Brexit made businesses abandon the UK. Trump's hefty EU tariffs could bring them back

In 2016, the U.K.'s ballot to permission the EU prompted many businesses to shift operations to the European continent, taking investment and headcount with them.

Fast guardant to 2025, and the specter of U.S. President Donald Trump's 30% commercialized tariffs connected the EU, which volition footwear successful connected Aug.1 unless a commercialized woody is reached, could bring them back.

"The U.K. could beryllium a large indirect winner" if the threatened U.S. duties connected the EU go a reality, according to Alex Altmann, spouse and caput of the German table astatine London-based accountancy and concern advisory steadfast Lubbock Fine.

"If the tariff complaint for the EU yet ends up anyplace adjacent this 30% level past the U.K.'s overmuch little U.S. tariffs would connection a large inducement for EU companies to displacement immoderate of their manufacturing to the U.K. oregon to grow their existing U.K. facilities," helium noted successful emailed comments. 

"The U.K. has a batch of spare manufacturing capableness aft Brexit. A large spread betwixt U.K. and EU tariffs would beryllium a large accidental for the U.K. to regain immoderate of its mislaid presumption arsenic a cardinal European manufacturing hub," added Altmann, who is besides the vice president of the British Chamber of Commerce successful Germany.

As things stand, the U.K. has already struck a commercialized woody with the U.S. that reduces duties connected cars to 10% and grants it the lowest work connected alloy imports. London besides has a "reset" woody with the EU, aft the Labour authorities nether Prime Minister Keir Starmer — who was opposed to Brexit — carved retired a commercialized statement pursuing years of post-referendum acrimony.

The saccharine spot the U.K. present finds itself successful comes aft respective years of uncertainty and angst for businesses, arsenic they've tried to navigate a post-Brexit satellite of much reddish portion and barriers to export.

That's been an ongoing gripe for exporters, fixed that the 27-country EU remained the U.K.'s largest trading spouse aft Brexit was yet enacted successful 2020. The EU accounted for much than 50% of Britain's overseas commercialized successful goods successful 2024, according to the European Commission.

Supporters and critics reason implicit the merits and disadvantages of Brexit and the divorcement from the EU's azygous marketplace and customs union, arsenic good arsenic the escaped question of goods and radical that came with EU membership. Yet astir economists hold that Brexit dented U.K. exports, jobs and economical growth.

The Office for Budget Responsibility, the U.K.'s independent forecaster, estimates that exports and imports will beryllium astir 15% lower successful the agelong run, compared to if the U.K. had remained successful the EU.

Although economists reason implicit the interaction connected the wider economy, it's mostly agreed that the U.K.'s GDP is astir 5% little than it would person been, had Britain not voted to permission the bloc.

While the U.K. is reveling successful its newfound harmony with its American and European concern partners, the grade of immoderate windfall that comes arsenic a effect of the EU's trading symptom with the U.S. remains to beryllium seen.

It remains unclear whether Trump's planned 30% tariff connected the bloc volition really spell up connected Aug.1. The U.S. president's mercurial quality means the eventual levy complaint could spell higher — helium antecedently threatened a 50% tariff — oregon lower, toward the baseline 10% level that the EU is pursuing.

Not everyone agrees that the U.K. could payment from commercialized misfortunes that befall the EU, immoderate the result of last-ditch talks betwixt Brussels and Washington.

"First of all, the 30% tariffs for the EU, they're not a given," Carsten Nickel, managing manager astatine Teneo, told CNBC past week, pointing retired that immoderate imaginable post-tariffs displacement successful concern business from Europe backmost to the U.K. would beryllium improbable to hap quickly.

"If we were to speech astir moving accumulation facilities from Europe to the U.K. due to the fact that the U.K. has a woody with the U.S. — the clip skyline for that is simply a multi-year, if not decade-long, benignant of clip horizon," helium said.

In addition, Nickel noted that the U.K.'s spot remained successful fiscal services alternatively than successful manufacturing, which remains much prevalent successful export-oriented countries similar Germany and Italy.

"The world is that the U.K.'s comparative vantage is not successful high-end manufacturing ... truthful the thought that you're going with this worldly that you're presently producing in, say, Germany and Switzerland, and you're moving that to the U.K. time ... it's conscionable not a determination that that a concern person successful Europe tin instrumentality conscionable similar that," Nickel said.