The Headline Deal: Trump and Starmer's Bold Movement on Trade
Trump and Starmer commend the initial significant tariff agreement
The US and the UK have struck gold with their initial significant trade pact, marking a victory for Donald Trump's assertion that nations yearn to collaborate with the USA. In a press conference at the White House, Trump heralded the deal as a triumph of his tariff strategy. Despite the European Union (EU) threatening tariffs on US exports worth nearly $100 billion, Trump expressed his intentions to forge an agreement with the EU.
The UK will welcome aircraft from Boeing and permit the import of aircraft parts from Rolls-Royce, all while lowering American tariffs on various goods. British Prime Minister Keir Starmer described the moment as historic, endorsing his approach of avoiding confrontation with the US. Unlike Brussels, he abstained from issuing threats of counter-tariffs, instead opting for a charismatic approach during his visit to the White House in February.
Nevertheless, this agreement is not a conventional free-trade agreement. It serves as a blueprint for further negotiations, concentrating on specific areas. The deal's true essence lies in its comprehensiveness, though details pertaining to specific goods and tariffs remain sketchy.
Cars vs Aircraft Parts: The Engines of Progress
According to US Trade Minister Howard Lutnick, tariffs on cars and car parts will drop to 10% for a quota of 100,000 vehicles, while aircraft parts from Rolls-Royce will enter the US duty-free. This arrangement comes along with a considerable boost in British imports of aircraft from Boeing, estimated to be around $10 billion (approximately $8.9 billion). Additionally, Britain will eliminate tariffs on US goods from 5.1% to 1.8%, and scrap tariffs on British steel and aluminum.
Trade volume between these two economies stood at $370 billion last year. It's essential to note that around 70% of British exports to the US were services, which are tariff-free.
Starmer, who has faced political pressure since the election last summer, might find a silver lining in this agreement. On the other hand, Trump, who has experienced diminishing popularity due to his economic policies, pursues further agreements with significant partners.
EU Threats and Counter-Measures
Brussels has expressed its readiness to impose counter-tariffs if negotiations with Washington fail. The EU Commission has been preparing additional tariffs on US exports worth up to $115 billion, affecting products like cars, sweet potatoes, and whiskey. This list is set to be made public, with export-oriented companies in the US expected to pressure the government to reach an agreement with the EU.
Parallel to the preparation of new counter-tariffs, the EU Commission plans to sue the US over tariffs at the WTO. They intend to form an expert group to evaluate whether the tariffs violate WTO rules. Furthermore, the Commission is considering EU export restrictions on certain products worth $5.5 billion, including steel scrap and chemical products currently imported from the US.
As for the UK, it's THE more important trading partner, with approximately half of British goods exports headed there.
[1] Source: ntv.de, as/dpa/rts
- USA
- UK
- Donald Trump
- Keir Starmer
- Tariffs
- EU
- The community policy should address the impact of tariffs on employment policies, especially concerning American goods in the EU, as the EU has threatened counter-tariffs on exports worth up to $115 billion.
- The employment policy in the UK will see an influx of employment opportunities in the aviation sector with the import of aircraft from Boeing and Rolls-Royce aircraft parts entering the US duty-free.
- Politics, specifically the general-news category, has been actively discussing the implications of tying trade agreements with aircraft industries, as evidenced by the negotiations between the US and the UK.
- In a bid to strengthen international relations, employment policies in various countries should consider the impact of tariffs on key export industries, such as the aircraft industry in the UK and the automobile industry in the US, as demonstrated by the Trump-Starmer agreement.
