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Commenting on the recent news that EU plans retaliation against President Trump in response to US trade tariffs, as reported in City AM, Mihir Kapadia, CEO of Sun Global Investments said:
“Any trade tariffs imposed by the US on steel and aluminium are likely to have a negative impact on the US’s trading partners, as the stock market reaction to the Twitter announcement of Trump’s tariffs have shown. The UK is arguably at a unique disadvantage, due to the uncertainty caused by Brexit. Steel may only play a comparatively small part in the UK economy compared to other manufacturing sectors, but the vast majority of trade has been with the EU; the latter accounts for over half of the UK’s steel trade.
The terms of trade of trade with the EU will change after Brexit and the UK currently has no free-trade agreement with the US. Therefore, the UK’s steel industry would be particularly vulnerable, and high US tariffs would likely have a detrimental effect that could have far reaching consequences.
The biggest risk to UK industries would be the escalation of a trade war between the US, EU and other countries. With the UK out of the EU, there would be no guarantees of safety in a hostile trading environment built around beggar thy neighbour trade policies rather than free trades.”
His comment was featured in City AM Online.