Almost half of small British businesses would prefer to trade with the U.S. than other major international markets if blocked off from the European Union after Brexit, according to a new report.
The findings from Britain's Federation of Small Businesses released Tuesday highlight the importance of establishing a new trade deal between the U.K. and the U.S., as 49 percent of small business owners say they would look first to business opportunities across the pond if they are unable to retain a free trade relationship with the EU once the country leaves the EU.
The U.S. ranks ahead of Australia (29 percent), China (28 percent) and Canada (23 percent), according to an online survey of over 1,750 small business owners, giving support to Prime Minister Theresa's May's plans to establish a new trade agreement with the U.S.
During a trip to meet U.S. President Donald Trump in January, May outlined her hopes to "lay the groundwork for U.K.-US trade agreement and identify the practical steps we can take now in order to enable companies in both countries to trade and do business with one another more easily."
Last month, a study from the British Chamber of Commerce found that 25 percent of U.K. firms plan to increase their export resources to the U.S. in the next five years, making it the most preferred of all non-EU markets.
Despite this, continued membership of the EU's single market remains the greatest priority on the wish lists of 63 percent of small UK's businesses, the FSB report suggests, mounting further pressure on May to secure the U.K.'s trading future with the EU.
Over half (58 percent) of smaller U.K. firms say they find the EU easier to trade with than non-EU markets under current arrangements, while nearly half (45 percent) and over half (53 percent) of importers find it cheaper.
However, one in four (27 percent) of exporting firms claim they would be deterred from trading with the EU if any tariffs are imposed while one third say they would be put off by tariffs of 2 percent or more.
"Small firms trade with countries based on ease, cost and value and any future trade deal must deliver on these key aspects both with the EU single market and non-EU markets," commented Mike Cherry, FSB National Chairman.
"Compared to larger companies, small businesses typically work to tighter margins with limited resources, meaning changes to the trading landscape will hit them disproportionately hard. We call on the Government to ensure that a sensible phased implementation arrangement is put in place to avoid a cliff edge, once we have left the EU."
Britain's Department for Exiting the EU announced Monday that it will ensure that Britain remains "the best place in Europe to run and grow a business of any size".