Kavan Choksi Highlights the Trade Relationship Between the UK and US
The United States and the United Kingdom are the first and fifth largest economies in the world respectively. Mutual investment and trade have been at the heart of the prosperity of these nations, and their free market values play an important role in helping these economies to thrive. A top finance expert, Kavan Choksi, points out that the UK and the US trade over $260 billion worth of goods and services each year. In fact, they are each other’s number one source of foreign direct investment, as well as two-way direct investment that totals over $1 trillion.
Kavan Choksi briefly sheds light on the bilateral economic relations between the UK and US
It is important to note that despite many uncertainties and challenges cropping up due to the exit of the UK from the European Union, the COVID-19 pandemic, and high inflation due to increasing energy prices, the country remains a vital market for American exports of goods and services. The exports of goods and services from United States to the United Kingdom reached $129.3 billion in 2021, which was about 7.6 percent higher from 2020. The UK ranks at seventh place among export destinations for American goods, and in the very number one spot when it comes to trading in services.
The key categories of exports from the United States to the United Kingdom include medical equipment, consumer goods, financial and professional services, industrial supplies, travel and tourism, agricultural products, and smart grids. Prior to the Covid-19 pandemic, the United Kingdom ranked third in the overall number of travelers arriving in the United States, just behind Canada and Mexico. This made the UK the number one overseas market for travel to the United States, with around four to five million UK travelers visiting the United States each year. These travelers essentially contributed more than $12 billion to the American economy on an annual basis. Even though 2020 and 2021 did witness a huge decline in tourism in both UK and the US due to the Covid-19 related travel restrictions, as these restrictions were lifted in June 2022, travel in both the directions have has rebounded.
The United States-United Kingdom investment relationship is the largest in the planet, as per Kavan Choksi. It includes cumulative bilateral stock in a direct investment that was valued at more than $1.5 trillion in 2021. The US direct investment position in the United Kingdom topped $1 trillion in 2021, by having a 9.5% increase from 2020. The direct investment position from the United Kingdom to the United States was $512.4 billion in 2021, witnessing an increase of 21.5% from 2020. Additionally, beyond 2.6 million jobs are directly supported by these investments, 1.46 in the United Kingdom and 1.17 million in the United States. Almost every state of the United States has jobs that are connected to an investment by a UK company. More than 2500 US companies additionally have a presence in the United Kingdom, as it is the key location in Europe for US regional headquarters for covering Europe, the Middle East, and Africa.