"The Trump administration often justifies steep tariffs as a tool to force partners to remove hidden obstacles to trade. For investors who saw agreements to lower these barriers as a way to end the trade war, this week's deal with Britain isn't encouraging.
On Thursday, Washington said "the U.K. will reduce or eliminate numerous non-tariff barriers that unfairly discriminated against American products." The result is that U.S. ethanol producers could gain $700 million in sales, and exporters of other agricultural products, including beef, $250 million.
In return, the U.K. secured sector-specific tariff relief, including the removal of steel duties and a cut in auto tariffs, to 10% from 25%, that essentially covers all current U.K. car exports to the U.S.
Looking ahead to coming trade deals, it is concerning Trump didn't budge on his baseline 10% tariff even though the U.S. runs a small trade surplus with the U.K.
One key reason may be that, for all the fanfare, nontariff barriers haven't moved much. Britain isn't changing its food standards -- U.S. meat will still need to clear U.K. rules against hormone-treated beef and chlorinated chicken.
Pending future negotiations, the U.K. won't modify its digital-services tax on big technology firms, nor open healthcare markets to American providers.
To be sure, details are scarce and talks will continue. The point, though, is that nontariff concessions are painstakingly difficult to achieve even in prolonged negotiations, because they often reflect deeply entrenched cultural, political and bureaucratic preferences.
When it comes to the EU, let alone China, agreeing to fast, sweeping non-tariff policy changes will be a tall order.
The flipside is that investors should expect elevated tariffs to stay in place." [1]
1. EXCHANGE --- Heard on the Street: Tearing Down Trade Barriers Is a Challenge --- Sweeping 'non-tariff' reforms will take time. Sindreu, Jon. Wall Street Journal, Eastern edition; New York, N.Y.. 10 May 2025: B12.
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