A new government analysis suggests that a US-UK trade deal would deliver only modest economic gains, worth roughly £3.4 billion over 15 years—equivalent to the annual contribution of a small town. In contrast, leaving the EU without a deal could shrink the economy by 7.6% over the same period.
The analysis, published by the Department for International Trade, estimates that a comprehensive agreement with the United States would boost the UK economy by just 0.16% after 15 years. This figure pales in comparison to the potential losses from failing to secure a trade deal with the European Union, which would leave the economy 7.6% smaller than under current arrangements.
Sir Martin Donnelly, former permanent secretary at the Department for Business, Energy and Industrial Strategy, described the situation as akin to swapping a three-course meal for a packet of crisps. The government aims to secure deals with both the US and the EU, but parallel negotiations may force difficult choices.
The analysis notes that US tariffs on UK exports are relatively low, at around £493 million out of a total trade relationship worth £220.9 billion. Non-tariff barriers, such as regulatory differences, may be harder to eliminate. Trade Secretary Liz Truss has insisted that any deal must protect the NHS and uphold UK food safety and animal welfare standards.
With Prime Minister Boris Johnson's deadline for an EU deal set for the end of 2020, and US President Donald Trump seeking progress before the autumn elections, tougher decisions on post-Brexit trade priorities are imminent.
