Whatâs Going On Here?The US announced on Thursday that itâll pause some tariffs on UK products, including Scotch whisky, clotted cream, and âbiscuitsâ â whatever they are. What Does This Mean?Europe and the US have been arguing for the best part of 17 years over the billions in illegal subsidies they each give to their own plane makers, Boeing and Airbus respectively. And since boys will be boys, theyâve been slapping tariffs on each other's products for the last couple of years to make their point.
Fast forward to January, and the UK lifted some of those tariffs indefinitely in hopes that this post-Brexit flirting might lead to better trade relations. And it seems to be paying off: the US has said itâll temporarily lift some of its own tariffs, meaning your dadâs favorite whisky can now be imported from the UK without an additional 25% duty. Why Should I Care?For markets: The UKâs biggest companies are set to benefit.
A trade bump should boost the bottom lines of those British companies that are particularly reliant on exports. So itâll come as good news for the members of the FTSE 100, which â as part of an index of the countryâs most valuable public companies â make on average three-quarters of their sales outside the UK.
The bigger picture: Even the smaller companies canât keep a stiff upper lip.
While the members of the FTSE 100 stand to benefit from an uptick in global trade, those in the FTSE 250 â an index tracking the next 250 biggest companies â are more interested in Britainâs own economy. And with the UK ahead of the curve in the vaccine rollout, a robust recovery is looking more and more likely â leaving the Brits feeling uncharacteristically optimistic about the future. | 