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U.S. Threatens Trade Barriers If UK Leaves EU

It seems the United States is not done alienating its few remaining allies as the UK is already potentially pivoting towards China.

According to a senior United States official, Washington would not agree a separate free trade deal with Britain if the latter leaves the European Union.

U.S. trade representative Michael Froman spoke out on the issue, the first time that a senior U.S. official has declared the consequences of a so-called Brexit on trade between the two allies. By the end of 2017 British voters will vote on whether or not to stay in the EU, and opinion polls reveal growing support for leaving the union, according to The Guardian.

UK-U.S. trade could suffer after potential EU exit

Those campaigning for the UK to leave the EU argue that the country would be better off economically thanks to bilateral free trade agreements (FTAs) with trading partners. Froman’s comments undermine that argument, threatening the $54 billion worth of British goods sold to the U.S., which is Britain’s biggest export market after the EU.

“I think it’s absolutely clear that Britain has a greater voice at the trade table being part of the EU, being part of a larger economic entity,” Froman told Reuters, He also claimed that membership of the union affords Britain a stronger position in negotiations.

“We’re not particularly in the market for FTAs with individual countries. We’re building platforms … that other countries can join over time,” Froman said.

Tariffs and trade barriers would be imposed

He later added that an EU exit would mean that Britain would be subject to tariffs and trade barriers like those imposed on countries that do not have FTAs with the U.S. “We have no FTA with the UK so they would be subject to the same tariffs – and other trade-related measures – as China, or Brazil or India,” he said.

It seems as though Washington is bullying the UK by threatening such an action, but supporters of the continued membership of the EU will be happy that their case has been strengthened. Washington has just signed the Transatlantic Trade and Investment Partnership (TTIP) with 11 nations and is currently negotiating with the EU.

If Britain is not part of TTIP nor part of the EU, vehicles exported to the U.S. would face a 2.5% tariff. The U.S. is currently the second-largest export market for British-made vehicles, and the move would put the UK automotive industry at a distinct disadvantage against German and Italian rivals.