In 2024, the United Kingdom achieved a notable surplus in its goods trade with the United States, reaching £2.1 billion. This represents a 3.6% increase from the previous year, reinforcing the UK's balanced trading relationship with its transatlantic partner. The UK's economy, having expanded at an annual rate of 1.4% in the fourth quarter of 2024, exceeded market expectations and contributed to this trade success. The trade dynamics between these two nations have been relatively stable since 1999, with the exception of 2022 when a surge in gas imports led to a deficit of £1.9 billion.
The UK's export figures reveal that it exported goods worth £58.7 billion to the US, while importing £56.6 billion from the US in 2024. Despite the positive trade balance, the UK's surplus remains modest compared to other US trading partners. However, this small but significant surplus may serve as a strategic advantage for the UK as it navigates potential tariff challenges imposed by President Trump's administration.
President Trump's 25% import tax on steel and aluminum poses a potential threat to future trade relations. The UK's ability to maintain a surplus is crucial in its efforts to minimize or avoid these tariffs, which could otherwise impact its economic exchanges with the US. The ongoing surplus provides a foundation for the UK to engage in negotiations aimed at securing more favorable trading terms.
The economic growth of the UK in Q4 2024 has also played a role in bolstering confidence in its trading capabilities. The economy's expansion at a rate of 1.4%, surpassing the anticipated 1.1%, has been a contributing factor to the positive trade figures. This economic performance has had an uplifting effect on the Pound Sterling, which trades close to 1.2500 against the US dollar during the European session on Thursday.
In addition to the GBP/USD performance, EUR/USD is experiencing moderate gains above 1.0400 in the European session. These currency movements are indicative of an improving risk mood and reflect investor confidence in the UK's economic prospects.