UK’s Growing US Trade Surplus Highlights Trump Tariff Threat
(Bloomberg) -- The UK ran a significant trade surplus with the US in 2023, British government data show, placing the country in the hot seat as Donald Trump prepares to revive his protectionist push in the White House.
Most Read from Bloomberg
NYC Commuters Get New Way to Dodge Traffic: $95 Helicopter Rides
Scaramucci, Ackman Donate to Whitney Tilson’s NYC Mayoral Run
The Office for National Statistics said exports of goods and services exceeded imports by £71.4 billion (84.6 billion euros), up almost 14% from the year before. While the bulk of that came from tariff-exempt services, the UK turned its small goods deficit with the US into a surplus over the period thanks to strong appetite for cars and chemicals.
News of the £2.5 billion goods surplus will play into Trump’s plans to target countries with which the US has a trade deficit. Leading British manufacturers are particularly exposed to tariff threats as the US is the top destination for sales of Land Rovers, machinery and pharmaceuticals.
“As tariffs loom, the UK should keep its mind on ways to avoid them,” said Emily Fry, a senior economist at the Resolution Foundation. “Britain sold £60 billion of goods to the US and imported £58 billion of their goods in 2023 making the US by far our second-largest trade partner after the EU.”
While his exact policies are yet to be announced, Trump, who is set to be sworn in as US president on Monday, campaigned on a pledge to slap tariffs of as much as 20% on goods from most countries in the world, with higher rates for China and Mexico.
The US’s own figures show it has a small surplus with the UK, due to discrepancies in the way the data is measured and the countries included.
Higher US tariffs would cast further doubt on Chancellor of the Exchequer Rachel Reeves’ plans to revive growth. The new year bond market rout ramped up the pressure on the government to grow the economy and calm fears of stagflation.
It would also complicate matters for the Bank of England as it takes a cautious approach to easing interest rates amid signs that Britain is in the grip of both economic stagnation and sticky inflation.
Alan Taylor, the BOE’s newest rate-setter, warned that trade policy and geopolitics could come out “left of field,” in an interview with the Yorkshire Post. While he denied to speculate on the impact of US policy, he said that tariffs could divert international exports to the US elsewhere, pushing down inflation. However, exchange rate movements “could move in the opposite direction,” he cautioned.
A recent report published by the Boston Consulting Group showed post-Brexit trade frictions and US protectionism may hold back UK trade, with goods imports and exports set to grow by just 0.7% in the decade from 2023, well behind the global average of 2.9%.
The US was the UK’s largest export partner for goods, with chemicals and machinery and transport equipment as the top traded commodities, the ONS report showed. The UK exports about £60 billion of goods to the US, the equivalent of 15% of all of its good exports.
However, the impact of any tariffs will be limited by the UK’s status as services powerhouse. The UK exported £126.3 billion of services to the US in 2023, thanks to strong demand for British management consultants, public relations specialists and lawyers.
“Britain’s services trade has come through Brexit surprisingly unscathed so far, and is not directly targeted by Trump’s potential tariffs, suggesting that services could be the key to UK’s future prosperity,” Fry said.
Most Read from Bloomberg Businessweek
Walgreens Replaced Fridge Doors With Smart Screens. It’s Now a $200 Million Fiasco
Giant Batteries Are Transforming the World’s Electrical Grids
©2025 Bloomberg L.P.