Donald Trump announced that it would punish import tariffs in Canada, Mexico, and China, and then threatened to target the EU, but the UK is “outside the column”, but there is still a possibility of reaching a contract. He warns that there is. On Monday, Trump announced a one -month pause after a conversation with Mexico’s counter part, Claudia Symbaum and Canadian Prime Minister Justin Toldo. However, many uncertainty remains.
The following five charts are outlined in the EU and the British crisis.
Trump targets a large -scale product deficit with the EU
The United States is the world’s largest product importer and purchased a product worth $ 30 (£ 2.4 tn) in 2023. Also, if imports are exceeding exports, the deficit will trade the largest trade.
Trump has long been fraudulent as a sign of “unfair” trade practices used by US trading partners for a long time, and after decades, has changed overseas. It is considered a sign of the weak US economy.
The biggest trade in the deficit with a single country is the trade with China, which is worth $ 279 billion in 2023. Following this, the EU was $ 28 billion. However, in consideration of service trade, the deficit with the EU decreases significantly because there are a large number of foreign services, intellectual property, and other specialized fields in the Atlantic Ocean.
The UK has a more balanced relationship with the United States. The United States is the largest single export market in the UK, worth £ 60.4 billion in 2023, accounting for 15.3 % of the world. The UK has imported £ 57.9 billion from the United States.
Service trade is greatly large, with £ 126.3 billion in exports from the United Kingdom to the United States, and imports £ 57.4 billion.
In the habits caused by the differences in data collection, the United States and the United Kingdom report the extra surplus of trade. The United Kingdom reported the surplus of £ 71.4 billion with the United States in 2023, but the United States reported that the United Kingdom was 11.6 billion pounds.
Ireland and Germany have the largest US trade relationship in the EU
If Trump imposes tariffs on the EU, some countries are more likely to be hit more violently than other countries. In Germany, there are many exports equivalent to 158 billion euros (£ 131 billion) in 2023. The Netherlands imports the most products from the United States and is equivalent to 760 billion euros.
However, the percentage of exports to the United States for general trade is greatly different among the EU member countries. Ireland has the largest share of 25 % or more. Trading between Germany and the United States in Italy is about 10 % of the world in total, but East Europe countries have low stocks.
In trade, the EU takes a collective action. Emmanuel Macron states that if the block is targeted, the block will stand up for themselves. The UK is currently negotiating alone after Brexit. KEIR STARMER is trying to build a relationship with both camps, indicating that Trump may be able to “solve” with the UK.
As a result, some economists are optimistic about Britain’s prospects, but others warn you that Stamists are easily traded off.
Car, chemicals, and pharmaceuticals are the largest EU and the UK exports to the United States.
If a comprehensive tariff on the EU and British products is imposed by the United States, the heaviest sector includes local automakers, chemical companies, and pharmaceutical companies.
Machinery and transportation equipment are the largest sectors of more than 200 million pounds between the UK and the EU, led by Germany, a dominant manufacturing unit in the region. German car manufacturers have already been hit greatly due to significant businesses in Mexico.
Sign up to Today’s business
Get a set of work days -I will point out all the business news and analysis you need every morning
Privacy notification: Newsletter may include information about the content provided by a charitable organization, online advertising, and an outside parties. See the Privacy Policy for more information. We use Google Recaptcha to protect our website, Google privacy policy and terms of use.
After the newsletter promotion
In Trump’s last term, the United States targeted famous consumer goods such as French wine, cheese, Italian luxury goods, Scotland, and Irish whiskey, but the EU is Kentucky Whiskey, Levi Jeans. , Retalinated by targeting the symbols of Americana such as Harley. -Davidson motorcycle.
Trump tariffs can blow off inflation and collide with economic growth.
Economists warned that Trump tariffs could blow off our inflation and collide with economic growth, and American consumers picked up tabs at higher prices of imported goods.
The US dollar rose on Monday, and the investor rose to be forced to maintain a longer interest rate in the US Federal preparation system. If Trump expands his trade war to involve more countries, if they retaliate, they may result in a wider global inflation result, and are struck by global growth.
The National Institute of Economic and Social Society, a British think tank, estimates that all US imported tariffs (retaliation from trading partners) can reduce global growth in the next two years. The UK’s growth can fall up to 0.7 % points in the first year, but the inflation rate is 3 to 4 points and a 2-3 points higher.
However, customs duties may be discovered depending on how the trade war develops. If global growth is weakened, inflation pressure may cool down, but economists can respond by Chinese companies to find alternative buyers, so the US tariffs are low in other countries. He states that it may lead to.
High borrowing costs cause government headaches
In the fear of investors in tariffs on inflation, government borrowing costs have risen sharply in recent months. Increase in yields -effectively, government interest rates have caused headaches in some countries with high -level debt, including the UK and France.
At the minimum in September, the U.S. 30 -year -old Finance bonds have risen over 4.7 %. In the UK, borrowing costs during that period have risen from 4.3 % to 5.1 %.
For the British government, on March 26, Prime Minister Rachel Reeves will be presented before the spring statement. Analyst warns that the higher the borrowing cost, the more likely it is to break the financial rules.
After Trump’s weekend announcement, bond yields have declined because investors are in a hurry to support more secure assets and sell more risky shares. However, analysts said that strict trade -offs were appearing. Yields may be more promoted by the central bank, which holds interest rates at a higher level, but if tariffs are attacked by economic growth, the Central Bank may be forced to reduce borrowing costs. I have sex.
