US President says the UK has been “out of line” but added that the issues could be resolved…reports Asian Lite News
US President Donald Trump indicated Sunday that he would not immediately impose tariffs on Britain, as he suggested the European Union could be in line for levies like those imposed on Canada, Mexico and China.
Trump has already launched a full-fledged trade war because he wants the countries targeted, Washington’s three leading trading partners, to do more to stem the flow of migrants and illicit drugs into the country.
However, the Republican president, who returned to the White House less than a fortnight ago, has indicated he also wants to punish trade partners for running deficits with the United States.
“We’re going to see what happens. It might happen (with Britain)… but it will happen with the European Union. I can tell you that because they’ve taken advantage of us — you know, we have (an) over $300 billion deficit,” he said.
“They don’t take our cars, they don’t take our farm products. They take almost nothing; we take everything from the millions of cars, tremendous amounts of food and farm products. So the UK is way out of line, and we’ll see with the UK, but the European Union is really out of line.”
But Trump held out the prospect of a settlement with London, saying, “I think that one can be worked out.”
“Prime Minister (Keir) Starmer has been very nice. We’ve had a couple of meetings, we’ve had numerous phone calls, we’re getting along very well, and we’ll see whether or not we can balance out our (trade),” Trump said.
When asked if there was a timeline for announcing tariffs on the European bloc, Trump said: “I wouldn’t say there’s a timeline, but it’s going to be pretty soon.”
For its part, the 27-member bloc has condemned Trump’s decision to move ahead with tariffs against Canada, Mexico and China, and warned that it will “respond firmly” if it also becomes a target.
Mexico and Canada have vowed to take retaliatory measures, while China said it could take “corresponding counter measures”. On trade with the UK, the US President said the country has been “out of line” but added that the issues could be resolved.
“The UK is out of line. But I’m sure that one, I think that one, can be worked out,” Trump said.
The US President also discussed his relationship with the British Prime Minister who he said has been “very nice”. “We’ve had a couple of meetings. We’ve had numerous phone calls. We’re getting along very well,” he added.
Last week, British business secretary, Jonathan Reynolds said that the UK should be exempted from any tariffs, noting that the US does not have a goods trade deficit with the UK – which happens when a country imports more than it exports.
Tariffs are a central part of Trump’s economic policy. He sees them as a way of growing the US economy, protecting jobs and raising tax revenue.
But many economists warn that these tariffs could lead to higher prices for American consumers and could ultimately encourage other countries to reduce their reliance on the US.
Asian stocks bleed
Meanwhile, Asian stock markets faced heavy selling pressure on Monday’s opening session after Trump announced new tariffs. The US government announced to impose a 25 per cent tariff on imports from Canada and Mexico and a 10 per cent tariff on Chinese goods, which will take effect on Tuesday. The announcement triggered panic among investors, leading to a sharp decline in major Asian stock indices.
The major Asian indices including Japan’s Nikkei 225 index fell more than 2.27 per cent, while Hong Kong’s Hang Seng index dropped 2.07 per cent. Taiwan’s weighted index saw the biggest decline, losing over 3.74 per cent, and South Korea’s KOSPI index fell 2.87 per cent at the time of filing this report.
The Indian stock futures are also down with the tariff effect, at the time of filing this report Nifty futures down by 0.83 pc. The fear of a potential trade war has made investors cautious, leading to heavy selling in stock markets. Investors are worried that the tariffs could slow down global trade, affecting businesses and consumers worldwide.
Ajay Bagga Banking and Market Expert said, “A doom loop starts for global economies and markets start going down in anticipation. Trump 2.0 fears are at the centre of the plate today and safe haven buying of gold, Swiss franc, Yen will be the only place to hide in these Tariff wars induced risk off a firestorm.”
Analysts also noted that the second-order effects of the tariffs, after the initial fall in stocks, are competitive currency devaluations by exporters led by China. The third-order effects will be the intense dumping of goods produced by the already excess capacity afflicted Chinese economy.
Trump 2.0 fears are at the centre of the plate for markets on Monday and experts highlighted that safe-haven buying of gold, Swiss franc, and Yen will be the only place to hide in these tariff wars induced risk off fire storms.
Asian markets often react strongly to US policies, especially when they involve trade restrictions. China, in particular, plays a key role in global supply chains, and tariffs on Chinese goods could lead to higher prices and disruptions in the market.
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