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April 14, 2025
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US Tariffs: Of Words And Bonds

  • Although Donald Trump’s U-turn may allow time for the conclusion of bilateral trade negotiations with some US partners, neither China nor the EU is likely to strike an agreement imminently, especially now that America’s vulnerability to the bond market has become all too clear.

By Alastair Newton

April 08, 2025
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UK: Spillover effects from US tariffs

  • The UK output destroyed by reciprocal US tariffs is only partly due to the direct impact of the new 10% rate (worth ~0.2% of GDP) and generally weaker US prospects (0.1%).
  • Global GDP growth is depressed by this policy, indirectly destroying demand for UK exports from elsewhere (0.2%), especially if countries harm themselves by retaliating.
  • An overall 0.6% GDP hit has two-sided risks and a skew lowered by likely negotiations. Fears of items dumping into the UK market are overblown excuses for protectionism.

By Philip Rush

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