The velocity of the zigzags in Trump trade mayhem is remarkable. No one expected US peace in our time at the Geneva talks with China at the weekend, but what emerged is better than predicted.
Just over a month after ‘Liberation Day’, the core tariff conflict between the US and China is far less toxic.
Treasury Secretary Scott Bessent, the grown up in the room in Washington, reached an accord which reduces the extra tariffs imposed on China this year to 30 per cent from 145 per cent. China is cutting them from 125 per cent to 10 per cent.
The People’s Republic still faces a 30 per cent tariff imposed before April 2, including the penalties aimed at Fentanyl. Pre-existing levies on electric vehicles, steel and aluminium remain in place.
The changes should bring a smile to America’s kids since 80 per cent of toys come from China.
More broadly, the 90-day pact should repair damage to the ‘Magnificent Seven’ – important to UK investors through investment trusts such as Scottish Mortgage.
Pharma fight: Donald Trump holds up an executive order aimed at reducing the cost of prescription drugs and pharmaceuticals
In Trumpland, there is rarely a free lunch. A notable absence from Britain’s much trumpeted VE-day trade deal was big pharma.
Life sciences are a core strength for Britain and the US President’s executive order seeking to cut domestic prescription prices by 30 per cent to 80 per cent is a source of anxiety. Trump says that all he is doing is ‘equalising’.
America’s best lever for action is government-sponsored healthcare for elderly and less well-off Americans – Medicare and Medicaid – which account for a chunky 20 per cent of the market.
The US’s fractured health system has led to consumers paying prices that can be triple those in other developed countries with ‘middlemen’ taking a chunk.
History is not on Trump’s side. When he sought to limit the pricing power of big pharma in his first term, he was knocked back by the courts.
A narrower initiative by Joe Biden, aimed at Medicare, lowered the price of ten widely used drug treatments. Nevertheless, it is a shot across the bows, and pharma groups should be prepared for battle.
There is a possibility that negotiated deals with individual firms, such as AstraZeneca and GSK, eventually will be rolled into wider trade agreements.
Trump’s shock-and-awe trade and pricing strategies have impaired business and economic confidence. If the trade deals seen so far reduce uncertainty, that, in the view of Bank of England deputy governor Clare Lombardelli, is ‘very, very good news’.
Let’s hope so.
Pig headed
Each time a trade deal is signed, the response from Britain’s farm lobby is predictable. Don’t violate the UK’s high food standards.
The UK public is fed intensive pro-farm messages through broadcasts such as Countryfile, Farming Today and The Archers, where currently an animal welfare raid on an abattoir is portrayed as betrayal.
This weekend’s Mail on Sunday exposé of cruelty on a Cranswick pig facility in Lincolnshire shows we never know what happens behind the farm gate.
The rigorous standards required by the UK’s biggest grocers, Tesco and Sainsbury’s – both of which cut ties with the Cranswick supplier concerned – clearly are not good enough.
Cranswick shares were on a lick ahead of revelations of abuse. The farm at the centre of the scandal represents less than 1pc of the output controlled by the company.
But one should never underestimate reputational damage. Repairing the 7.1 per cent fall in the shares will take time.
Pensions U-turn
Neglect of UK shares by British long-term pension funds and insurers has been shaming.
It has made it easy for overseas predators and private equity to snaffle up tech innovators such as Arm Holdings, Deep Minds and Darktrace, and heritage firms such as the Royal Mail.
It can only come as a relief that 17 of Britain’s biggest savings providers finally have signed up to the Mansion House Accord promising to devote 10 per cent of defined contribution funds to private markets.
By acting now, the firms seek to pre-empt any effort by Labour to direct investment strategies. Pity that just half the cash designated is heading for Britain. The US, after all, can take care of itself.
This article was originally published by a www.dailymail.co.uk . Read the Original article here. .