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ING Groep: Why the UK-US trade agreement will not signal a broader reduction in tariffs?
President Trump revealed that the United Kingdom is the first country to receive exemptions from some (but not all key) tariffs he introduced in recent months. On the surface, the United Kingdom seems to be doing quite well. At least, that's the case compared to reports circulating in recent days. According to a UK news release, tariffs on UK Steel and Aluminum will be reduced to zero, with no mention of quotas. Although UK Autos exports are subject to a quota limit of 0.1 million units, this essentially means that UK Autos exports (which constitute the vast majority of products exported in 2024) will face a 10% tariff instead of 27.5% (originally 2.5%, plus an additional charge by Trump).
Economists have welcomed the US-UK agreement, stating that its symbolic significance outweighs its substantive content.
Economists welcomed the trade agreement reached between the Trump administration and the United Kingdom on Thursday, stating that it represents Bullish Signals of flexibility from the USA on trade issues, and both sides can view it as a victory. However, the UK's role in US trade is relatively small, and under the agreement, the 10% tariff on UK Commodities will continue to be implemented. Paul Ashworth, an economist at Capital Economics, stated that the details released on Thursday were vague, "and additionally, as trade talks with China are also set to occur this weekend, there is a rush to showcase achievements in the 'agreement' before tariffs affect GDP growth and inflation."
ING Groep: Our latest views on major central banks.
Central banks around the world are waiting to assess the comprehensive impact of Trump's tariff policy before taking any significant action. Here are the latest views of ING Groep Analysts on the central banks. The Federal Reserve. President Trump wants the Federal Reserve to cut interest rates, but these requests have been ignored by officials, who are trying to assess the impact of his trade policy on inflation given the persistently strong labor market. Higher tariffs seem to push up prices, while port operators and Logistics companies warn of potential supply shortages that could amplify recent inflation threats. Therefore, the Federal Reserve is in a 'wait-and-see' mode, with Chairman Powell warning.
ING Groep at JPMorgan
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