What Professor David Miles Thinks About a Possible Tariff War
Professor David Miles from the Office for Budget Responsibility (OBR) took a moment to speak with MPs about the headline of the year: a limited tariff war that might hit the UK in a curious way. He was quick to admit that a big picture stay‑out strategy could have more upside than downside – if only by a measly margin.
Key Take‑aways from the Talk
- Only a very restricted trade dispute is on the table. He’s basically saying the US might point its arrows at China, Mexico and Canada.
- The UK would try to keep a safe distance – “stay out of the fight” – which would mean most of the world just keeps doing what it’s always done.
- Because the United States will throw tariffs at those countries, a slice of the goods that would otherwise head to the US may look for a new home.
- That new home could very well be the UK, potentially driving price cuts for some items that might otherwise be more expensive.
- Professor Miles is careful to say it’s a “mildly positive” scenario, but he’s blunt about any other situation where UK goods face tariffs – those are negative for a much longer term (up to five years).
What “Mildly Positive” Really Looks Like
Imagine the US rates a 25% tariff on imported steel and cars. That leaves a gap. China, Mexico, Canada are puzzle pieces that need to fill that empty spot. While we’re still in the UK, those goods can find a new, cheaper market here. For consumers, that could mean a happier wallet.
When the UK Faces the Worst
However, Professor Miles tossed a grim headline into the room: if the US suddenly slams a 20–25% tariff on UK goods for the next five years, the UK would lose a lot of the economic headroom that the government has penciled in. The result? A heavier tax burden, slower growth, and a lot of contested trade talks.
Bottom Line
In short, while a tiny, limited tariff war could shave a few pennies off a few products here, the risk is that any larger tariff fallout would do more harm than good for the UK. The professor urges lawmakers to keep the UK out of the melee, because the long‑term consequences can be a real economic headache.
