President Trump announced a new trade deal with the United Kingdom, but an expert warned of potential pitfalls.
President Donald Trump proudly announced a trade agreement with the United Kingdom.
However, the United Kingdom is not the United States’ biggest trade partner.
Trinity University Professor of International Business, Dante Suarez, said it’s a “lose-lose situation.”
Suarez said the trade agreement between the two countries is not a simple, full proof agreement.
“These things can sometimes take months or years to negotiate because there’s a lot of minutiae on exactly what tariffs things are going to have and what would be the consequence if these are broken,” Suarez said.
A White House fact sheet on the trade deal touts unprecedented access to the United Kingdom markets.
It lists opportunities to “expand U.S. market access in the UK” and create a “$5 billion opportunity for new exports for U.S. farmers, ranchers and producers” through agricultural products like beef.
However, the UK is not the United States’ top trade partner.
“That represents about 3% of all of our trade,” Suarez said.
China, on the other hand, is a major player in the field of trade with the U.S.
“Basically, all imports and exports to and from China have been brought to a hold,” Suarez said. “People may not realize it just yet because companies have tried to be a step ahead of this, but we are going to start seeing disruptions like what we saw for COVID, where you’re going to see empty shelves and difficulty in getting things.”
Shelves are not empty yet, and they likely won’t be empty this week, but Suarez warned we could start to see major price and availability changes as early as this summer.
“Imposing tariffs and then having tariffs imposed on us as a retaliation, it’s a lose-lose situation,” Suarez said.
U.S. and Chinese officials will meet in Geneva, Switzerland, the weekend of May 9 to discuss tariffs in hopes of leaving with a deal.
“I will tell you that China very much wants to make a deal,” Trump said. “We’ll see how that works out.”
The trump administration is hopeful that the U.S. imposing tariffs on other countries will bring manufacturing back to the U.S., but Suarez said that’s a long-term goal.
“When a company is deciding to make a relocation, especially something in manufacturing, like a car company to make cars in America, that’s a process that takes five to 10 years,” Suarez said. “Unless they have absolute certainty that these tariffs are here to stay in the long run, companies – I don’t think – they are will make that big of a change to their supply chains.”
“This one is very disruptive to our own economy,“ Suarez said. ”I would want to stress, in particular, the economy of Texas. We have so much trade with Mexico and so far, we basically only have the 10% tariff, but when you compare it [to] where we were coming from 80 years worth of free trade, that’s still pretty high.”
