Trump's Tariffs on US allies
City academics comment on Trump's steel and aluminium tariffs.
"The impact of tariffs on steel and aluminium on US jobs is minimal as it will increase prices for other goods that use those metals like cars etc. and prices will go up in the US. The UK will need to act with the EU for now but be wary of the impact on a post-Brexit US trade deal.
"The US will want to open up UK financial and health services to US firms and prices once EU regulations on price and safety are gone. But the EU will not want those regulations to be abolished by the UK and will expect any deal with the UK to retain health and other standards in return for a deal with the EU.
"Generally, this is a big headache but not a war; it will place May in a tough position as the US is so close of an ally."
"It is very difficult to speculate how President Trump thinks, and his tweets are not necessarily a good indication, but presumably he expects that in the longer term the steel and aluminium tariffs will benefit the US economy, even if in the short term there are problems in terms of higher costs to consumers and manufacturers.
"I suspect that he envisions the tariffs as a tactical manoeuvre to gain concessions from Canada and Mexico in NAFTA negotiations and possibly to secure the EU’s support for blocking China’s role in the over-supply of steel on global markets. The tariffs will almost certainly affect British steelmakers by raising costs of exporting to the US. The EU’s list of retaliatory tariffs against the US may include products which are of interest to UK consumers, whether it is motorcycles or bourbon.
"At this point, Britain’s trade policy remains tied to the EU, but it is worthwhile considering the aggressive pursuit of a Free Trade Agreement with the US following Brexit. President Trump has indicated that he favours bilateral arrangements and a deal with the UK should be a strategic priority for the President and for Theresa May. A comprehensive FTA with the US could shield the UK from future tariffs of this nature in the future."