As the US and EU countries continue to negotiate the Transatlantic Trade and Investment Partnership (TTIP), another stumbling block has arisen in the form of increased US tariffs on imported goods. The British Pound (GBP) is one of the areas where these new tariff rules will have the most effect.
Although this has been in the works for some time, the latest developments are the result of the UK’s decision to leave the European Union and its inability to secure full access to the single market. As a result, some European partners have decided to implement protective tariffs against the importation of EU goods. This has raised the currency value of the British Pound, and consequently raised the prices of goods such as groceries and other basic necessities.
The price of almost everything we buy is affected by rising costs, including the British Pound. In fact, many people are reporting an increase in grocery bills as they try to offset the increased costs of their products.
If you live in the UK and use the British Pound, it is likely that you feel that increased protectionism from European countries has impacted on your finances. If so, then the recent news of increased US tariffs on imported goods should be worrying and perhaps even trigger a move towards the British Pound in the months ahead.
It may not seem like much, but the loss of confidence in the strength of the currency is often felt across the globe. If the Pound falls, this puts downward pressure on the value of all currencies, including the US Dollar. Therefore, it is important that you are aware of how increased US tariffs can affect your finances.
Because there is so much uncertainty surrounding new tariffs, it is always best to remain fully informed. To start with, there are four main types of tariffs that are in place.
Firstly, there are ‘anti-dumping’ duties on certain items of manufacture, including shoes, handbags, clothes, electronic articles and textiles. The aim of these duties is to prevent the importation of goods below the equivalent level of quality that would normally be expected.
These types of tariffs can also apply to goods imported from other countries, although they may not actually lead to further duties on the goods in question. For example, the Vietnamese government imposed anti-dumping duties on computer parts from several countries, and this led to an increase in the value of the Vietnamese Dong.
New duties can also be levied on goods that would be considered to be luxury goods, such as baby food and luxury fashion accessories. For example, the French are concerned about the importation of materials used to make designer clothing, which have now become more expensive.
Finally, local taxes can also be imposed. With the introduction of similar tariffs in other EU countries, tax authorities in Belgium and the Netherlands have announced that they intend to raise taxes on a range of imported goods to counter the effects of increased protectionism.
As a result, local taxes can have an impact on the cost of food, wine and clothing. In addition, some local businesses have reported an increase in customersswitching to other countries due to increased local taxes.
By being aware of the types of new tariffs, you should be able to make an informed decision about whether or not you should go for the British Pound in the event that your favorite currency is impacted. As such, it is vital that you know exactly what type of tariffs you are facing before you decide which currency to use.