The Bank of England's Governor, Andrew Bailey, recently spoke about the impact that the tariffs will have on the United Kingdom's economy. He said that even if President Trump does not directly order tariffs to be placed on the trades between the United States and the United Kingdom there is no possible way for the English economy to avoid impacts from the tariffs. Bailey stated that the tariffs that will be placed on China, Mexico, and Canada will impact the rest of the world. This would likely result in fragmentation of the global economy which would negatively impact growth everywhere and would mainly impact inflation and trade relations.
Even though no tariffs have been announced yet between the United Kingdom and the United States, there have been warnings of them in the foreseeable future. According to the Department of Business and Trade, the United Kingdom's largest trade partner is the United States. 17% of the United Kingdom's total trade is with the United States, so if the Trump administration were to put tariffs onto the UK it would most definitely impact both economies heavily.
One of the main reasons that Trump would put tariffs onto the United Kingdom is because one of the goals that Trump has set for his term is to increase the amount of exports out of the States along with bringing production back to America. Currently, it is about even the amount of exports and imports that are exchanged between the two trade partners. Ever since the warnings of the potential tariffs the Bank of England reduced their growth expectation for the calendar year from 1.5% to 0.75%. Recently, the United Kingdoms GDP reading showed them flatlining during the third quarter with no growth to be shown for.
https://www.cnbc.com/2025/02/06/bank-of-england-andrew-bailey-says-uk-cant-avoid-us-tariff-impact.html
1 comment:
I wonder what other markets and economies will open up because of these new trade policies with the US. Especially if economy’s like the UK is doing worse.
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