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Trump’s Second Term: Implications for UK-France Trade and Business 

On 21 January 2025, the French Chamber of Commerce in Great Britain, in partnership with Signum Global Advisors, hosted an exclusive webinar to explore the implications of Donald Trump’s return to the White House. We extend our thanks to Signum Global Advisors for their collaboration, and to Lewis Lukens and Nico FitzRoy for their expert perspectives. This article summarises the key takeaways from the webinar and considers their impact on UK-France trade and business. 

As President Trump's second term gets underway, his administration is already making waves with a flurry of executive orders and policy shifts that will have profound global implications. From border security to economic deregulation, his administration appears determined to reshape the U.S. economy and its trade relations. For businesses operating across the UK, France, and the wider European market, this new reality requires careful navigation. 

A More Prepared Trump Administration 

Unlike his first term, where policy implementation was often chaotic, Trump enters his second term with a more structured plan. His immediate priorities include tightening immigration laws, removing environmental and consumer protections, and reshaping the federal bureaucracy. Notably, his administration has already overturned birthright citizenship (pending legal challenges) and launched mass deportations—moves that could impact labour markets in sectors dependent on migrant workers. 

Of particular concern to businesses is Trump’s energy policy. With an emphasis on “drill, baby, drill,” his administration is rapidly expanding domestic oil and gas drilling, rolling back environmental regulations, and reversing President Biden’s climate initiatives. This shift threatens global efforts to combat climate change and could undermine business confidence in cross-border clean energy investments. 

U.S. Trade Tensions Escalate: Canada and Mexico Push Back 

One of the most pressing concerns for European businesses is Trump’s approach to tariffs. Recently, his administration announced a 25% tariff on imports from Canada and Mexico, citing concerns over border security and drug trafficking. The move was met with immediate resistance from both countries.  

Canada retaliated by announcing 25% tariffs on U.S. goods, targeting key industries such as beverages, cosmetics, and paper products. Mexico also planned retaliatory measures. The Trump administration agreed to a 30-day pause on these tariffs while Canada and Mexico pledged to enhance border security cooperation.  

These developments offer a warning sign for the European Union: while Trump's initial focus has been on North America, a similar approach toward EU tariffs is increasingly likely. 

What This Means for EU and UK Tariffs  

The pushback from Canada and Mexico underscores a key dynamic in Trump's trade policy: while his administration is aggressive in imposing tariffs, it is also responsive to countermeasures. This has important implications for how the EU and the UK should prepare for potential tariff battles. 

Given Trump's stated desire to reduce the U.S. trade deficit with Europe, the EU remains a prime target for tariffs. Key sectors such as German autos, French wine, and Spanish agricultural exports could face punitive duties. If EU countermeasures escalate, companies operating across UK and EU supply chains may face additional trade frictions. 

However, the Canada-Mexico response suggests that swift retaliation can force Trump to reconsider. The EU will need to prepare a coordinated tariff strategy that balances economic pressure with diplomatic engagement. 

For the UK, the outlook is slightly different. Trump has signalled a more favourable approach to the UK, possibly due to its balanced trade relationship with the U.S. and his preference for bilateral deals over multilateral blocs. This could provide short-term breathing room, but businesses should not assume immunity from future trade disputes. 

The China Factor: A Tightrope for the UK 

One of the defining global trade issues of Trump’s second term will be U.S.-China relations. The UK is in a difficult position, as it has been moving toward closer economic ties with China while simultaneously facing pressure from Washington to take a harder stance. 

Trump is expected to demand that allies impose tariffs on Chinese goods, restrict market access for Chinese firms, and limit technological cooperation. The UK, unlike the EU, currently has no tariffs on Chinese electric vehicles (EVs) and biotech imports—a position that may soon become politically untenable. To avoid potential U.S. tariffs on British exports, the UK may be forced to introduce selective trade barriers against China. This will have direct implications for businesses operating in sectors like automotive, life sciences, and advanced manufacturing. 

UK-France Business Collaboration: A Time for Strategic Action 

Given these uncertainties, the need for a robust UK-France trade partnership has never been more important. The French Chamber has long advocated for strengthened business cooperation between the two countries, particularly in sectors such as energy, industrial strategy, and technology. 

• Energy Collaboration: With Trump dismantling U.S. climate policies, the UK and France have an opportunity to position themselves as global leaders in renewable energy. Cross-border projects in offshore wind, hydrogen, and energy interconnectors will be essential in maintaining momentum toward a low-carbon economy. 

• Technology & AI: Trump’s stance on de-regulating AI and technology could put European tech firms at a competitive disadvantage. The UK’s evolving AI strategy, which appears to be shifting away from the EU model toward a more flexible approach, presents both risks and opportunities. The Chamber’s Tech and Innovation Club will be essential in helping businesses navigate these shifts. 

• Industrial Strategy & Trade: With trade disputes looming, aligning UK-France industrial strategies will be critical in mitigating supply chain disruptions. The UK-France Business Forum will serve as a key platform for businesses to influence government policies, ensuring that Franco-British industries remain competitive in an uncertain global market. 

Trump’s presidency marks a turning point in global trade, energy policy, and transatlantic relations. The French Chamber remains committed to supporting members through this period of uncertainty, ensuring that businesses have the information, networks, and influence needed to adapt and thrive.