Maybe Trump’s Tariff Bludgeon Was Good for Something after All
Published in Die Presse
(Austria) on 9 May 2025
by Jakob Zirm (link to original)
(Austria) on 9 May 2025
by Jakob Zirm (link to original)
Translated from
by Mallory Matsumoto.
Edited by Michelle Bisson.
The threat of a tariff war has now resulted in a trade agreement between the U.S. and the U.K. U.S. President Donald Trump said that there will also be one with the EU. That could end up being expedient for both sides.
“Liberation Day” on April 2 shocked the global economy. That is the day when U.S. President Donald Trump imposed high tariffs on almost every country in the world and caused stock markets around the world, as well as projections from around the world about this year’s economic growth, to crash. After two weeks, the fuss was largely over, after a 90-day reduction of the tariffs to a “base level” of 10%. But the subject still hangs like the sword of Damocles over the global economy. And it will become toxic again by mid-July at the latest.
But for now, there is a piece of good news. The United States and the U.K. have made a skeleton agreement for a trade deal. Many details still need to be negotiated, but one thing is already clear: The tariff rates will be drastically reduced on both sides. Issues that they could not agree on for years are apparently being solved under pressure.
A First Step toward Free Trade?
When presenting the deal, Trump explicitly said that he wanted to make a similar agreement with the EU. It will be a long way to get there. The importing of U.S. agricultural products, for example, is likely to remain a difficult topic. But if a compromise can be found, U.S. tariffs on European goods could also be reduced — even far below previous rates. It would be a step toward free trade between the two most important economic blocks in the West.
A development from which both sides would profit.
“Liberation Day” on April 2 shocked the global economy. That is the day when U.S. President Donald Trump imposed high tariffs on almost every country in the world and caused stock markets around the world, as well as projections from around the world about this year’s economic growth, to crash. After two weeks, the fuss was largely over, after a 90-day reduction of the tariffs to a “base level” of 10%. But the subject still hangs like the sword of Damocles over the global economy. And it will become toxic again by mid-July at the latest.
But for now, there is a piece of good news. The United States and the U.K. have made a skeleton agreement for a trade deal. Many details still need to be negotiated, but one thing is already clear: The tariff rates will be drastically reduced on both sides. Issues that they could not agree on for years are apparently being solved under pressure.
A First Step toward Free Trade?
When presenting the deal, Trump explicitly said that he wanted to make a similar agreement with the EU. It will be a long way to get there. The importing of U.S. agricultural products, for example, is likely to remain a difficult topic. But if a compromise can be found, U.S. tariffs on European goods could also be reduced — even far below previous rates. It would be a step toward free trade between the two most important economic blocks in the West.
A development from which both sides would profit.
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