“Tomorrow at 10 am there will be a big press conference at the White House Oval Office about striking a big trade deal with a respected representative of a big country. This is the first of many agreements.” President Donald Trump made the announcement on social media. He did not say who the“Respected power” was, but the New York Times and other media subsequently reported that Donald Trump was referring to the UK, which was later confirmed by the British government. Donald Trump and Stamer, the British Prime Minister, held press conferences in the US and the UK at about the same time yesterday to unveil the details of the deal. While the US President has trumpeted the deal as a potential relief for some UK industries, it is a far cry from what we traditionally think of as a trade deal, according to the BBC.
President Donald Trump and administration officials held a press conference at the White House Tuesday morning to announce major trade deals with Britain. (AFP)
“British officials were surprised.”
“Today is a very important and exciting day for the United States and the United Kingdom,” Donald Trump wrote on social media early on Monday, the British government declined to comment on Donald Trump’s claims. CNN (CNN) — Donald Trump’s announcement came as a surprise to some British officials, who said negotiations between the two sides had been productive in recent weeks but did not indicate a deal was imminent.
Britain is one of the least affected countries in the US tariff war. Donald Trump imposed so-called“Reciprocal tariffs” on imports from dozens of countries around the world on April 2, but was forced to suspend them for 90 days while retaining a so-called“Benchmark tariff” of 10 per cent. According to the New York Times, Britain was not subject to“Reciprocal tariffs” from the United States in the first place, because Britain imports more from the United States than it exports to the United States, but it has not been exempted from Donald Trump’s 25 per cent tariffs on foreign steel, aluminium and cars, which British officials have been pressing the US to remove.
Currently, the United States imposes a hefty 25 percent tariff on British Steel, aluminum and auto products, with a benchmark tariff of 10 percent generally applied to other goods, the BBC reported. Since cars are the core of UK exports to the US, worth about £ 9bn last year, the 25 per cent car tariff hits UK car companies particularly hard. The Jaguar Land Rover sold 100,000 vehicles in the US last year but halted exports last month.
In return for concessions from the US, the UK plans to scrap or reduce the digital services tax on multinational technology companies, which generates about # 800m a year for the government, according to the Financial Times. Donald Trump stressed at a press conference on the 8th that American agricultural, machinery and other products will have better access to the British market. In response to car tariffs, the United States Department of Commerce’s top concern, Lutnick said the UK would be able to export 100,000 cars to the US at a benchmark rate of 10 per cent.
The two countries did not sign the 8th entity document. Donald Trump said the final details of the us-uk Deal had yet to be written. Stamer said the details of a deal still needed to be“Worked out”. In other words, things can still change, and no deal is ever fully done.
“It’s a deal, not a treaty.”
In contrast to the fanfare, the British media, markets and authorities were cautious from the start. British Sky News said the announcement is around the so-called general terms of the agreement, which with the United Kingdom and India signed a free trade agreement is completely different. The story was accompanied by a photograph of a 10 Downing Street cat yawning with the caption: ‘ I’ll go back to sleep then. ‘
The BBC said Jonathan Haskell, a former member of the Bank of England’s monetary policy committee, said people should not expect too much, for Donald Trump said“Trade deal”, not“Trade agreement”. “There is a big difference between a trade agreement and a trade agreement,” Haskell said. “Trade agreements are limited, short-term and partial, covering only a few items. Trade agreements are broad and long-term.”
The BBC’s analysis suggests that the US tariff deal could significantly ease the pressure on the UK car industry, but will not significantly improve the outlook for UK economic growth. These industries account for less than a third of UK exports to the US and together account for less than 1 per cent of UK GDP. The benchmark us tariff of 10 per cent on most UK goods will remain unchanged. The tariff deal with the US is likely to be less important than the 0.1 per cent boost to UK GDP that the uk-india Free Trade Agreement agreed earlier this week is likely to bring, the report said. Still, a detente with the United States would be hugely symbolic of Britain’s role in the new global trading mess.
One third of the 90th day has passed
The White House is currently in talks with major trading partners on so-called“Reciprocal tariffs”, but Donald Trump and his economic and Trade Lianhe Zaobao have mixed messages about the progress of the talks, the FT said yesterday. The White House is in talks with 17 major trading partners and is expected to announce agreements with some of them as early as this week, US Treasury Secretary Robert Bessant told Congress Wednesday.
CNN cited Donald Trump’s trade deal as the second important sign this week that the administration could be open to eventually lowering tariffs. In the first significant sign, the US Treasury Secretary and US Trade Representative will travel to Geneva, Switzerland, to meet Chinese trade officials.
The U.S. government announced on April 9 that it would suspend“Reciprocal tariffs” on most countries for 90 days to allow time for negotiations, nearly a third of the way through. CNN said the U. S. Government will not be able to complete all negotiations by July 8. “The White House doesn’t have time for typical trade negotiations, which can take months or even years to reach a deal,” said Jacob Andrew Johnson, a trade policy analyst at the Forum for American action, although the administration claims to be in trade negotiations with more than a dozen countries, real trade agreements take a lot of time to negotiate, and they often involve extremely complex elements, delving into the details of goods and Non-tariff barriers to trade also involves political considerations, as all sides need to protect voters with special interests. Instead, the“Deal” touted by Trump is more like a memorandum of understanding, with limited results.