Things aren’t as bleak as they seem

Tony Ward

November 14, 2016

Tony Ward is chief executive of Clayton Euro Risk

The result is in. Donald Trump has won America’s presidential election, a victory that wrongfooted pundits and pollsters alike. Mr Trump triumphed by securing states in the rustbelt Midwest, such as Pennsylvania and Wisconsin that had voted Democrat for decades but where voters were receptive to his populist pledges to repatriate jobs and curb free trade.

Many are up in arms. Shocking, most certainly, but surprising? Possibly not given the disaffection of much of the US electorate.

So what to make of Mr Trump’s policies? Well, Mr Trump has described his foreign policy in only the vaguest terms, preferring to use slogans like ‘America first’. What that means in practice is unclear, although he has declared he will apply tariffs to imports from China and Mexico and demanded that allies like Japan and the Europeans pay more for their defence. Mr Trump’s bark may turn out to be worse than his bite, but it is likely that the Trump presidency risks ushering in an era of protectionism and trade disputes, as many economists have warned. According to the Peterson Institute, his trade policy would trigger the loss of 4.8 million jobs in the US.

Specialists say that Britain is vulnerable to the anti-trade mood because the US buys 17% of the UK’s exported goods and nearly a quarter of its exported services, making America our largest trading partner outside the EU. America accounts for only 14% of eurozone exports but it accounted for 40% of the single currency bloc’s export growth last year. Simon Wells of HSBC said: “A more protectionist US could add further uncertainty to the UK’s trade outlook.”

That may be the case. And yet and yet…

I believe things are not be as bleak as they may seem. I tend to side with foreign secretary, Boris Johnson, who is of the mind that what’s done is done and to focus on the positives that could emerge for the UK – and extremely strong positives these may turn out to be.

Mr Johnson has demanded that critics ‘snap out of this doom and gloom and whinge-o-rama’. Indeed.  And the UK is certainly in a good position to do this. Theresa May’s recent 10 minute phone conversation with Mr Trump revealed he saw the UK as a very special place for him and his countrymen. The President Elect insisted he had close and personal connections with, and warmth for, the UK, adding that he was confident the special relationship would go from strength to strength. He invited Mrs May to visit the White House in the spring.

I’m hoping that Mr Trump will look favourably on Britain and will facilitate a quick trade deal, having been previously critical of the EU and a supporter of Brexit.

Uncertain times lie ahead and there is no doubt that Brexit and Donald Trump’s victory will bring much more change than any conventional election. However, it is in our interests to remain impartial and seek out trade deals that will benefit the UK, particularly as it looks increasingly likely that Theresa May will push for a ‘hard Brexit’. If that means courting Mr Trump for the good of the economy, then a courting we should go.

Show Comments