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 [...]

By |2025-02-11T08:59:37+00:0010 February 2025|Blog, International Trade, UK - Non EU|0 Comments

How much damage could Trump’s tariffs do and what can be done?

The short answer to the first part of the question is: “a lot” - and the damage is likely to be both globally and to the US itself. A longer answer is that, in many respects, we do not really know. This is because it is unclear why these US policies are being introduced, whether they may be reversed, and what other policies may be introduced or threatened both by the US as well as by other countries. The short answer to the second part of the question is “not much”. However, a the longer answer would be: it is horribly complicated with so many unknowns, but governments and businesses need to think long term, cooperate and be proactive as opposed to reactive. This is not easy. At present the policies being introduced against other countries largely amount to threatening to introduce or raise tariffs on goods. If we therefore focus on goods trade in 2023, the United States accounted for just under 14.5% of world imports, and just over 8% of world exports. This means that out of the total world demand for goods being exported, the US buys one-seventh of these and supplies roughly one-twelfth of world exports. [...]

By |2025-02-03T17:20:17+00:003 February 2025|Blog, International Trade|0 Comments

Trump’s tariffs: How much should we be concerned and why?

With President Donald Trump’s second term, the debate over the use of tariffs is making headlines. On his first day in office Trump once again raised the prospect of the strategic use of these tariffs: he threatened to impose them unless partner countries (Mexico, Canada or the EU) introduced changes in their trade policies or made concessions in other domains (China with TikTok). This approach is likely to have profound implications for both the US as well as on the global economy for three key reasons. First, it will impact the already strained multilateral trading system. Second, there are direct consequences of US tariffs on individual partner countries. Third, there is the question of how effective such actions will be for the US, and that will also depend on the extent of any retaliatory measures. The UK-U.S. Trade Relationship Trump has threatened to impose sweeping tariffs—ranging from 10% to 20% on all trading partners, and up to 60% on Chinese imports. These statements clearly cover a multitude of possibilities, and this generates considerable uncertainty. The UK government appears hopeful that as the US does not have a trade deficit with the UK, that the UK may not be targeted. However, [...]

By , |2025-02-03T17:18:22+00:0024 January 2025|Blog, International Trade|0 Comments
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