China adds that “talks must be equitable and mutually beneficial.”
https://x.com/Jukanlosreve/status/1919884632230920629
https://x.com/KobeissiLetter/status/1919883606819840359
President Trump said he won’t lower tariffs on China so as to facilitate trade negotiations.
S&P 500 futures rose 1.1% after Trump announced that they have made a comprehensive trade deal with the UK
Are are a bit more insights from GPT. Not 100% if accurate and up to date. Getting some small overviews of what are the outcomes of tariffs negotiations would be cool to understand better into which direction the world and particularly the united states is moving with tariffs.
Yes, the terms of recent U.S. trade agreements, particularly the newly announced U.S.–UK trade deal, have been made public and offer insight into the concessions achieved by both sides.
This agreement is the first major trade pact signed by President Donald Trump in his second term and is considered a significant diplomatic win for both nations.(Financial Times)
Tariff Reductions: The U.S. secured reductions in the UK’s digital services tax, benefiting American tech companies like Amazon and Meta. (Business Insider)
Market Access: The deal includes provisions for increased U.S. access to the UK market for certain goods, although specific sectors were not detailed in the available sources.(AP News)
Tariff Relief: The UK obtained relief from the 25% U.S. tariffs on key exports such as steel, aluminum, and automobiles, which are vital to the British economy. (Business Insider)
Standards Maintenance: The UK maintained its stringent food safety standards, refusing to allow imports of chlorine-washed chicken and hormone-treated beef, thereby preserving its regulatory alignment with the EU. (AP News)
U.S.–Japan Talks: Recent negotiations between the U.S. and Japan have seen limited progress, with the U.S. showing reluctance to reduce tariffs on automobiles, steel, and aluminum. (Reuters)
U.S.–India Discussions: India has proposed significant tariff reductions on U.S. imports, including a “zero-for-zero” tariff on auto parts, in exchange for relief from U.S. tariffs. (Wikipedia)
The recent U.S.–UK trade agreement demonstrates a strategic balance, with both nations achieving key objectives: the U.S. gained concessions on digital services taxation and market access, while the UK secured tariff relief for critical exports and upheld its regulatory standards. Other ongoing negotiations, such as those with Japan and India, indicate a continued U.S. focus on leveraging tariffs to negotiate favorable trade terms.(Financial Times)
For more detailed information on existing U.S. trade agreements, you can visit the U.S. Department of State’s trade agreements page.
A 10% baseline tariff on UK will remain
One of the most important things I take from this trade deal with the UK is this quote from Trump:
- 10% base rate for UK not a template for other countries; template of 10% is probably the lowest end
- 10% tariff set for U.K. is ‘low number,’ will be higher for other countries
So, It seems 10% baseline tariffs are indeed the floor for most imports, with potentially higher tariffs for some countries or sectors. The market has been celebrating this positive trade deal news, but a 10% baseline tariff is still ~410 billion headwind, a ~1.4% of GDP, 2% of spending, and 12% of profits.
I still expect this if is indeed the case to be a significant headwind to the economy (but for sure much less than previous numbers), and growth to come close to zero or even negative for some quarters later in the year or early 2026 (meaning at this point I only expect a shallow recession, not a full blown recession), which it seems to me is something the market is currently ignoring (earnings still expected to be 9% in 2025 and 13.5% in 2026)
As a reference also, the US has a trade surplus with the UK of 11B, so this was probably an easier trade deal, where Trump could make more concessions. China,the EU, and Japan are probably not as easy where there is significant trade deficits.
Trump floated 80% tariff on China ahead of the Saturday negotiations, adding that China should do more to open their market for US goods
US and China made “substantial progress” in trade talks, Bessent said
US will lower tariffs on China to 30% while China will reduce tariffs on US to 10%
