Sunak Becomes Prime Minister of the UK Amid Challenging Times

UK Prime Minister Rishi Sunak
UK Prime Minister Rishi Sunak

Rishi Sunak is officially the new Prime Minister of the United Kingdom today, prevailing in a fast-tracked Conservative Party leadership race after Liz Truss resigned from the position on October 20 after only 45 days in office. Today, Sunak met with King Charles and was formally appointed Prime Minister.

Prime Minister Rishi Sunak, the grandson of Indian immigrants, is the first person of color and first Hindu to lead the United Kingdom. At 42 years young, he is also the country’s youngest Prime Minister since 1812. Prime Minister Sunak most recently served as the Chancellor of the Exchequer from February 2020 to July 2022, where he saw the UK through the COVID-19 pandemic and is widely regarded as a pair of “safe fiscal hands.”

Prime Minister Sunak’s Early Career

Prime Minister Sunak is Oxford educated, earned his MBA at Stanford University as a Fulbright Scholar, and until recently was a U.S. green card holder. After graduating, Prime Minister Sunak worked as an investment banker until 2015 when he was elected to the UK’s House of Commons where he supported Brexit. Prime Minister Sunak has previously campaigned on fiscal conservatism, tight immigration restrictions, and support for confronting climate change. Prime Minister Sunak has also expressed support for helping Ukraine fight off Russian aggression.

Asians, who make up 7% of the population of the UK, are proud to see one of their own rise to the top position. Prime Minister Sunak’s ascendance coincidentally coincides with the beginning of Diwali celebrations. Diwali is one of India’s biggest holidays of the year, known as the festival of lights where light prevails over darkness, and good over evil.

Prime Minister Sunak now faces the challenge of uniting the Conservative Party and leading the United Kingdom amidst high inflation and a looming recession. His government is expected to face tough decisions as the British economy struggles and has yet to return to pre-pandemic levels.

US-United Kingdom Free Trade Agreement

The Trump Administration initiated the U.S.-UK Free Trade Agreement in October 2018 with negotiations that began in May 2020. However, when the Biden Administration took office, the agreement was shelved for a later date. In March of 2022, negotiations re-started as U.S. Trade Representative Katherine Tai met with UK. Secretary of State for International Trade Anne-Marie Trevelyan in Baltimore for a two-day event where the two trade representatives were able to reach a deal to end a four-year dispute on steel and aluminum tariffs.

The U.S. and UK do not currently have plans to continue negotiations, but the CalChamber is supportive of and hopeful that trade talks may continue in the near future.

U.S.-UK Trade & Investment Statistics

The United Kingdom, which is the sixth largest economy in the world, is an important trading partner for the U.S. and California. According to the U.S. Department of Commerce, the U.S.-UK investment relationship is the largest in the world, valued at over $1.375 trillion, creating over one million jobs in each country.

Two-way trade between the United States and the UK was $117.8 billion in 2021 and was the seventh largest importer of U.S. goods with a total value of $61.4 billion. Top exports to the UK were primary metal manufacturing, making up 16.3%, followed by chemicals, transportation equipment, and oil and gas. The U.S. imported $56.36 billion from the UK in 2021. Transportation equipment accounted for 21.2% of the total, followed by chemicals, non-electrical machinery, and reimports (U.S. Department of Commerce).

The United Kingdom is California’s 12th largest export destination, with more than $4.35 billion in exports in 2021, a decrease from $4.9 billion in 2020. Computer and electronic products brought in $1.09 billion followed by chemicals, transportation equipment, and second-hand merchandise accounting for $789 million, $364 million, and $346 million, respectively.

The UK was the fourth largest source of foreign direct investment (FDI) into the U.S. in 2021, totaling $565.24 billion, while U.S. FDI into the UK totaled $1.005 trillion. The UK also was the second largest source of FDI in California, with British foreign-owned enterprises contributing $9.363 billion in wages in California.

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