London (Reuters) – Governor of the Bank of England (BOE), Andrew Bailey, said on Friday that the trade agreement between Washington and London was positive but that he left customs duties on most exports of British property to the highest United States as they were in early April.
US President Donald Trump and British Prime Minister Keir Starmer announced on Thursday a trade agreement that reduces surcharge on British cars, steel and aluminum, but leaves customs duties of 10% on many other British products.
“This is good news. I must say that this is good news in a world where the effective rate of customs duties will remain higher than it was before all this begins. I think we have to keep this in mind,” Andrew Bailey said during a question and answer session organized as part of an economic conference in Reykjavik.
Before the details of the agreement were announced on Thursday, the BOE published estimates showing that the US president’s customs rights projects from April 29 would make the British economy back approximately 0.3% over three years.
About two-thirds of this drop are due to the indirect impact of American customs duties on the other business partners of Great Britain, rather than the customs duties imposed directly on British exports.
The Governor of the BOE repeated that he wanted to preserve an open global trade system while attacking the significant and persistent commercial surpluses in certain countries.
Andrew Bailey said during an interview on the BBC earlier in the day that Great Britain should do “everything that is in its power” to reverse the decline in the exports of goods to the European Union (EU) after the country left the block in 2020.
Although exports of goods do not represent such an important part of the British economy as for other countries, Great Britain is more exposed than others to the health of the global economy, he said.
“The impact of all these commercial developments on the prospects of the United Kingdom therefore depends not only on the British trade agreement, but also on the agreement of the rest of the world,” he added.
(Report David Millike, Andy Bruce and Kate Holton, Diana Mandia)
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