Trump tariff VAT threat raises prospects of hit to UK
Published On Feb 14, 2025, 7:20 AM
Concerns are increasing about the potential for the UK to face US trade tariffs following President Trump's announcement to implement "reciprocal tariffs" based on countries' VAT rates. This could mean British goods face tariffs of 20% or more, significantly affecting industries such as automotive, pharmaceuticals, and food. UK businesses may be forced to absorb the costs or increase prices. The announcement raises worries about the overall impact on trade relations and the economy, with calls for strong negotiations to mitigate the effects.
Stock Forecasts
TSLA
Negative
Given the potential for significant tariffs on UK goods, British companies exporting to the US are likely to face increased costs, which could negatively impact their profit margins. This anticipated increase in tariffs may lead to a downturn in UK stocks heavily reliant on US trade, especially in affected sectors like automotive and pharmaceuticals.
NUE
Positive
Companies focusing on domestic production and those planning to set up manufacturing in the US could benefit from potential tax breaks and reduced trading fees. This could increase their stock value in the long run as they adapt to the changing trade environment.
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