The USA’s biggest trading partners in terms of goods in 2016 were China and Canada, with Canada constituting the destination for the highest percentage of US exports (18.3%) and China the source of the highest percentage of US imports (21.2%). The US’s relationship with Canada is governed by NAFTA. The US does not have a free trade agreement with China.
The incumbent President Trump has frequently expressed discontent about both NAFTA and the negative balance of trade that the US has with China, and has supported policies which have widely been called protectionist. He also frequently advocates the use of higher tariffs.
Currently, the USA’s average applied MFN tariff rate is 3.5 %. Its highest tariffs are concentrated within agricultural products, particularly alcoholic beverages and tobacco (19.1%), dairy products (16.6%) and sugar and confectionary (16.4%). Meanwhile, clothing attracts an average MFN applied duty of 11.6% compared to an average of 3.2% for non-agricultural products. However, Trump has proposed increasing tariffs on a number of goods, including steel.
The UK had a £37bn trade surplus with the USA in 2015, comprising a positive £23bn balance of payments in services, and £14bn trade surplus in goods.
The greatest trade of goods between the USA and the UK is in the sector of Machinery and Transport Equipment, with the biggest UK export to the USA by far within this sector being road vehicles, (£7bn in 2016).
In terms of services, the greatest trade between the USA and the UK is in Professional, management consulting, and R&D services, with a balance of payments of positive £3bn.