Trump announces an important trade agreement with Great Britain on Thursday

Trump announces an important trade agreement with Great Britain on Thursday

President Donald Trump indicated a significant trade announcement for Thursday - a source that is familiar with the plans of the administration reported that the agreement could be concluded with the United Kingdom. This is another sign of a possible relief of historically high tariffs that could seriously endanger the US and global economy.

trade agreement with the United Kingdom

"Big press conference tomorrow morning at 10:00 a.m. in the Oval Office, regarding a major Trade Deal with the impressive representatives of an important, highly sorted country. The first of many !!!" Posted Trump on Truth on Wednesday evening. Trump did not provide any specific information in his post, but his government indicated that she was in active negotiations located. Trump's top trade advisor, Peter Navarro, told CNN on Tuesday that he suspected that the United Kingdom could possibly be the first country with which the United States will sign a trade agreement.

trade talks with several countries

"I do not know whether the United Kingdom or India comes first. We have a small obstacle in this history of India that may delay things, but I can assure the Americans that there will be agreements and they will be very good agreements for the American people," said Navarro.

The Financial Times reported on Tuesday Kingdom could possibly be signed this week. The United States could free this agreement from some non-tariff trade barriers, including the 2% digital service tax that is collected on US technology companies. In return, the United States could reduce customs pollution to the United Kingdom or free the country of 25% tariffs to aluminum, steel and cars, according to the report of the Ft.

The reality of trade agreements

Although the government emphasizes that it is in advanced trade negotiations with numerous countries, real trade agreements need considerable time, often years to be negotiated. They usually contain extremely complex agreements that deal with the subtleties of different goods and non-tariff trade barriers. Political considerations also play a major role because different parties try to protect the interests of voters with special interests.

The "Agreement" that Trump has had was therefore more of a memorandum of understanding. This could lead to lower tariffs in a certain country at short notice, but do little to help that this will be a substantial economic profit in the long term.

This agreement is only one example among many. The "mutual" tariffs that came into force on April 7 and were suspended on April 9 for 90 days affect dozens of countries. A hundred others are affected by the universal customs of 10%. It is hardly possible to conclude all of these agreements by July 8th.

predictions and challenges

"The 90-day customs break, which has now passed about 25%, leaves little time for the typical negotiations that take months if not years to negotiate a trade agreement," said Jacob Jensen, trade analyst of the American Action Forum, a centristic political institute.

"There is a significant difference whether these agreements are official, written trade contracts or only oral obligations to buy more US products. The first has long-term economic effects while the second can be ignored," he added.

Trump said last month that he would not extend the tariffs a second time and could possibly even act earlier to restore some tariffs to countries with which his administration cannot reach an agreement within two weeks.

signs of de -escalation

The announcement of a trade agreement by Trump is the second significant sign this week that the administration may be willing to conduct negotiations that could ultimately lower some tariffs to foreign countries.

On Tuesday, Finance Minister Scott Bessent said that he together with the US trade officer Jamieson Greer will travel to Geneva, Switzerland to meet his Chinese counterparts. Although Bessent pointed out to Fox News that one should not expect a large trade agreement from these meetings, he recognized that this was an important step in the negotiations and could contribute to the tensions of de-escalated , which led to the USA on most Chinese goods. On Wednesday, however,

Trump said that he would not lower the high tariffs in China before the conversations, which Beijing had previously mentioned as a prerequisite for negotiations. When he was asked in the Oval Office whether he was ready to take back the historically high tariffs to bring China to the negotiating table, Trump simply replied: "No."

economic effects of the trade wars

Despite all of this, any relaxation in the trade war could be a positive signal for companies and consumers in both countries and all over the world. The draconian tariffs have already damaged the global economy-especially the US economy. The US economy came in decline in decline , this was the first shrinkage for three years, since companies were in anticipation of trumps "day" Liberation ”-tariffs that came into force in the second quarter.

Although the China-USA trade confrontation is the most aggressive, Trump has also imposed high tariffs to most other countries worldwide: a universal inch of 10% to almost all goods that are imported into the USA, as well as 25% tariffs on steel, aluminum, cars, auto parts and some goods from Mexico and Canada.

The world will be traced by the announcement on Thursday and the talks between the United States and China this weekend.

The chairman of the Federal Reserve, Jerome Powell, expressed on Wednesday at a press conference that tariffs from the US economy could cause considerable damage. But he thinks that the trade talks of the United States could prevent the worst with other countries.

worldwide economists from the international monetary fund, the OECD and the World Bank have all predicted that Trump's trade war could have catastrophic effects on the global economy and that growth in some countries is dramatically slowed down while inflation is heated up again. Many US economists and large banks predict that the United States could get into a recession this year.

This story has been updated with further developments and context.