Trump will announce a “large trade agreement” with Great Britain on Thursday

Cnn
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President Donald Trump teased an important trade display that was announced on Thursday. A source familiar with the government's plans shows CNN that the deal will take place with the United Kingdom.

It is another sign of a possible relief of historically high tariffs that have threatened serious damage in the United States and the global economies.

“Big press conference tomorrow morning at 10:00 a.m., the Oval Office, about a large trade agreement with representatives of a large and highly respected country. The first of many !!!” Trump was looking for truth society on Wednesday evening.

In his post, Trump did not state which country, but his government has proposed that it is in active negotiations with India, Great Britain, South Korea and Japan. Peter Navarro, the best trade advisor from Trump, announced on Tuesday that he suspected that Great Britain could be the first country to sign a trade agreement with the United States.

“I do not know whether it will be in Great Britain or India first – we have a small turn in history in India so that things could slow down down there, but I can assure the American people that there will be business and they will give very good offers for the American people,” said Navarro.

The Financial Times reported on Tuesday that a trade agreement in Great Britain could be signed this week and that the United States could be exempt from some non-tariff trade barriers, including the 2% digital service tax in the USA that is collected to US technology companies. In return, the United States can facilitate the collective bargaining burden in Great Britain and may reduce or evaluate the country of 25% tariffs for aluminum, steel and cars, reported the FT.

For weeks, Trump officers have said that they are talking to more than a dozen countries and approaching a deal, but so far nobody has been announced. Trump has often said that he has no hurry to sign a deal, and claims that the federal states have been “tearing down” America for years, and the high tariffs that the United States have imposed will help to compensate for trading.

Despite the administration's rhetoric that it lies in advanced trade negotiations with more than a dozen countries, actual trade agreements, often years, need a lot of time to endure. As a rule, they include incredibly complex agreements that deal with the minutia of different goods and non-tariff obstacles. They often contain considerable political considerations because different parties try to protect voters with special interests.

Instead, the “deal” that teased Trump is more of a memorandum of understanding. This can lead to lower tariffs for the goods of a certain country at short notice, but they will do little, which corresponds to a considerable economic victory for some time.

And that's just one agreement. The “mutual” tariffs that came into force on April 7 and were 90 days during the break for 90 days affects dozens of countries. About a hundred more are subject to the 10% universal tariff. The administration may not be able to do this by July 8th.

“The 90-day break, which is now around 25%, delivers little time for the typical back and forth business discussions that have not been necessary for years to create a trade agreement,” said Jacob Jensen, Analyst for the American Action Forum, an institute for the Center-Rights Policy.

“There is a significant difference whether these businesses are official, written trade agreements and not oral obligations to buy more US products, since there is a long-term economic impact and the other can be ignored in the whole,” he added.

Trump said last month that he would not extend the tariffs a second time – and in fact, it could act earlier to reintroduce some tariffs with countries with which his administration cannot reach an agreement in a few weeks.

“For the US trade representative, it will be difficult to negotiate 100 separate trade agreements within 90 days, which means that President Trump will soon have to determine whether the tariffs will be restored or delayed,” said Jensen.

And even if the business is ultimately completed with all countries, there is no guarantee that Trump would keep it. For example, Trump was instrumental in the negotiation of the USMCA free trade agreement with Canada and Mexico in his second term in order to give it up in his second term and to write down a tariff with a tariff of 25% to some Mexican and Canadian goods. And by entering significant tariffs to practically all of them to the USA, Trump has also blown up a number of existing trade agreements with allies.

Trump's announcement of a trade agreement is the second significant sign this week that the administration may be open to negotiations that would ultimately reduce some tariffs for foreign nations.

On Tuesday, the finance minister Scott Bessent said that he and the US sales representative Jamieson Greer both to Geneva, Switzerland, will travel where they will meet their Chinese colleagues.

Although Bessent Fox News said that he should not expect a large trade agreement from the meetings, he admitted that it was an important step in the negotiations and could reduce the tensions that the United States prompted to place at least 145% tariff for most Chinese goods. China has again set a 125% tariff on US goods.

However, Trump said on Wednesday that he would not reduce the high tariffs in China before the discussions, which was a prerequisite for discussions beforehand.

When asked in the Oval Office, whether he was open to withdraw the historically high tariffs to bring China to the negotiating table, Trump simply replied: “No.”

Nevertheless, thawing in the trade war could be a welcome sign for companies and consumers in both countries and all over the world.

The economies have already damaged the punishing tariffs around the world – especially the Americas. The US economy went in stock in the first quarter, the first contraction of which has been in stock as a company, in anticipation of the “liberation day” tariffs started in the second quarter.

Although the China-US-trade patient situation is by far the most aggressive, Trump has also imposed large tariffs to most other countries around the world: a universal tariff of 10% for practically all goods penetrating as well as 25% tariffs for steel, aluminum, car parts and some goods from Mexico and Canada.

So the world will watch the announcement on Thursday and the US China talks this weekend with anticipation.

The chairman of the Federal Reserve, Jerome Powell, said on Wednesday at a press conference that the tariffs of the American economy could cause serious damage. However, he said that the trade talks that the United States organize with abroad could prevent the worst-case scenario.

Global economists from the International Monetary Fund, OECD and the World Bank, have all predicted that Trump's trade war would have catastrophic effects on the global economy, which dramatically slows down growth in some countries and at the same time inflamed inflation. Many US economists and large banks predict that the United States could enter into a recession this year.

This story has been updated with additional developments and context.