Great -Britain runs the risk of a £ 24 billion hit for the economy after Donald Trump promised to impose rates on countries that charge VAT.
The American president said he would charge mutual rates for the purposes of fairness', which could result in a 21 -rst tax on goods exported to America.
He promised to tackle 'every country one by one' – which means that it is not yet clear what the impact on Great Britain will be.
The UK currently charges a standard VAT of 20% for most goods and services. Trump told reporters that he regards VAT as a rate.
The National Institute of Economic and Social Research (Niesr) rather estimated that the rates of that scale could hit 0.4 percentage points of British economic growth in the coming two years – equal to around £ 24 billion.
'I have decided to close honesty that I will charge a mutual rate. It's honest for everyone. No other country can complain, “Trump told reporters while signing the new order she placed in place.
“Rates are good, rates are actually great,” he added.
William Bain, head of trade policy at the British Chambers of Commerce, said that the proposals' more costs and uncertainty for investors, companies and consumers would create after what has already been a 'tough start' for the year.
President Donald Trump, accompanied by secretary of trade Howard Lutnick, signs an executive order on mutual rates in the Oval Office
The mutual rates can be a headache for Rachel Reeves and Keir Starmer (photo) with fears that it could be 0.4 percentage points on British economic growth in the coming two years
He warned that sectors such as cars, pharmaceutical products and food and drinks through the plans can 'be affected considerably'. Ministers must “negotiate alternative regulations with the US,” he said.
“We must argue for pro-growth exemptions of proposed rates to benefit British trade.”
The new rates will be the most radical because America set up 50 percent rates for all production goods in 1890.
Those rates were formulated by the 25th President William McKinley, who called Trump the 'Tariff King'.
He said that American prices could “rise” because of the rates, for fear of long -term trade conflicts.
Trump had hyped the order online as a signal event, using a sentence that he often applies to orders he wants to emphasize.
'Today is the big: Mutual rates !!! Make America great again !!! '
A higher officials of the White House described the enormous reach of the rates, which will go much further than the rates imposed on other countries to the US to include 'difficult legal requirements', exchange rates that lead to 'undervalued currency' and tax structures that Possibly disadvantages the US
US President Donald Trump watches as he is standing in the Oval office of the White House
President Donald Trump signed an order that imposed 'mutual' rates for other countries
President Trump called the mutual rates 'The Big One' online
“It is clear that they cheat us,” said a senior white house.
The 'mutual' part of the rates taxes input at the same rate that other countries apply to American exports – although the definitions applied by the White House give Trump a lot of leeway to increase rates on a nation if it considers it necessary .
The official described how the order would take into account
But the list of factors that are being considered offers a major list of reasons to make a new rate.
They include rates, 'unfair, discrimination or extraterritorial taxes' including a tax with added value, which is common in Europe.
Trump himself said that he would not tolerate the VAT of the European Union, which he called 'brutal'.
Also considered 'subsidies and difficult legal requirements', exchange rates that' deviate from market value 'such as' undervalued currency' and 'any other practice that [U.S. Trade Representative] Provisions is an unfair limitation. '
The officer does not only have the new rates that were reduced by negotiations – while Trump paused large rates he threatened to impose on Canada and Mexico.
Trump's White House argues that foreign tax systems disadvantage the disadvantage
'What we hope to do is have this discussion with the nations of the world about how unbalanced the trade environment is because of the existing structures. So the president is more than happy to lower the rates if countries want to lower rates. But let's also acknowledge that rates, higher rates, are not the majority of the problem in many, if not most cases, “the official said.
The proceeds from the bond of the euro zone fell before the details about the move.
The trade movements come prior to a visit from Indian Prime Minister Narendra Modi.
The rates are only the latest aggressive trade movement of Trump, which campaigned with the argument that the US is 'scammed' and has removed warnings that they can contribute to inflation.
On Monday he made 25 percent rates on steel and aluminum and he set 10 percent rates for all goods from China, while for 30 days he paused his 25 percent rate on Canada and Mexico, the best trading partners in the country.
