Businesses that export to the US should prepare for a tough time under Barack Obama, the Confederation of British Industry has said.
And firms in manufacturing-heavy regions like the West Midlands are most at risk from potential tariffs and anti-free-trade measures, according to Rhian Chilcott, the head of the CBI’s office in Washington DC.
Miss Chilcott said while Obama was not believed to be committed to protectionism, he would be bogged down by an American government getting more isolationist, in an economic sense.
And she said the UK would struggle to make its voice heard in the halls of power next year.
“I think everybody is sitting around watching and waiting to see what the new president is going to do,” said Miss Chilcott. “There’s a degree of optimism if he can run his economy the same way he ran his campaign, maybe he can see his way to sorting some of the tricky international issues.
“He’s been quite cautious so far, so we’re having to look at what he’s done in his campaign. There was a lot of debate at the time about whether he’s being protectionist on trade. But I think most commentators believe that was just a degree of campaign rhetoric.
“If you look at Obama’s advisors his economic and finance team are people who understand the idea of free trade, and you have to believe he’s getting it.”
But she said that whether or not Obama wanted to keep markets open, the fact he did not have any leverage over Congress would mean he would struggle to fight against a rising tide of protectionism in the US.
Speaking at a CBI executive lunch held at Hammonds in Birmingham yesterday, she said: “Talking about protectionism, all you can do is to compare the general spirit in the US to the UK.
“The US just isn’t as exposed to global problems as the UK is – maybe because of the US’s size they believe they can go it alone, and that could lead to a degree of protectionism.
“There’s going to be a lot of political pressure for politicians to look after their own, particularly in sectors like manufacturing where there are still pockets of great vulnerability in the US.
“The sector there needs to rethink urgently how it supports training and jobs – I can understand why American workers are scared of losing their job.
“So it’s not surprising that there is so much pressure on the politicians there.
“We are looking at a very constrained market in the future.
“Hopefully we won’t be seeing anything as bad as increased tariffs and the like, but we can’t be sure.”
She said the businesses community did not always live up to its responsibilities when it came to free trade, and businesses and lobbying organisations like the CBI needed to do more to persuade people free trade was the way forward.
And she added the UK as a whole would find it very hard to catch the ear of the new president – who officially takes over in January next year – when it came to business.
“I think our hardest task will be getting on the radar screen in the first place, she said.
“Because the relationship between the UK and the US is so close people take it for granted.
“We are going to have to be very vocal to make our voices heard under this administration. We have to make sure the British business case is put across loudly and clearly.”