LONDON, Feb 23 (Reuters) - High U.S. import tariffs appear to be here to stay and their full impact is likely to take "many years" to be felt, Bank of England policymaker Alan Taylor said on Monday.
BoE’s Alan Taylor: Elevated U.S. Tariffs Likely to Persist for Years
Outlook for U.S. Tariffs and Global Spillovers
LONDON, Feb 23 (Reuters) - High U.S. import tariffs appear to be here to stay and their full impact is likely to take "many years" to be felt, Bank of England policymaker Alan Taylor said on Monday.
Supreme Court Ruling and New Global Levies
After the U.S. Supreme Court on Friday voided most of the tariffs President Donald Trump imposed last year, Trump used a different statute to impose first a 10%, then a 15% global levy that can last for five months while his administration searches for more durable workarounds.
Why Tariffs May Persist
"I think the fundamental thing to realise is those tariffs are here to stay at some kind of number that is a lot – an order of magnitude - bigger than it was two years ago," Taylor said at an event organised by Deutsche Bank.
Long Timeline for Economic Effects
"So I think we should expect this shock to play out also over many years," he added.
Potential Deflationary Effects in Europe
Trade Diversion to East Asia and the EU
Taylor said there were some signs that China was diverting exports to elsewhere in East Asia and the European Union, with potential deflationary consequences, but that it was hard to know how significant the impact would be.
BoE Policy Context and Rate Vote
Taylor was part of a four-strong minority on the BoE's Monetary Policy Committee who sought to cut benchmark interest rates to 3.5% from 3.75% earlier this month, partly because he saw a risk that inflation could in future persistently undershoot its 2% target.
(Reporting by William Schomberg; writing by David Milliken; Editing by Kate Holton)
