A trade agreement concluded, 199 are still pending

A trade agreement concluded, 199 are still pending

The President of the United States, Donald Trump, finally concluded his first trade agreement. However, this is not a “completed business” in the conventional sense. It is more of a concept - a framework for negotiations between the USA and the United Kingdom, which should take place in the coming months or years. The aim is to develop a potential future trade agreement that may be more advantageous for the United States than the current trade situation.

an important step for Trump

Even if the details of this frame are sparse, this step is a significant success for Trump. The agreement with the United Kingdom gives other world leaders hope that trade agreements can contribute to pulling the global economy out of the crisis and offers a basis for future negotiations.

improvement of the trade relationship?

As British Prime Minister Keir Strander, the question of whether the agreement was an improvement in trade relationships compared to the time before Trump's office was, he replied: "The question you should ask is: is it better than yesterday?" The answer is undeniable. The frame provides for lower tariffs on some British goods and could open the market for other US goods in the United Kingdom.

urgency before the cut -off date

However, the president has to conclude even more than a hundred similar agreements before the clock expires on July 8th - on this day, high counter -tariffs of up to 50 % should come into force on dozens of countries. Trump pretends that this is not a big problem. In a last month, conducted interview with time would.

challenges in the trade war with China

Even if that was possible, these agreements have been promised for months, and the slow negotiations do not indicate that negligible compromises will soon be achieved. The ultimate goal - relaxation in relation to China - is still a long way off. With a customs coil of at least 145 % on most Chinese imports and a retaliation of 125 % on most US goods, trading with one of the most important economic partners in America has almost come to a standstill.

negotiations with China in the waiting loop

US and Chinese officials will meet in Geneva this coming weekend to discuss the trading situation, but US finance minister Scott Besser said that it was unlikely that they would conclude an agreement. He hopes for a "relaxation". However, Trump said on Wednesday that he would not lower the high tariffs in China before the talks, which Beijing had previously mentioned as a prerequisite for negotiations.

negative effects on the US economy

In the meantime, the aggressive trade war of the United States has led to the effective customs set on imports, according to Fitch Ratings, has risen to over 22 %, which represents the highest value of all developed countries. This has plunged the US economy into the crisis. The recently published report on the gross domestic product (GDP) has had the first shrinkage of the economy since the beginning of 2022, since otherwise healthy economic growth was pressed through the warehouses of goods before pollution of tariffs.

The reality of trade agreements

Despite the government's rhetoric, that they are in advanced trade negotiations with more than a dozen countries, real trade agreements usually need significant time - often years. These include complex agreements that deal with different goods and non -tariff trade barriers. Political considerations often play a major role because different parties try to protect voters with special interests.

The uncertainty remains

The so-called "Agreement", which the Trump administration has completed with the United Kingdom, is more like a memorandum of understanding. It may lead to lower tariffs at short notice, but in the long run it will hardly bring any significant economic advantages. The 90-day moratorium for tariffs, which has now expired, offers little time for the typical negotiations that have to take months or even years to lead to a trade agreement.

What's next?

Trump made it clear that he will not extend the tariffs a second time and may already be able to restore his tariffs to countries in the next few weeks with which he does not reach an agreement. "It will be difficult to make the United States' sales representatives to negotiate 100 separate trade agreements within 90 days," said Jensen. "This means that President Trump will soon have to decide whether the tariffs will be reintroduced or postponed."

The focus remains on China

The stock exchange reacted positively to the news from Thursday, but the real challenge is now the negotiation with China. High -ranking tariffs on China have largely brought the trade between the two countries to a standstill, and Trump repeatedly emphasized this. A decline of 60 % of China's trips to the United States in April illustrates the urgency of the situation.

conclusion and outlook

Although there are always more direct warnings and economic turbulence, both countries do not even seem to be close to an agreement. Even with the conversations that are supposed to start this weekend, it could take two to three years for the trade to normalize.