UK and US eye trade deal but it’s too early to talk immigration and tariffs: analyst

Containers are unloaded from the Eimskip ship Bruarfoss in Portland, Maine.
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President Donald Trump and U.K. Prime Minister Theresa May are meeting this Friday in Washington to discuss future trade opportunities.

However, analysts believe that the meeting is more about prioritizing relationships rather than discussing detail.

Theresa May has told U.K. media that both sides of the Atlantic could look at current obstacles to their trade and remove those barriers. According to the Telegraph, one of the things that the U.K. government wants to discuss is how to make it easier for U.S. workers to move to the U.K. and vice-versa.

"At the meeting, the two leaders may identify areas in which the U.K. and U.S. already have close trade ties, such as in manufactured goods and chemicals, and express a desire to maintain and perhaps deepen these ties,"

Danielle Haralambous, U.K. analyst at The Economist Intelligence Unit, told CNBC via email.

"However, they can do little more than hold an informal discussion at this stage and nothing concrete on tariffs or immigration can or will be agreed," she added.

This is mostly due to the fact that the British government will be busy with exit and trade talks with the EU. But it will also be linked with how protectionist Trump gets.

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Different economists have drawn attention to the fact that the U.K. has a trade surplus with the U.S. – its largest single-country trading partner. This means that the U.K. is selling more than what it buys from the U.S.

"By Trump's own logic, that the U.K, sells more than it buys from the US should put the UK in the basket of countries currently "stealing a living" from the US like China, Mexico and Germany," Kallum Pickering, senior U.K. economist at Berenberg, told CNBC.

Nonetheless, analysts doubt that a U.K. - U.S. trade deal would completely offset the losses from leaving the EU's single market.

"It's difficult to say anything about the politics of such a deal," Fredrik Erixon, director of European Centre for International Political Economy, told CNBC on Monday.

"What is clearer, however, is that a deal with the UK won't be able substitute trade losses from a hard Brexit. The likely losses for the UK would be substantial and bilateral free trade agreements simply don't have the capacity to generate that much new trade," Erixon added.

Haralambous from the Economist Intelligence Unit added: "The US is the UK's largest single-country trading partner, and the destination for about 15% of its exports. Expanding this share may help to compensate for a likely decline in the UK's exports to the EU's single market, currently the destination for almost 50% of the UK's exports."