British companies have ramped up spending on new factories in the US, vindicating Donald Trump’s use of tariffs.
UK manufacturers’ investment in the US jumped 23pc last year and pharmaceutical firms doubled their spending, according to a study by consulting firm EY and the trade group British American Business.
Drinks giant Diageo, equipment maker JCB and drug producer GSK are among the British companies sinking hundreds of millions of pounds into new US facilities.
Mr Trump has imposed a 10pc tariff on goods imported from the UK, hoping to propel more manufacturers into setting up or expanding factories in the US.
Duncan Edwards, the chief executive of British American Business, said the data showed Mr Trump’s “America First” policy was working.
“The message of the tariffs has been that if you want to sell things to Americans, you need to make those things in America,” he said.
Although Britain has escaped with one of the lowest US tariff rates of any country, Mr Trump has repeatedly threatened to increase it.
Last week, he brandished the prospect of a 100pc tariff on countries that levy a digital services tax, which would include Britain.
Mr Trump has also offered to fast-track and facilitate investment from “specified allied and partner sources”, particularly in infrastructure, manufacturing, energy, technology and defence.
Mr Edwards said British companies were responding not just to these carrots and sticks, but also to the strength of the US economy, which expanded 2.7pc in the first quarter.
“Companies see the US as a massive opportunity, as a consumer market. Then on top of that, they have the added investment incentives and tariff disincentives, and that’s really made the decision a lot easier for chief executives and boards.”
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