On January 19, Britain and the United States announced simultaneously that the two countries had begun formal negotiations on the tariffs imposed by the United States on British Steel and aluminum exports during the trump administration. The United States may abolish the steel tariff imposed on Britain in the future, which will also help Britain end the 25% retaliatory tariff imposed on American products, including whisky, motorcycles, jeans and tobacco. In March 2018, then US President trump imposed 25% and 10% tariffs on steel and aluminum, including the European Union, the United Kingdom and Japan, respectively, in accordance with a national security provision of the trade law of 1962.
In fact, trade disputes have always been a long-standing estrangement between Britain and the United States. Last year, the United States reached an agreement on canceling the "metal border tax" imposed on the EU. In this negotiation, the United States plans to cancel the steel and aluminum export tariffs imposed on the United Kingdom. On the one hand, the United Kingdom has officially separated from the European Union, so the additional steel and aluminum tariffs are still valid for the United Kingdom. In order to maintain the balance of policies towards the European Union and the United Kingdom, the United States and the United States need to carry out negotiations and negotiations again; On the other hand, in order to ease its high inflation rate, the United States hopes to reduce the pressure on downstream manufacturers of steel and aluminum in the United States and China.
In December 2021, US CPI increased by 7% year-on-year and 0.5% month on month, the largest increase since June 1982. This data really surprised the global financial and capital markets. Many institutions believe that the rise in U.S. prices is neither transitional nor limited to volatile items such as gasoline, which overturns the previous view of White House and Fed officials on inflation. The market is even worried that U.S. inflation will not gradually reduce as the Fed hopes, and will continue to rise sharply in the future, especially when the current epidemic situation is repeated, which intensifies the pressure on the international supply chain and directly leads to the high price data in the United States. Even if the pressure on the supply chain is relieved in the future, the tension in the U.S. labor market will be difficult to be relieved for a while, and inflation will increase with the increase of U.S. labor wages. Given that the economy is running close to full capacity, but market demand is still growing rapidly, this indicates that the United States still needs to coexist with inflation for a period.
Recently, the international steel price has started a new round of price rise, and the momentum is obvious. Approaching the Chinese New Year holiday, China's iron and steel industry has also entered the traditional off-season, but some iron and steel enterprises reflect that iron ore prices have continued to soar recently. Statistics show that the increase in the last month is close to 30%. Rising iron ore prices will push up steel prices. Secondly, after a period of low demand, the demand of European and American automobile industry has shown a recovery trend recently, resulting in the price rise of long-term cooperative cold coil and hot-dip galvanizing signed between European automobile enterprises and steel mills. In particular, it should be noted that oil and natural gas prices have risen to a new high in recent seven years, coupled with the reduction of production by some iron and steel enterprises in Europe, which has added fuel to the rising smelting prices of steel, aluminum and other metals. The rebound of relevant commodity prices is not good news for the containment of US inflation.
The market expects us inflation to rise at a high level in the future, which will seriously affect US economic recovery confidence and people's support for Biden government. At present, in addition to the Federal Reserve raising interest rates and reducing the scale of bond purchases as soon as possible, the effective way to slow down inflation may have an immediate effect by abolishing the tariffs imposed by the United States in the past few years due to provoking trade wars against some countries.
Briefly, the US government reached an agreement with the EU in October 2021 to cancel the 25% steel import tariff exported by the EU to the United States from January 1, 2022. At the beginning of the new year, Britain and the United States began formal negotiations on the tariffs imposed by the United States on British Steel and aluminum exports during the trump administration.
On January 19, President Biden acknowledged in a statement at the White House that although the US government has made some progress in slowing down the rate of price rise, it is far from enough. "We have made progress in reducing the rate of price rise. At the same time, the price rise is still too high, the family budget is still tight, and we still have more work to do".
On December 2 last year, US Treasury Secretary Janet Yellen said that the imposition of tariffs of up to 25% on Chinese goods exported to the United States worth hundreds of billions of dollars a year was one of the reasons for the rise in US prices. Of course, Yellen's words do not necessarily mean that the United States will cancel all tariffs on Chinese imports, but at a time when the U.S. economic recovery is disturbed by high inflation and a new wave of epidemic, promoting the recovery of China US economic and trade relations will help the United States slow down high inflation and may become the main option of U.S. trade policy towards China in the future.
