No. of Recommendations: 7
But I was told the US economy is on the brink of collapse and everyone knew it. Not sure why an ardent conservative like Kier Starmer would rush into this.
The most likely explanation is that the Administration really needed to have something to announce. They might have given way on some points to be able to announce a deal that was already nearly done anyway.
No one has said the US economy is on the brink of collapse. What we've said is that the tariffs are going to cause immense political pain for the Administration as their effects are felt in the US, including a strong possibility of a recession. Therefore the Administration will therefore have a pretty weak negotiating position with our major trading partners - and thus is exceptionally unlikely to be able to extract any concessions that are worth the massive dislocation caused by the trade war.
None of that is really applicable to the UK discussion, though. We run a trade surplus with them, and we've been in discussions to create a framework for US-UK trade ever since Brexit took them out from under the EU umbrella. So this is just an "ordinary" trade agreement - the UK wasn't hit with any "reciprocal" tariffs, and there had been years of negotiations already in place laying out the various asks and gives of each party.
It is an entirely feasible path for the Administration to accept fig leaf concessions and trivial adjustments from these other countries, declare it a massive victory, and retreat from his tariffs. Or, as in the case of the UK, to take a years-long series of trade status negotiations and claim that it's a deal that results from his tariffs. In fact, I think that's still a very likely outcome. Trump will eventually climb down from his tariffs, and either negotiate face-saving deals that get the US trivially little in the way of concessions from countries that know they can outlast us or just unilaterally reduce them to mitigate the pain they cause us. He'll declare it a major victory, and his supporters will echo those claims and point to his brilliance.
