Tariff Talk: UK Hopes For US Deal As EU Vows Response
Feb 11, 2025
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Kevin Whitelaw, Bloomberg's Brussels Bureau Chief, dives into the UK's trade strategies post-Brexit, highlighting their distinct approach compared to the EU's plans for retaliatory tariffs. He discusses the UK’s optimism for a tariff-free agreement with the US, especially regarding steel and aluminum, amid potential EU countermeasures. The conversation covers the complexities of maintaining strong diplomatic relations while navigating the impacts of past US trade policies under Trump, all while emphasizing the UK's vision for a balanced trade future.
The EU is preparing retaliatory measures against US tariffs, showcasing a united front to protect its economic interests.
The UK aims to avoid tariffs through a proactive free trade strategy, seeking to strengthen its post-Brexit trade relationships.
Deep dives
Impact of Trump's Tariffs on Global Trade
Donald Trump announced a plan to impose 25% tariffs on all steel and aluminum imports, which has garnered significant attention from economists and investors. The European Union responded swiftly, expressing strong dissatisfaction and promising 'firm and proportionate countermeasures' against these tariffs. German Chancellor Olaf Scholz emphasized the EU's resilience in dealing with potential economic repercussions, highlighting the bloc's united front despite individual country concerns. Meanwhile, the UK government is taking a different approach, aiming to avoid tariffs altogether in an effort to maintain trade relations and prevent an escalation into a trade war.
Disparate Responses from the EU and UK
The distinction between the EU's and UK's responses to Trump's trade policies reflects their respective strategies, particularly in the context of Brexit. While the EU prepares retaliatory measures, such as tariffs on American products, the UK focuses on preventing the imposition of tariffs by advocating for a free trade approach. Foreign Secretary David Lammy characterized the UK as an open market without intentions of escalating tensions. UK Steel has expressed concerns that American tariffs could severely impact the British steel industry, which exports a significant portion of its product to the US.
Negotiating Trade Relationships Post-Brexit
The UK's post-Brexit flexibility allows it to negotiate its own trade agreements independently from the EU, potentially securing a deal with the Trump administration. As Trump has shown a degree of warmth towards UK leadership, there is optimism that Britain might navigate tariffs successfully. However, this could complicate the UK's relationship with the EU and challenge its attempts to unify trade approaches. UK ministers believe that a careful balance must be struck to foster positive relations with both the US and the EU, emphasizing the fundamental need for stability in trade.
The EU says it’s ready to retaliate to US tariffs on steel and aluminium imports. But the UK is pursuing a different strategy, seeking to avoid the levies altogether. We discuss the diverging strategies with our Brussels Bureau Chief Kevin Whitelaw. Hosted by Yuan Potts and Stephen Carroll.