10% tariffs are here to stay

Great Britain and the USA approved a pioneering trade agreement on Thursday – however, the agreement seems to be far from being free.

The deal is the first of the United States since President Donald Trump introduced his so -called mutual tariffs in countries around the world last month.

The position of the United Kingdom as one of a handful of countries in which the United States have a trade surplus in goods -which means that the United States exports more to Great Britain than imported -put the country into the queue so that civil servants can convey an agreement with the Trump government.

But even Great Britain with his “special relationship” with the USA could not persuade Trump to fall all the tariffs during the trade talks.

As part of the deal, Great Britain can export 100,000 vehicles with 10% price each year, with additional vehicles being exposed to 25% tasks. British steel manufacturers and the aluminum industry will be able to export the freedom of reinforcement compared to the 25% interest rate that the United States imposed in February.

However, all other other goods imported by Great Britain from Great Britain are still exposed to a 10% basic tariff, according to Trump, the lowest country-specific tariff is used for trading partners.

Trump also suggested that the deal should be rare due to the balanced trade relationship between the two countries and close political ties, what is unlikely that a country under its second administration will be zariff-free.

When asked whether the 10% basic tariff is a template for future trade agreements, Trump said: “This is a low number.”

“You did a lot,” he added. “Some will be much higher because they have massive trade surpluses.”

Analysts assumed this to mean that tariffs of 10% are at least the best deal that other countries and merchant blocks could reach.

“The details of the US AK deal suggest that the 10% base tariff will probably exist for other trading partners with practically no exceptions, but more flexibility than expected in sectoral tariffs,” said Jan Hatzius, chief economist and head of global investment research at Goldman Sachs.

The US economist from JPmorgan, ABISE Reinhart, also found that “the chances that at least 10% rate in most countries could be maintained in most countries in most countries” in a note to customers.

However, Reinhart pointed out that the carvers from the United Kingdom for the car, steel and aluminum sector pointed out that the United States is willing to cut tailor-made-and-only.

“This was an important point in the recent trade discussions with Japan in view of the importance of his car sector,” added Reinhart. “But it is also possible that the United States was more willing to make concessions with Great Britain, since in Great Britain only about 2.5% of US imports of vehicles and parts are. In contrast, Japan is almost 12%.”

Rella Suskin, stock analyst and car expert at Morningstar Tata MotorsJaguar Land Rover.

Instead, car manufacturers such as BMW This imports some auto-parts-talent-free and assemble vehicles in the USA, says Suskin.

“The restriction of the United Kingdom's advantage of exporting 100,000 cars annually with a tariff of 10% to the USA means that Jaguar cannot take over a market share of a” preferred “tariff compared to European car manufacturers,” said Suskin.

Andrew Hood, head of the international trade in the European law firm Fieldfisher and former advisor to the British Prime Minister David Cameron, said that the deal has more contributed to supporting “the broader relationship between Great Britain and the USA” than supporting the smooth trade between the two countries.

“It is remarkable that business is far more limited than most free trade agreements,” said Hood. “Rather, the deal focuses on the support of certain sectors, in particular on the automotive industry, the ethanol manufacturers as well as the manufacturers of steel and aluminum, in which tariffs were significantly reduced or removed.”

Since the damage to the remaining 10% of tariffs could be for Great Britain, others indicate that the deal could also affect the economic growth of US economic growth.

“While exceptions with the effective tariff quota stay, the Baseline is not going 10% anywhere, the average US tariff will remain in a double -digit place, which will slow down a large income in the USA in the second half of the year,” said Michael Pearce, deputy US Economist in Oxford Economics in Oxford Economics.