Donald Trump has said ‘absolutely’ when asked if the EU will see tariffs (Image: Getty)
Britain “should be spared” from Donald Trump’s tariffs, while the is “next in the firing line”, an economist has said.
Julian Jessop, an economics fellow at the Institute of Economic Affairs think tank, suggested the UK would avoid tariffs, pointing to the country’s more balanced trade with the US compared to the EU.
Mr Jessop, posting on X, said: “Sad but not surprising to see Trump press ahead with tariffs on China, Mexico and Canada – with the EU next in the firing line. At least the UK should be spared… #BrexitBenefits”.
His comment was accompanied by a chart which shows that while the US runs goods trade deficits with China, the EU, Mexico and Canada, the reverse applies to its goods trade with Britain.
The chart, based on data from the US Bureau of Economic Analysis, shows the US-UK goods trade relationship is relatively well-balanced compared with others.
The US and UK have a relatively well-balanced trading relationship when it comes to goods (Image: Getty)
President Trump announced on Friday (January 31) that he would place 25% tariffs on imports from Canada and Mexico and 10% tariffs on goods from China effective from Saturday (February 1).
He told reporters in the Oval Office yesterday that on goods from the .
The leader of the free world said: “Am I going to impose tariffs on the ? Do you want the truthful answer or should I give you a political answer? Absolutely, absolutely. The has treated us so terribly.”
His comments are the first time Mr Trump has appeared to confirm his intention to impose tariffs on the bloc, but he fell short of saying where they would fall.
Mr Trump had long been threatening tariffs to ensure greater cooperation from Canada, China and Mexico on stopping illegal immigration and the smuggling of chemicals used for fentanyl.
He has also pledged to use tariffs to boost domestic manufacturing and raise revenue for the US federal government.
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Canada and Mexico could retaliate (Image: Getty)
But the move threatens to ignite a trade war with the United States’ neighbours – Canada and Mexico – as well as its geopolitical rival, China.
Canada and Mexico have both said they have prepared the option of retaliatory tariffs to be used if necessary, which in turn could trigger a wider trade conflict. This, economists say, could hurt growth and further accelerate inflation.
Tariffs are typically charged as a percentage of the price a buyer pays to a foreign seller. Mr Trump insists they are paid for by foreign countries, but in fact US importers pay with the money going to the US Treasury.
The US companies that import those goods and pay the tariffs typically pass their higher costs onto customers in the form of higher prices. Tariffs can also harm foreign countries because they make their products harder to sell abroad.
Economics expert Stephen Innes said in his blog The Dark Side of the Boom on Saturday: “A massive shake-up in global trade is on the horizon, and the ripple effects could hit markets, supply chains, and global growth hard.
“Brace for impact – the US could be about to throw down the biggest trade war we’ve seen in history.”