CEBR warns Trump's trade policies could reduce UK economy by around 1 percent
Date
11/20/2024 6:42:29 AM
(MENAFN) US President-elect Donald Trump's trade policies could have a substantial impact on the UK economy, with economists predicting a near 1 percent contraction in GDP if severe tariffs are imposed. The Centre for Economics and Business Research (CEBR) projected that the UK would be particularly vulnerable to these potential trade disruptions if the US takes a protectionist stance under Trump’s leadership.
The CEBR's analysis highlights that a 20 percent tariff on all US imports, coupled with a 60 percent tariff on Chinese goods, could create significant global economic consequences, with the UK bearing much of the impact. This forecast is based on the assumption that no retaliatory measures will be taken by other nations, which could further complicate the global trade environment.
In addition, the CEBR warned that the global energy market could face increased volatility, particularly if retaliatory tariffs push energy prices higher. The price gap between Brent crude and WTI crude surged by 118 percent during Trump's first term, largely due to resistance against US energy exports. Despite some factors, such as China's shift to cheaper energy from Russia and OPEC's production cuts, helping to moderate prices, uncertainties still remain.
To avoid new tariffs, one possible solution for the UK would be to negotiate a Free Trade Agreement (FTA) with the US. However, the CEBR noted that challenges persist, especially regarding food standards. The US has pressed for the UK to adopt American standards, which differ significantly from those previously set by the European Union.
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