[By Guancha Observer Network, Liu Chenghui] After months of waving the big stick of tariffs, the Trump administration still hasn't come up with any trade agreement.
However, on the evening of May 7th, Trump disclosed a new trade agreement on the "Truth Social" platform. He only referred to the other party as a "respected major country," without naming them specifically.
Multiple Western media outlets reported that the country Trump was referring to was the UK.
However, unlike Trump's grandiose boasting, analysts are cautious about this agreement, believing it should not be expected too highly, because Trump mentioned a "trade deal" (trade deal) rather than a "trade agreement" (trade agreement), and there is a fundamental difference between the two.
Both U.S. and British media confirmed that an agreement will be reached between the two countries.
Trump wrote on social media: "At 10 a.m. tomorrow, there will be a major press conference in the Oval Office involving the conclusion of a major trade agreement with representatives from a respected major country! This will be the first of many agreements!!!"
The New York Times reported on May 7th, citing three sources, that Trump is expected to announce that the United States will reach a trade agreement with the UK on local time August 8th.
The report said that this would be the first agreement reached since Trump announced the "reciprocal tariff," which is a "major victory" for both the U.S. and the UK, as the two countries have been seeking closer economic cooperation since Trump's first term.
In response to the above news, a White House spokesperson declined to comment to The New York Times. A spokesperson from the UK Embassy in the U.S. also did not respond to requests for comments.
Similarly, a source familiar with government plans told CNN that this agreement will be reached with the UK.
BBC also confirmed the aforementioned statement. In an article on August 8th, BBC reported, "The U.S. and the UK are expected to announce a tariff reduction agreement today."
Trump previously postponed the imposition of "reciprocal tariffs" on most countries but retained a basic tariff of 10%, including the UK. It is believed outside that the UK was not subject to higher "reciprocal tariffs" because its imports from the U.S. exceeded its exports to the U.S.
A day before Trump made his announcement, The Financial Times reported on June 6th that the UK and the U.S. might sign a trade agreement this week. This agreement may exempt the U.S. from some non-tariff trade barriers, including the 2% digital services tax levied by the UK on U.S. tech companies. In return, the U.S. may reduce the UK's tariff burden, perhaps lowering or eliminating the 25% tariffs on UK aluminum, steel, and cars.
However, at present, it cannot yet be definitively said that the agreement will be signed. A source informed Bloomberg revealed that people are optimistic about reaching an agreement, but it is still premature to judge whether an agreement can be reached this week. A senior UK official also stated that they will not be forced to sign an agreement that does not benefit the UK just because the Trump administration is eager to announce an agreement to mitigate the impact of tariffs.
Navarro spoke at the White House on April 30th. Visual China
Recently, officials from the Trump administration hinted that the U.S. is actively negotiating with India, the UK, South Korea, and Japan. Trump's chief trade advisor, Navarro, told CNN on June 6th that he believed the UK might be the first country to sign a trade agreement with the U.S.
Navarro said, "I don't know if it will be the UK or India first; we encountered a slight hiccup in our negotiations with India, so progress there may slow down. But I can assure the American people that we will reach an agreement, and it will be a very good agreement for Americans."
Industry insiders: Don't expect too much from the agreement
Clearly, Trump administration officials are already prepared to launch a publicity campaign, but the industry's reaction is quite lukewarm.
BBC reported that Trump used the term "trade agreement," although he is vigorously promoting it, it is not the traditional free trade agreement in people's minds. It is actually more like a specific agreement to lower tariffs for certain goods, falling under the framework of small-scale agreements. There is still a lot of negotiation and legal work to be done in the coming months.
Jonathan Haskell, a former member of the Bank of England's Monetary Policy Committee, also pointed out that Trump mentioned "trade deal" (trade deal) rather than "trade agreement" (trade agreement), and there is a significant difference between the two.
He said that trade deals are limited, short-term, and localized, possibly just a commitment to "short-term policy adjustments," covering only a few projects, such as suspending specific tariffs; whereas trade agreements have long-term impacts and require comprehensive legal frameworks.
CNN analysis also noted that although the Trump administration claims to be engaged in in-depth trade negotiations with more than a dozen countries, actual trade agreements take a lot of time, usually taking years to conclude. They often involve extremely complex agreements, delving into the details of various goods and non-tariff barriers. They also frequently involve significant political considerations, as all parties try to protect voters with special interests.
On the contrary, what Trump hinted at is more likely to be a Memorandum of Understanding. This may temporarily reduce tariffs on goods from a specific country in the short term, but over a longer period, it has little effect on achieving substantive economic results.
And this is just an agreement. Trump's "reciprocal tariff" covers dozens of countries. About a hundred countries still pay a basic tariff of 10%. The U.S. government cannot complete all these negotiations within the 90-day grace period, which ends on July 8th.
Jacob Jensen, a trade policy analyst at the right-leaning think tank "American Action Forum," said, "The 90-day tariff grace period has already passed about 25%. Considering that trade agreements usually require several months to several years of repeated consultations, time is running out."
He said, "There will be a big difference between these agreements being formal written trade agreements or just verbal promises to buy more American products. The former brings long-term economic impact, while the latter may be forgotten over time."
Jensen added, "It is unlikely that the U.S. Trade Representative can negotiate up to 100 separate trade agreements within 90 days, meaning that President Trump must quickly decide whether to restore tariffs or further delay them."
CNN noted that even if the U.S. eventually reaches agreements with all countries, it cannot guarantee that Trump will abide by these agreements.
For example, Trump facilitated the "United States-Mexico-Canada Agreement" (USMCA) during his first term, but during his second term, he disregarded it and imposed 25% tariffs on some Mexican and Canadian goods. Moreover, Trump's high tariffs on almost all goods entering the U.S. have actually undermined many existing trade agreements with allies.
The New York Times noticed that Trump's remarks on May 6th again revealed his unpredictability. He downplayed the prospects of reaching trade agreements, saying that other countries need such agreements more than the U.S. does.
"Everyone keeps asking 'when, when, when are you going to sign the agreement,'" Trump said during an interview at the White House. "We don't necessarily have to sign an agreement. We could sign 25 agreements right now if we wanted to. But we don't necessarily have to sign an agreement. They need us more than we need them."
This article is an exclusive contribution by the Guancha Observer Network and cannot be reprinted without permission.
Original source: https://www.toutiao.com/article/7501976861849682469/
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