UK Construction Media

What does a Trump administration mean for the UK construction industry?

News   •   Nov 18, 2016 13:43 GMT

As the world comes to terms with Donald Trump’s shock win in the US presidential elections that will see him become the 45th president of the United States of America, it would appear that his election win is the most divisive since Richard Nixon secured his secured his second term in 1972.

After a long and bitter campaign in which much of Mr Trump’s rhetoric seems to have alienated as many groups of people as those he reached whose votes put him in power, many are now trying to anticipate what the reality of his administration would be.

Domestically, spending on infrastructure will play a significant role in boosting the US economy. Trump has made a big play on this policy, commenting: “We’re going to rebuild our infrastructure, which will become second to none. We will put millions of our people to work as we rebuild it.”

There is of course nothing revolutionary about this. China is financing over $720Bn on 303 transport infrastructure projects over the next three years.

As we know, Britain too is investing heavily in infrastructure with projects such as the Heathrow expansion, Hinkley Point and HS2. The UK’s construction industry is waiting to if the upcoming Autumn Statement will expand on this further.

In his victory speech, the President-elect said: “We have a great economic plan; we will double our growth and have the strongest economy anywhere in the world.”

So what will this pledge mean for the UK construction industry?

Following the Brexit vote, the outgoing president, Barak Obama, suggested that Britain would be “at the back of the queue” on any trade deals. Mrs Clinton said she would have taken a similar stance to that of President Obama.

Mr Trump, however, has been far more receptive to the idea of striking a trade deal with the UK once it leaves the European Union.

Back in May, he said: “Britain’s been a great ally. They’ve been such a great ally they’ve gone into things they shouldn’t have gone into, for example going into Iraq. With me, they’ll always be treated fantastically.

“I’m not going to say front of the queue but it wouldn’t make any difference to me whether they were in the EU or not. You would certainly not be back of the queue, that I can tell you.”

The UK currently exports more than £30Bn worth of goods and services to the United States and represents one of Britain’s most significant markets.

There is growing talk of the possibility that Britain could join USA, Canada and Mexico in new free trade area as an associate member of the North American Free Trade Area (NAFTA).

The president-elect was vocal in his criticisms of NAFTA during his campaign making it inevitable that the deal will be significantly reformed.

The man tipped to be the Secretary of State in the new Trump administration, Newt Gingrich, first put forward the idea of the UK joining such an agreement in 1998.

The idea was backed by Conservative MP, Jacob Rees-Mogg, who said: “What could be bad about it? As long as it does not stop us doing free trade deals with other people too.

“This is one of the great virtues of Brexit – we can look at all these things and if we think they are good we can tag along.”

Whether, the picture would be this rosy for Britain remains unclear. Undoubtedly, Trump policy is to put America first and he has been very critical of free trade.

Any deal with the UK would certainly depend on whether there would be any adverse effect on American employment. However, trump will not see Britain in the same way he views Mexico – a low wage threat to American employment.

This is clearly something that troubles the President-elect, given his pledge to build a wall on the border with Mexico to curb immigration.

Another advantage the UK is likely to have is that the American public would appear to be far more receptive to striking a trade deal with Britain , making the job of getting such a deal through Congress that much easier.

Trump’s seemingly close relationship to Nigel Farage, who for now remains acting leader of the UK Independence Party, might indicate a willingness to strike a favourable trade deal with UK once it eventually leaves the European Union.

There have been calls for Mr Farage to act an informal ambassador to the President-elect given his access to Trump’s inner circle.

Graham Brady, the Chairman of the influential backbench Tory 1922 committee, felt that the idea had merit and Mr Farage’s closeness to Mr Trump shouldn’t viewed as a negative thing.

Speaking to the University College London Conservative Society, Mr Brady commented: “Do I think it’s a bad thing if Nigel Farage is spending time in Washington encouraging them to be pro-British? No I don’t. I am quite relaxed about it.”

Mr Brady did, however, rule out the interim UKIP leader being given an official role.

He also suggested that Trump’s win was perhaps more in Britain’s favour than if Hilary Clinton had succeeded in becoming the first female president as his victory made easier trade negotiations more likely.

For some the idea of dealing with Donald Trump is distasteful but one thing that is certain is Britain must engage fully with the Trump administration if is secure and hopefully enhance its relationship with its biggest market.

The construction industry will hoping that the handwringing can be put to one side and the government get on with the task of securing the best deal possible.

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