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Trade wars – no real winners

Trade wars – no real winners

Commenting on the issue of trade wars, David Slater, Director of Trade at KPMG

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Commenting on the issue of trade wars, David Slater, Director of Trade at KPMG said:

“UK businesses will be keeping a close eye on the impending trade war between America and Europe. Any escalation will have repercussions for British jobs and global economies.

“CEOs of some of the UK’s biggest companies have told us that the rise of protectionism and threat of trade wars are the greatest risks to future growth. Executives are especially nervous given the uncertainty around the U.K.’s post Brexit position in the global economy.

“The global nature of business means there are no long term winners in either a bilateral or multilateral trade war. The impact is that it simply makes the dynamics of taking sensible international business decisions more risky and new investments are put on hold. 

“Using tariffs as a political lever to try and bring nations into a negotiation about future trading relationships could easily backfire. Historically the EU does not respond well to this style of approach. And the longer there is uncertainty at political level the more business will postpone decisions.

“This development will force companies to put their existing business structure under the microscope, particularly their supply chain and customer base to get a handle on who is involved and where the risk of disruption can be mitigated. 

“The long term effects of a trade war can lead to a lack of competition, increasing costs for consumers and stifle innovation. This really could be a race to the bottom.”

 

ENDS

 

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Notes to Editors:

 

About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 14,500 partners and staff.  The UK firm recorded a revenue of £2.2 billion in the year ended 30 September 2017. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 154 countries and territories and has 200,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

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