Trump.

Read more: Is Trump stoking an EU/US trade war?​

Read more: Trump’s trade tariffs could drive EU businesses to set up US sites​

“We’ve all heard what the about-to-be president has said about tariffs and we know about his outlook on trade, and I think my ex-colleagues [in UK government] will be playing through different scenarios,” Alty told FoodNavigator.

The UK’s position outside of the EU could, he cautiously predicts, have benefits alongside the perceived negatives.

“On one side, we [the UK] have a balanced trade with the US,” he continues. “But the EU has a very big export surplus.”

Last year, for example, the EU exported €27bn of food and drink goods to the US, up 19% on the previous year. For the first six months of this year, the States paid €1.5bn more, like for like, on EU food and drink imports​.

How much UK food and drink is exported to the US? 

The US is the UK’s third largest market for food and drink exports, equating to £2bn in 2021 and £2.4bn in 2022.

“To that extent, the UK is maybe not top of his list, but he did say [tariffs] across the board, so one must take that reasonably seriously,” adds Alty.

If global tariffs were introduced, it could give smaller countries like the UK a competitive advantage to negotiate a more favourable agreement.

Though many analysts and trade experts believe tariffs will be a negotiating tactic for the incoming US government, as Alty agrees implementing a global 10-20% tax across the world wouldn’t be good for the US economy.

“We’ll [the UK] will be trying to find ways of collaborating positively, on things that we can trade with the US,” he explains.

“Other countries, like Taiwan, recently committed to buying loads of military equipment,” which could help it to be viewed positively by Trump’s administration.

It was possible the US could reopen UK trade deal negotiations from the last Trump presidency that were shelved by president Biden in the run up to the 2024 election.

Food and drink trade war

Other experts believe food would have to be part of any UK/US trade negotiations, though Alty says it could “prove to be a bit of a dilemma” due to the controversy around US food standards compared with the UK’s EU-derived standards. Chlorinated chicken from the US is often raised as a food trade issue.

And Trump would be keen to secure a like-for-like food trade agreement, if discussions were opened, Alty believes. This would mean an expectation that UK agricultural exports, under a free trade agreement, would be reciprocated with US imports; so beef for beef and chicken for chicken.

Then there is the need for leaders to consider which countries' trade policies they align with. "If you wanted to get closer to the EU, then the EU's [trade] positions are diametrically opposed to the US's,” explains Alty. 

Food and drink had been used as a pawn in previous EU/US trade wars – such as the 'whiskey wars' – Alty reminds.

“There was a row over subsidies between Boeing and Airbus, which came to a head in the first Trump presidency and the US slapped tariffs on the rest of the EU, including whisky and a range of other goods.

“We put tariffs on bourbon from the US, so it can get into that tit-for-tat area,” he warns.

Though the ‘whiskey wars’ were resolved under Biden, Alty warns trade wars often focus on iconic products or products that will hurt very specific regions of a country, such as whisky from Scotland.

The food and drink sector was also infamously omitted from the European Commission's competitiveness strategy ​earlier this year, which identified the GDP gap between it and the US as a threat.