Kingston Smith hosts ‘Trump, the UK and International trade debate’
On Thursday 16 February, Kingston Smith held a debate on ‘Trump, the UK and International trade’.
The debate was chaired by former Kingston Smith Senior Partner, Sir Michael Snyder. He was joined by a distinguished panel of guests: Vernon Hill, Chairman and Founder of Metro Bank, British Conservative Party politician, Professor Mark Hoban, and Richard Kopelman, CEO and Managing Partner of Aprio LLP.
The overarching theme of the debate was, “Although US-UK relations have always been on very good terms, with the result of Brexit and trade deals being dismantled and rebuilt, should UK SMEs be prepared for uncertainty?”
The panel was unanimous in the opinion that it’s essential for the UK to build a good relationship with Trump. Vernon Hill was confident that Trump will be ‘a giant plus’ for Britain.
Mark Hoban pointed out that the UK and US relationship is one of the most longstanding relationships there is and it’s particularly important now, with Brexit. The UK wants to do a trade deal with the US when we leave the EU and the best way to do that is to forge close links with the President. But he questioned whether Trump can reconcile what he said on the stump to what happens in practice and then be re-elected in four years’ time. It was agreed that Trump and his administration hadn’t got down to the details yet and that these ideas are currently being worked through at a top level; the end result may be quite different to Trump’s original aspirations.
One firm theme throughout was that the President can do very few things alone – the vast majority of changes must be cleared by Congress. However, it was noted that, despite the ‘dance’ going on at the moment with the US judiciary, Trump will have 100% control over immigration. It will be interesting to see the impact of his immigration policy and whether the US will be able to recruit the talent it needs, particularly in its Tech sector, if it can’t recruit as easily from abroad.
The UK cannot sign a trade deal for up to two years after Article 50 is triggered, halfway through Trump’s term – the panel was asked to consider whether forging a relationship with Trump might leave the UK high and dry if he is ousted after just one term.
Mark Hoban stressed that Liam Fox and his department must have these discussions over the next two years so that trade agreements are ready to sign as soon as the UK exits the EU. Vernon Hill was emphatic that the two countries will always be very close and a bad trade deal with the US should be last on any list of worries.
The panel discussed whether UK suppliers stood a chance against Trump’s policy to ‘buy US’. Richard Kopelman believes it will be challenging for all importers into the US, but that there are opportunities for UK businesses that are prepared to invest in US manufacturing companies. He also questioned whether the US may create a glut of manufactured product and noted that there will need to be a market for it – which means a good trade deal with Europe, and also in Asia where US-manufactured goods are popular and viewed as high-end.
There was a great deal of debate over whether Trump’s policy to weaken the dollar would work, or whether it would backfire on the manufacturing industry. Vernon Hill said that the US admits to having a 300 year supply of oil and gas, due to the potential of fracking, and posited that, by the time Trump leaves office, there will be a 900 year supply as he won’t have Obama’s qualms about drilling in the Atlantic, the Arctic or on government-owned land. In his opinion, this could have much bigger impact on the world economy than any trade deals.
Of course, it was impossible to discuss Trump and trade without commenting on the wider context of political instability. Vernon Hill noted that the Trump election was a surprise to everyone – including Trump! – and, like Brexit, it was a rebellion against the establishment and the elite. Mark Hoban commented that the first few weeks of the US regime has not been as straightforward as they should have been, and it is no surprise that North Korea tested missiles and Kim Jong Un’s half-brother was assassinated. He said that there is recognition of a lack of certainty in the West at the moment and some factions will exploit that. Trump’s presidency is creating chaos which isn’t good for the US and its allies; the sooner there is a reassertion of clear, considered US leadership, the sooner the world will be a slightly safer place.
The well-attended debate prompted insightful questions from the audience and generated plenty of food for thought. There is no doubt that Trump’s presidency will certainly be interesting and we look forward to assessing his impact on UK business and trade at a future debate as his term unfolds.
You can watch the debate in its entirety by clicking here.