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May, Trump in search of a trade deal
January 27, 2017, 5:58 pm

We can lead the world together, May said of the UK and US ahead of meeting US President Donald Trump in Washington on Friday [Xinhua]

When UK Prime Minister Theresa May met with US President Donald Trump today, both leaders will likely have considered how their economies are faring ahead of working out a trade deal in a post-Brexit world.

And the figures show that a trade deal would work well for both countries.

The US economy slowed to 1.6 per cent growth in 2016, with the fourth quarter registering only at 1.9 per cent, falling dramatically from the 3.5 per cent growth in the third quarter.

The Department of Commerce said that exports declined and therefore contributed to the slagging GDP growth.

However, the forecast for 2017 remains positive, as indicated by the Federal Reserve’s commitment to raise interest rates 2-3 times in the year.

The Fed has pointed to continued strong growth in consumer spending and confidence throughout 2016.

And there seems to be equal confidence in the markets; earlier this week, the Dow Jones pushed – and remained – above a record-setting 20,000 points.

US markets seem to have reacted positively to Trump’s suggested economic and trade policies.

In the UK, markets seem to have weathered the initial doom and gloom immediately after the Brexit referendum to the point where it is now the strongest performing economy among G7 countries.

The economy grew at 0.6 per cent in the fourth quarter, the rate holding steady for the third quarter consecutively.

Overall, the UK economy grew 2 per cent in 2016, slightly down from 2.2 per cent in 2015.

The drop in the pound against a basket of currencies since the referendum has helped boost both domestic and foreign demand for goods manufactured in UK factories.

Manufacturing accounts for 10 per cent of GDP in the UK.

But challenges remain on the table as the two leaders seek a trade deal. Trump has pursued protectionist policies, withdrawing from global trade promises such as the Trans-Pacific Partnership with 11 other leading economies.

Despite pushing for Brexit, May is very different as she seeks free trade agreements with many countries in the world, including within Europe.

Not to worry, May says, however. She has told her constituents that opposites attract, and is confident she can win a deal with Trump.

May needs a trade deal to dissuade naysayers back home who say Brexit was a colossal mistake.

On Thursday, ahead of meeting the US president, May stressed during a speech in Philadelphia the shared history and deep binding ties between the two countries.

“For I speak to you not just as Prime Minister of the United Kingdom, but as a fellow Conservative who believes in the same principles that underpin the agenda of your party. The value of liberty. The dignity of work. The principle of nationhood, family, economic prudence, patriotism – and putting power in the hands of the people,” she said, appealing to the foundations of Trump’s ‘Make America Great Again’ ethos.

The BRICS Post with inputs from Agencies

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