And the recently signed trade agreement between the United Kingdom and the United States has accomplished just that—though only for Britain. While this is a positive step toward trade flexibility, it further highlights the need for the US administration to commit to greater flexibility in its trade agenda. This latest move comes on the heels of both countries preparing for further negotiations with the European Union. They are demanding action on these critical trade issues.
The UK-US deal is an important step in the right direction for Britain. It directly worms its way into Brexit concerns about what happens to the country’s trade future. Importantly, officials have asserted that this agreement does not jeopardize upcoming UK-EU talks, maintaining a clear boundary between the two sets of negotiations. The flexibility promised by the US administration has been widely viewed as a tactical move to create goodwill with investors.
While there is considerable optimism, experts are still cautious on the UK-US agreement. They write that the deal probably won’t lead to a broader denuclearization of the United States’ tariff policies. Analysts are skeptical this deal will result in wider tariff reductions. Yet, they point out the economic repercussions that it’s having on non-agricultural sectors and our trading partners.
Fears of a US recession are abating. This rosy change is being driven by increasing trade optimism, thanks in large part to the UK-US deal and how it might affect future trade conversations. The new announcement has clearly fired up currency markets. The USD/JPY jumped to a one-month high, boosted by increasing investor confidence spurred by optimism over the US-China trade deal.
“Why the UK-US trade deal won’t herald a wider tariff climbdown” – www.fxstreet.com