Sir Christopher Meyer, who served as the Ambassador to the United States from 1997-2003, highlighted the UK has the upper hand over the EU in trade discussions going forward. Tweeting about the issue, he said: “Missing from so much analysis by Brussels ‘insiders’ is awareness that the EU’s £94billion trade surplus with the UK gives us a massive lever. “Brussels’ blood-curdling noises today are a sure sign of the jitters.
“Why, in 2021, the EU could be hit by tariffs from both the US and the UK.”The prospect has excited Brexiteers, who are keen to demonstrate Britain’s potential for trade success.
Politicians who support the Leave argument, such as Jacob Rees-Mogg, have frequently stated that Britain has a large trade deficit with the European Union.
This means that the EU exports more to Britain than Britain sells to the European Union.
Sir Christopher Meyer stated that Brussels have 'the jitters' (Image: Getty)
It was this concept which gave rise to the “they need us more than we need them” argument, which frequently arose during the Brexit referendum in 2016.
According to the House of Commons, the UK had an overall trade deficit of minus £66billion with the European Union in 2018.
A surplus of £28billion on trade in services was outweighed by a deficit of minus £94billion in goods.
Sir Christopher’s suggestion that the EU could face tariffs from the US and the UK in the future has already appeared to materialise.
There has been significant tension between France’s president Emmanuel Macron, and US president Donald Trump over a proposed digital tax which France were looking to impose upon American digital giants.
Mr Trump threatened harsh retaliatory taxes of up to 100 percent on French goods such as Roquefort cheese, handbags and champagne if Mr Macron went ahead with his plans.
The trade cold war left world leaders on tenterhooks, as the future of trade between the European Union and the US was left hanging in the balance.
French finance minister Bruno Le Maire threatened to trigger an all-out trade war with the United States if Mr Trump did not withdraw.
In a letter written to US trade representative Robert Lighthizer, Mr Le Maire stated: “If the US were to decide to impose trade sanctions against the EU over the French digital services tax, it would deeply and durably damage the transatlantic relationship at a time when we need to stand united.”
Regarding Brexit trade discussions, significant economic consequences could fall upon the EU if the bloc fails to strike a deal with the UK.
A no deal Brexit could see the European Union and Britain trading based on rules laid out by the World Trade Organisation.
As a result, a substantial portion of the £94billion trade surplus figure mentioned by Sir Meyer, could be put at risk.
The so-called transition period of Britain leaving the European Union is due to expire at the end of 2020.
If a suitable compromise is not reached by both sides, Mr Johnson is expected to walk away from trade negotiations in their entirety.
Alternatively, some circles have suggested that a transition period could be extended in order to avoid an all out trade battle.
In the meantime, Britain is set to sit down to the table with the United States to thrash out a post-Brexit trade deal.
