”What is the impact of the new US tariffs on the customs duties imposed on each country’s exports as a whole? Estimates of the “average effective external tariff“ show that the shock remains relatively limited for the European Union and the United Kingdom. The framework agreement signed on 27 July between the EU and the US imposes a uniform tariff of 15%, incorporating pre-existing tariffs, and includes a most-favoured-nation (MFN) clause for certain strategic sectors (aeronautics, certain pharmaceutical and chemical products). The United Kingdom has agreed on a basic tariff of 10% with some exemptions, particularly for automobiles (quotas) and aerospace (0%). This will lead to an increase in the average export tariff of up to 1.5 percentage points for the EU member states most affected – Italy and Germany – while it will be limited to less than one percentage point for the majority of the 27 member states. For the United Kingdom, this increase amounts to 1.1 pp. Thus, US tariffs are more of an additional barrier to exports than a major competitive disadvantage (since all competitors are also subject to tariffs, which are often higher).”
Morten W. Langer
