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UK and US agreed on A significant trading transaction Thursday – but the agreement seems far from tariffs.
The deal is the first made by the US since the president Donald Trump Last month, he presented his so -called mutual tariffs for the world.
The UK position as one of several countries where the US can boast the surplus of goods – that is, the US exports more to the UK than imported – they put the country in the front of the turn so that officials are beading agreement with the Trump administration.
However, even Britain, with its “special relations” from the US, failed to convince Trump to abandon all tariffs during trade negotiations.
According to the transaction, the UK can export 100,000 vehicles Each year, at 10% rate, with any additional vehicles facing 25%. British steel manufacturers and the aluminum industry will be able to export without tariffs, declining from 25%, which the US introduced in February.
However, all other goods imported in the United States from the UK will continue to be subject to 10% of the basic tariff, according to Trump, is the lowest tariff that will apply to trading partners.
Trump also suggested that the transaction would probably be a rarity because of the balanced trade relations of both countries and close political ties-this is unlikely any country will be without tariffs under its second administration.
Asked if the 10% basic tariff for the template for future trading transactions said, Trump said, “This is a low number.”
“They did a good job,” he added. “Some will be much higher because they have great surpluses.”
What does Wall -Stritit say?
Analysts have accepted this to the fact that tariffs of 10% are at least – this is the best deal that can reach other countries and trade blocks.
“The details of the US-UK transaction suggest that the base tariff by 10% of the United States is likely to remain in place for other trading partners with almost exception, but signals more flexibility than expected in the industry tariffs,” said Jan Hatus, chief economist and head of global investment research in Goldman Sachs.
US economist Jpmorgan, Abeel Reinhart, also noted that “the chances that this year could be retained a level that in most countries can be saved in most countries” in the client’s note.
Sector deals and influences on the US
Reinhart also noted that the incision of the UK, which secured in its car, steel and aluminum sectors, stated that the United States could be prepared to reduce the order-ale more narrow-part with other countries.
“This was a key point in recent trade discussions with Japan, given the importance of its bus station,” Reinhart added. “But it is also possible that the United States was more willing to conquer the UK in Auto, given that the UK accounts for only about 2.5% of car imports and spare parts. On the contrary, Japan is almost 12%.”
However, Rella Suskin, a shares analyst and a cargo expert in Morningstar, noted that the tariff reduction transaction by only 100,000 cars effectively limited the share of many largest auto makers in the UK, including Tata Motors-This Jaguar Land Rover.
Instead, it will benefit automakers such as Bmw According to Suskin, which imports some auto parts without tariffs and collect vehicles.
“The UK’s benefit restriction is able to export 100,000 cars annually to the US 10% tariff means that Jaguar cannot take any market share with the” preferred “tariff regarding European automakers,” Suskin said.
Andrew Hood, Head of International Trade at the European Law Firm Fieldfisher and former British Prime Minister David Cameron Prime Minister, said the transaction has made more to support “broader relations in the UK” than to help smooth out trade in the two countries.
“It is noteworthy that the deal is much more limited than most free trade agreements,” Hood said. “Most likely, the transaction is focused on supporting certain sectors, in particular the automotive industry, ethanol producers and aluminum manufacturers, where tariffs were significantly reduced or eliminated.”
As the residual 10% tariffs are damaged for the UK, others note that the transaction may also screw up the US economic growth.
“While the exceptions will break away from an effective tariff rate, the base line 10% does not go anywhere, the average tariff in the United States still remains in double -digit figures, which will give a large blow to real income in the United States, which will make growth sharply in the second half of the year,” said Michael Pierce, Deputy Chief American economist.
