The U.K., long struggling with the economic fallout of Brexit, may soon see a turnaround - thanks to the U.S. President Donald Trump’s proposed 30% tariffs on European Union goods, set to take effect on August 1 unless a trade deal is reached.
These looming duties could make the U.K. more attractive for manufacturers seeking to avoid steep U.S. tariffs on EU exports. Alex Altmann of advisory firm Lubbock Fine noted that the U.K.’s lower tariffs, stemming from its existing trade deal with Washington, could entice EU firms to shift or expand operations in Britain, especially with its post-Brexit surplus manufacturing capacity.
While Brexit pushed many companies—particularly financial firms like Goldman Sachs and JPMorgan—to relocate parts of their business to EU cities such as Dublin and Frankfurt, the feared mass exodus never fully materialized. Still, the economic damage was notable: the Office for Budget Responsibility estimates the U.K.’s GDP is 5% lower than it would have been without Brexit, and trade volumes are projected to be about 15% smaller in the long term.
Today, Britain stands at a potential sweet spot, having reestablished trade ties with both the EU and the U.S. But the extent to which it can benefit from EU-U.S. trade tensions remains uncertain. Trump could alter or scrap the tariff plans altogether, and even if implemented, business relocations take years, not months.
Moreover, experts like Carsten Nickel of Teneo caution against overestimating the U.K.’s manufacturing appeal, emphasizing its strength lies more in financial services than in export-heavy industries like those of Germany or Italy.
Thus, while the U.K. may be positioned to take advantage of transatlantic trade shifts, any real gains will depend on political outcomes - and time.