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Economists say Donald Trump’s preferential treatment for UK exports gives the country’s businesses a competitive advantage and can protect the economy from the worst effects of the Washington trade war.
Trump has imposed 10% tariffs on all imported British goods (lowest interest rates), part of his “liberation day” tariffs on U.S. trading partners, a move that collapsed the market and threatened to disrupt the entire global trading system.
But experts say the UK is one of the most advantageous people, as lower tariffs give manufacturers a competitive advantage, and the government is reaching a deal with the United States to further reduce the benefits of taxes.
David Waine, managing director of Conmech, a professional steel engineer in northwest England, told BBC Radio on Thursday that “for many industries, this will be worrying because we bring opportunities ourselves” as Conmech’s products are now cheaper than Expereas competitors.
“In fact, we should be more competitive in the U.S. market than we have been in years,” he said. Trump wants to build a domestic U.S. industry, but it will take some time, and the U.S. still needs imports.
The government is talking with the United States about targeted trade agreements to lower the benchmark interest rate by 10% or reduce the 25% tariff on British steel to 10%. Options on the table include the imposition of US agriculture, the removal of digital service tax on US technology companies, and the agreement to new regulations surrounding technology.
Alan Winters, a trade expert and professor emeritus at the University of Sussex, said the direct impact of tariffs on the UK is small. “If someone is harder to hit your competitor than you break into your competitor, you get a competitive edge,” he said. “If we get a trade deal with the United States, we can even get a profit.”
Sussex’s Inclusive Trade Policy Center estimated “the moderate loss in the UK” to be 0.1%-0.3%, respectively GDP, in a paper on Friday. If the UK can reach an agreement with the US, the economy will have a “positive gain of 0.1%. The paper adds that the United States will “experience more pain than any other country” according to its own measures.
Mats Persson, head of macro strategy at EY Parthenon, said the UK has “one of the best opportunities to reach an agreement with the deal”, which could reduce tariffs on British goods. “In the short term, there is too much uncertainty, but you can see the work that could eventually fall off to make Britain more competitive.”
“Potentially beneficial”
The UK’s 10% tax makes it the world’s largest commodity exporter to obtain baseline tariffs. China faces 34% tariffs and has retaliated. 20% of EU countries have suffered severe blows. Mexico and Canada were excluded because separate arrangements had been arranged.
Trump told reporters on Thursday that he believed Steamer was “very happy with how we treat them with tariffs.”
Raoul Ruparel, director of the Boston Consulting Group Growth Centre, acknowledged that immediate impact would cause damage, but the relative effect of priority responsibilities is “potentially beneficial and may have some positive impact on the UK, especially when other countries retaliate and there is no retaliation.”
Ruparel added that trade shifts to goods from the UK, which could lower prices and allow the Bank of England to lower interest rates faster. “Currently, tariffs look higher than the UK’s inflation rate, which helps living standards and borrowing costs,” he said. “This is not bad for the UK economy.”
The market responded to Trump’s tariffs, predicting that BOE will lower interest rates three times this year, which had been expected twice before.
The IMF warns of “significant risks” to the world economy, and Bloomberg Economics estimates that the direct impact of tariffs on UK exports could cost up to 0.4% of GDP.
Person said “some UK businesses and the UK itself have potential upside potential in the medium term”, but warned that any potential gains from the global depression could be shocked due to trade shocks or ongoing uncertainty.
This article was generated from the Automation News Agency feed without the text being modified.
