Today’s Telegraph:
“Matthew Lynn
02 April 2025 10:45pm BST
We have not seen much in the way of deregulation. Nor have we signed many blockbuster trade deals. And yet for anyone who is still wondering what the benefits were of Brexit, we now have a decisive answer. It has allowed the UK to escape the worst of Donald Trump’s tariff wars — and in the medium term that could pay extraordinary dividends.
As he unveiled his global tariffs at the White House, the UK was mercifully low down on the list. It wasn’t quite the “nul points” we often get at Eurovision, but our exporters will only face a 10 per cent levy on everything they sell into the US. It was less than much of the rest of the world. And perhaps most importantly, it was only half the 20 per cent imposed on the EU.
Sure, that will still hurt. The United States is our single biggest export market, and the levies will depress demand. Even so, there is no question that we have been let off relatively lightly.
And we can thank Brexit for that — for three reasons. First, if we were still part of the bloc, or even the Customs Union as hardcore Remainers would like us to be, we would be facing an immediate 20 per cent tariff rate, twice as high as we now will.
Next, the EU will almost certainly start a pointless tit for tat tariff war. It will impose retaliatory tariffs, prompting another round of higher levies from the White House, until tariffs hit 40 or 50 per cent on both sides. Inside the EU, we would have no choice but to go along with that. Instead Sir Keir Starmer and his Chancellor Rachel Reeves should be able to see that there is no point in trying to humiliate Trump or force him to back down. It won’t work. Our tariffs will stay at 10 per cent and we may even be able to negotiate them even lower or eliminate them completely, something the EU will find impossible.
Finally, it will mean British industry now has a clear competitive advantage over the rest of Europe. For Americans, a Scotch will be cheaper than Cognac, and Burberry cheaper than Hermes, but still with a luxury feel. Even better, there will now be a powerful incentive for EU manufacturers to ramp up production in the UK when they are selling products into the US. They will face lower tariffs while still manufacturing in Europe. A few may even move completely.
Of course, the tariffs will still damage the global economy. In effect, they are a huge tax increase, and one that will be paid by American consumers. They will leave the international economy in far worse shape than it was. Even so, the UK has clearly escaped relatively lightly. We might even be better off. And we have our departure from the EU to thank for that.”
An interesting read.
Sorry for the long post but it’s behind a paywall so I’ve cut & paste instead of providing a link, for those interested.
Of course just scroll past if you’re not!
