As the UK Prime Minister announces a snap General Election we look at the importance for UK trade and in particular trade with China. Recent opinion polls suggest a win for Theresa May and her Conservative party. So one may be forgiven for thinking nothing will change however when you look a little more closely there may well be changes ahead. The government are hoping for a large win increasing their majority and allowing them to force through their plans and results of negotiations without opposition.
The initial response of the markets was positive with a strengthening of the exchange rate of the pound – a concern for UK exporters. Europe also seems happy with the snap election which they believe will strengthen their hand in the negotiations. The overall result of the elections is extremely likely to be a conservative win and post election there will hopefully be a 5 year period of stable government. This will help cancel the uncertainty which ‘brexit’ brings which we believe will be a benefit to both importers and exporters alike.
We are still firmly of the belief that trade with China will increase dramatically over the next 3 years possibly as much as 30%. Business who ignore this do so at their peril and now is the time for businesses to review their import and export strategies if they want to steal an advantage over their competitors. Now is probably the best time in a generation to increase trade with China.