BAB Report Shows Opportunities and Challenges of US Trade for SMEs

A report produced by US-UK trade association BritishAmerican Business (BAB) highlights opportunities to help small businesses across the UK overcome barriers to transatlantic trade and growth.

In partnership with DIT, BAB hosted four virtual round tables earlier this year, bringing together leaders from over 60 small and medium enterprises (SMEs) across London and the South of England, the Midlands, the North of England and Scotland, to hear their success stories and help address the challenges they face.

The resulting report, entitled 'Making a Difference', reveals three priority areas where the government can work with SMEs to encourage greater transatlantic trade and investment:

• Lower barriers to trade and investment by aligning standards and regulations.
• Resolve trade disputes and enable easier business travel across the Atlantic.
• Boost on-the-ground, practical support to businesses, such as sourcing trusted suppliers or navigating complex tax requirements.

SMEs are the backbone of the UK economy, making up 99% of all businesses, generating £2.2 trillion of income and employing 16.6 million people, but as the report shows they are often hit hardest by red tape and high operating costs.

For example, Stoke-on-Trent-based ceramics manufacturer Steelite International currently faces 25.5% tariffs on its US exports, despite facing little domestic competition in the US, and London data analytics firm TradingHub revealed completing tax registration was excessively complex, time-consuming and expensive, especially when operating in more than one US state.

SMEs are advised to access DIT's system of support: a network of around 300 International Trade Advisors; a £38m Internationalisation Fund set up in December 2020 to help 7,600 SMEs in England grow their overseas trading; and a UK Export Finance network which provides specialist support on trade and export finance.

While a US/UK trade agreement is not expected to be finalised soon, the countries have made progress, having concluded five rounds of negotiations and agreed a "significant proportion" of the legal text across multiple chapters of the trade agreement. Both sides have now reached broad agreement on a small and medium-sized enterprise (SME) chapter, which aims to boost transparency, making it easier for SMEs to trade by establishing new measures on information sharing.

There are opportunities for smaller businesses in the United States. While 230,000 SMEs export goods and services globally, only 13% currently export to the US.

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