A brief history of US President’s records when trading with the UK
Joe Biden’s recent victory in the US presidential race means after four years of Republican rule under Donald Trump, the US is set to be led by a member of the Democratic Party once again.
Biden’s victory is likely to impact any future UK-US trade deals, the discussions of which have been ongoing since the Brexit vote back in 2016. So, with the imminent end of the UK’s transition period out of the EU, we thought we would look back at individual US president’s records when trading with the UK to get an idea whether Biden’s victory was the best possible outcome for UK business.
Franklin D. Roosevelt (1933-1945) – Democrat
The president that led the US out of the Great Depression, through WWII, and the only president to serve more than two terms in office, Franklin D. Roosevelt, or FDR as he is often referred to, is considered by many to be the greatest ever US president. But how did he fare when it came to UK-US trade relations?
Well, most famously, Roosevelt oversaw the Lend-Lease Act of 1941, which allowed the previously neutral US to provide the UK with food, oil, and other materials during WWII in exchange for setting up US military bases in eight of the United Kingdom’s colonies. Overall, this led to an estimated $31.4 billion worth of supplies coming to the UK, with the funding forming an essential part of the British war effort.
The Lend-Lease Act finished in 1945 with the ending of the war. FDR also died shortly afterwards, stifling any chance for him to strike up any future UK-US trade deals.
Ronald Reagan (1981-89) – Republican
America’s 40th president and previously a famous actor in Hollywood, Ronald Reagan’s reign is also notable for accelerating the global war on drugs.
However, November 1985 saw the signing of the Anglo-Irish Agreement, with Reagan announcing his support for it shortly after. This led to the International Fund for Ireland (IFI) being set up, which distributes funds throughout the Republic of Ireland and Northern Ireland to encourage contact and dialogue between unionists and nationalists in the region. The fund also aims to promote social and economic advancement. Since it was set-up, the United States is reported to have allocated more than $543 million to the IFI.
The Visa Waiver Program, which allows tourists from the UK and other European countries to enter the US on a temporary basis, was also set up in 1986. This has subsequently led to thousands of UK citizens travelling to the US in the years since, providing millions for the US tourist industry.
George Washington (1789-97) – Independent
The first president of the United States and one of its Founding Fathers, George Washington had an important role to play in early trade between the UK and US after the ending of the American Revolutionary War in 1783.
Washington signed the first piece of substantial legislation passed by congress into law: the Tariff Act of 1789. The country had initially failed to impose import tariffs on foreign goods, whilst many countries, including Britain, imposed high duties on US goods, which was damaging the US domestic market. The Tariff Act of 1789 attempted to rectify that.
However, it’s interesting that James Madison, the Congressman who sponsored the bill and later president of the United States, was unable to include a provision that would have discriminated against British imports during the final stages of its passing. So, UK-US trade might have gotten off to a shaky start!
Benjamin Harrison (1889-1893) – Republican
The grandson of Willliam Henry Harrison, the 9th US president, Benjamin Harrison, the 23rd president, is part of the only grandfather-grandson duo to have held the office.
He famously oversaw The Tariff Act of 1890, commonly referred to as the McKinley Tariff. This raised the average duty on imports to almost 50%, which was was done to protect American industries.
The effect it had on British trade with the US is debated by historians. However, some scholars have highlighted that British tinplate exports to the US were affected by it and other trade tariffs passed by the US during the late 19th and early 20th centuries.
What could a victory for Donald Trump have meant for US-UK trade?
Although this might be a question we will never know the answer to, Donald Trump started proceedings for a US-UK trade agreement for when the UK leaves the EU back in October 2018. So, it is interesting to take a closer look at what might have been if Trump had won a second term as US president.
Some have cited Trump’s Scottish Mother and golf courses as reasons why he would have been more likely to strike up a UK-US trade than Biden. But who can forget his comments that the NHS would be on the table if ever a deal was struck? With Trump previously proposing to privatise Medicare, the federal health insurance program set up during Barack Obama’s presidency, for the sake of keeping the NHS as publicly-funded as possible, Trump’s failure to win a second term might have been a good thing.
So, what can we expect from Biden?
What is important to note is that the UK is already one of the US’ biggest trade partners: the UK was the United States’ 5th largest goods export market and 8th largest supplier of imports in 2019, whilst the US and UK share the world’s largest bilateral foreign direct investment partnerships. So, continuing trade between the UK and US would seem in the interests of both countries, regardless of who is leading the US.
However, with a no-deal Brexit looming, which could damage the integrity of the Good Friday Agreement, some have suggested that Biden could block any future trade deal. If this is the case, once again it seems Britain’s future economic prosperity is dependent on sorting out the almighty mess that is Brexit.