Britain May Escape Unscathed from American Tariffs

choi

(1) "Liberation Day" | John Bull; Britain is unusually well shielded from a tariff shock. The Economist, Apr 12, 2025, at page 51
("But as Donald Trump's on-and-off again tariff rodeo shakes the world economy, Britain has found itself in the rather unfamiliar position of being quite well insulated, and even in places poised to benefit from the turmoil. * * * Even before Mr Trump appeared to climb down on Apr 9th, offering a 90-day pause on tariffs above 10% to all countries except China, Britain had landed with the lowest 10% rate on most of its goods exported.   Unlike every other economy of comparable size, though, the bulk of British exports are in services, which are not directly affected by tariff conversations. America is Britain's second-largest trading partner, after the European Union (EU), but two-thirds of that trade is in services, mostly in desk work like banking or law.   If serious pain comes [after Trump's tariffs], a likelier channel is through a global slowdown spilling over to Britain. But that sort of shock, a reduction in global demand, is something that traditional recession-fighting tools are equipped to handle")

choi

(2) Briefing: Could Europe Fight Back? A Dangerous Divorcée | If it comes to a stand-off, Europe has leverage over America. The Economist, Mar 15, 2025, at page 15 (under the heading "Briefing: Could Europe Fight Back?")
("Although America could retaliate in similar vein, it stands to lose more from a fight over services. Overall it exports about €100bn more in services to the EU than vice versa. That is the inverse of the trade in goods, in which Europe posted a surplus of almost €200bn last year. (Britain is different: it runs a surplus in services with America but a deficit in goods.)" )

Note:
(a) pie chart (heading: Services account for Two Thirds of British Exports to the US) in
Lucy White, Trump Tariffs on UK Would Be 'Manageable,' Economists Say. Bloomberg, Nov 14, 2024 )reproduced with permission in Msn.com)
https://www.msn.com/en-us/money/ ... inance-verthp-feeds
, where the pie chart showed the bilateral trade in both goods and services, based on data collected by Britain's Office for National Statistics (ONS). Thus "exports" is Britain's to US. That year, Britain had overall trade surplus with the US, foods and services COMBINED.

(b) Andy Bruce, Surpluses and Services Explain Why UK Might Avoid Trump Tariffs Reuters, Feb 3, 2025.
https://www.reuters.com/world/uk ... tariffs-2025-02-03/
("Unusually, both countries report trade surpluses with each other owing to differences in the way they measure trade")

My comment: For years, I have been puzzled by what Britain makes. Other than Maserati and Rolls Royce, Britain seems to make nothing I know of. Other nations in Western Europe make luxury goods.