The United Kingdom has added its voice to the chorus of criticism of United States president-elect Donald Trump’s plan to clobber trading partners with tariffs after he takes over in the White House.
Clare Lombardelli, a senior official in the UK’s central bank, the Bank of England, has told the Financial Times newspaper Trump’s tariffs could dent productivity and fuel inflation throughout the world, even in nations that are not directly subjected to tariff s.
Lombardelli, who is the bank’s deputy governor for monetary policy, spoke out after Trump said he will impose tariffs of 25 percent on imports from Mexico and Canada when he comes to power on Jan 20. He has also said he will slap an additional 10 percent levy on items imported from China, which are already the subject of a range of import taxes.
Trump’s plans have already hit global stock markets and drawn widespread criticism from Washington’s trading partners.
Lombardelli said the Bank of England committee that sets interest rates is trying to measure the likely impact of the new tariffs on the UK economy, and whether interest rates should be adjusted accordingly.
She said the impact “entirely depends on how other countries respond”, with one scenario being that nations hit with tariffs look for new markets elsewhere, but cut selling prices, which could fuel inflation.
” (Tariff s) certainly are negative for growth in the short, medium, and long term,” she told the Financial Times. “They are negative for productivity. The effects on inflation (are) less clear.”
Her comments follow Mexico’s President Claudia Sheinbaum saying her country could retaliate against the US with tariffs of its own.
She told local media on Tuesday that she has sent a letter to Trump, in which she says: “One tariff will be followed by another in response, and so on until we put common companies at risk. The main exporters from Mexico to the US are General Motors, Stellantis, and Ford Motor Company, which arrived 80 years ago. Why put in place a tariff that puts them in risk?”
She made the remarks after Trump took to social media on Monday evening to say he will impose 25-percent tariffs on imports from Mexico and Canada, in retaliation for them allegedly allowing people and drugs to cross their borders and illegally enter the US.
According to official US data, China, Mexico and Canada account for 40 percent of the $3.2 trillion of goods imported by the US each year.
Economist Julian Jessop, a fellow at the Institute of Economic Affairs, told the Daily Express newspaper that the UK’s exports to the US are tiny in comparison, and that it is highly unlikely Trump will hit the UK with direct import tariffs.
