Will Trump’s tariff policy correct an unusual imbalance?
One of the quirks of tariff regimes is that EU and UK light vehicle exports to the US face just a 2.5% tariff whereas those coming the other way face a 10% charge on a vehicle's declared landed value[1]. It seems surprising that this difference has continued for as long as it has, but it probably won’t last much longer. President Trump has been threatening allies and enemies alike with tariffs but – as in Canada and Mexico – he has postponed them following political, or rather quasi-military concessions. It would not been entirely surprising if these threatened tariffs were not actually implemented. While with Trump it is unwise to be too definitive with predictions, in this fast-changing environment steel and aluminium-specific tariffs now appear likely. Attention now shifts to the EU and the UK. The former has long been in the President’s sights, and the latter potentially is, too, although Trump has hinted he could give the UK better treatment than the EU. The promise of a second state visit and a ride down the Mall in a gilded cage or carriage, may have some economic benefits after all. Significantly, before President Trump has “decided” on his tariff policy [...]
