- EUR/GBP, Trump’s words higher as it increases optimism in alleviating trade tensions.
- The European Commission is preparing retaliation tariffs up to 25% of US exports.
- Monetary expansion expectations have strengthened, the markets are now completely priced at a rate cut in May.
EUR/GBP continues to accelerate upwards for a session on top of the fifth place on Wednesday, which is close to 0.8600 in Europe. US President Donald Trump pointed out his desire to negotiate with international partners and increased his hopes to increase trade tensions, developing the sense of global trade by developing the sense of global trade. US Treasury Secretary Scott Bessent added to optimism and revealed that about 70 countries have reached to discuss tariff measures.
In spite of optimistic tons, the European Commission (EU) is preparing retaliation tariffs up to 25% of US exports, up to 25% of €. In a recent debate with Chinese Prime Minister Li Qiang, the President of the Commission Ursula von Der Leyen proposed a “negotiated decision” for “widespread deterioration” caused by US tariffs.
In addition, dovish expectations for the European Central Bank (ECB) may be above the euro. Policymakers, including Piero Cipollone from Italy, François Villeoy de Galhau of France of France and Yannis Staurnaras of Greece, pointed to more monetary mitigation support. On Friday, before an important meeting of the Euro zone financial ministers in Warsaw, Sournaras stressed that new tariffs will not remove an expected April deduction from the rail and the first year will not predict a potential of 0.3 – 0.4% in the Euro region GDP.
The upper part of the EUR/GBP cross can be limited as the Pound Sterling (GBP) has found support from gilded efficiency and 10 years of yield progresses around 4.66%. While the US tariffs pose a risk, the UK’s 10% exposure and the potential to replace corrupted suppliers can pillow the impact. The British government expects the GDP effect to be less than 0.1%.
Meanwhile, expectations were fired for Bank of England (Boe) ratio interruptions. The markets are currently fully pricing at a rate of 50% earlier in May and foresees three deductions by the end of 2025.
Tariffs FAQ
Tariffs are certain goods imports or customs duties received in a product category. Tariffs are designed to help local manufacturers and manufacturers to be more competitive in the market by providing a price advantage compared to similar goods that can be imported. Tariffs are widely used as means of protectionism together with trade barriers and import quotas.
Although tariffs and taxes create government income to finance public goods and services, they have several distinctions. Tariffs are paid at the entrance harbor and taxes are paid during purchasing. While taxes apply to individual taxpayers and enterprises, tariffs are paid by importers.
There are two schools of thought among economists about the use of tariffs. While some claim that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that can increase the higher prices in the long run and encourage the schedules of the Simsekkara for taste.
During the presidential elections in November 2024, Donald Trump clearly stated that he plans to use tariffs to support the US economy and American manufacturers. In 2024, Mexico, China and Canada formed 42% of total US imports. According to the US Census Bureau, Mexico came to the fore as the best exporter with $ 466.6 billion. Therefore, Trump wants to focus on these three countries while applying a tariff. It also plans to use income from tariffs to reduce personal income taxes.
