Donald Trump's enthusiasm for a trade deal with the UK should be welcomed

For now, the best indicator of business confidence in Brexit is represented by the ever-sinking pound. Theresa May, by all accounts, is about to unleash a harder Brexit than anyone thought likely or even possible

Michael Gove met with President-elect Donald Trump to interview him for The Times

It is usually churlish, as Michael Gove pointed out on BBC Radio 4’s Today programme this morning, to look a gift horse in the mouth. So the news, procured by Mr Gove in an interview, that Donald Trump will look favourably on a trade treaty with Britain, and that he wants to conclude it speedily, should be welcomed. It is plainly better than being at the back of the queue, as his soon-to-be predecessor told us in the run-up to the referendum vote. Even so, this horse does merit some examination.

First, trade treaties are not entirely in the gift of the President of the United States. Constitutionally, such international agreements need to be ratified by the Senate, and that is a notoriously difficult process at the best of times. When the details of the deal become known, every line will be scrutinised by Senators keen to protect their own communities from too much foreign competition. There is nothing magical about, say, British motor cars that mean that they will have no impact on American auto workers when they are bought in preference to US-manufactured vehicles.

If Mr Trump wants to boost America’s pharma industry, why let British drugs in? It hardly needs pointing out that American farming interests have succeeded in building some of the most formidable walls around the agricultural sector. Notoriously dominated by pork-barrel politics, trade deals are lucky to escape alive from the US legislative machine. Mr Trump may be able to do little about that.

A traditional trade agreement, that reduces tariffs and non-tariff barriers (such as burdensome regulation) on imported goods may also be less use to Britain than first appears – maybe as little as 10 per cent of Britain’s GDP is now accounted for by making physical goods. Even the freest of arrangements will, thus, fail to make much of an impact on the UK economy more widely. It is services that drive the British economy, like the American one, and the scope for freer trade in these sectors is much less.

Financial services, for example, are widely regulated at the state level, and sensitivities around control of banks and investment institutions suggest that the scope for a City of London assault on the US is small. Free movement of people, as in the European single market, is also something that greatly boosts trade in services, as so many, such as architecture, medicine or law, are essentially people businesses.

It is doubtful that Mr Trump, who has made such a fetish of immigration, will propose an influx of Brits ready to undercut the wages of America’s professional classes.

For now, the best indicator of business confidence in Brexit is represented by the ever-sinking pound. Theresa May, by all accounts, is about to unleash a harder Brexit than anyone thought likely or even possible when the nation went to the polls in June. Remember those promises that German exporters would never allow a European Commission to kick the UK out of the single market? Now we find that the Prime Minister is willing to just stroll away from the biggest and wealthiest marketplace in the world. She will have to strike quite a deal with America, New Zealand and her other suitors if she is going to make up for that. Otherwise, she may find herself heading for the knackers yard along with the British economy.