- GBP/USD may lose the Earth as China is scheduled to be exposed with a 10 % tariff on the plane on Tuesday.
- Trump said on Monday afternoon that the talks with China would likely take place within the next 24 hours.
- Traders expect that they will reduce the average of 25 basis points on Thursday amid signs of slowdown in inflation in the United Kingdom.
GBP/USD continues to get a floor for the second consecutive round, and about 1.2430 trading during the Asian hours on Tuesday. The couple improved amid improved feelings of dangers after US President Donald Trump announced late on Monday that he would stop the tariffs on Mexico and Canada.
However, market fluctuations are still a concern, as investors closely monitor developments in the ongoing tariff negotiations. President Trump stated that he would suspend a sharp tariff on Mexico and Canada after their leaders agreed to deploy 10,000 soldiers on the American border to combat drug trafficking. The customs duties were postponed on Mexico and Canada for at least 30 days.
The decision to postpone the customs tariff comes just two days after Trump imposed a 25 % tariff on Mexican and Canadian goods and 10 % tariffs on imports from China. China is scheduled to be exposed with a comprehensive tariff starting at 05:00 GMT on Tuesday. However, Trump said on Monday afternoon that the talks with China will be “perhaps over the next 24 hours.” He also said: “If we cannot make a deal with China, the definitions will be very large.”
The US dollar index (DXY), which measures the value of the US dollar (USD) for six main currencies, settle around 108.70 at the time of writing this report after abandoning most of its gains in the previous session. However, optimistic US economic data can provide some support for Greenback. ISM Manufacturing PMi rose to 50.9 in Jan from 49.3 in December. This reading came in the best estimate of 49.8.
The bullish side of the GBP/USD pair can be restricted because the GBP pound may face risks due to expectations that the Bank of England will restart its cycle in satisfying policies, which probably reduces interest rates by 25 basis points (BPS) to 4.5 % Thursday.
Traders expect a position on the Bank of England amid signs of slowdown, although wage growth in the United Kingdom (UK) accelerates. The Monetary Policy Committee (MPC) is expected to vote 8-1 in favor of reducing a quarter of a point to 4.5 %, and one member is likely to defend the current prices of another meeting.
Customs fees are common questions
Customs duties are useful customs duties on some imports of goods or a category of products. Customs duties are designed to help local producers and manufacturers to be more competitive in the market by providing the price feature on similar goods that can be imported. Definitions are widely used as fever tools, along with commercial barriers and import shares.
Although customs tariffs and taxes generate government revenues to finance public goods and services, they have many differences. Customs duties are pre -paid in the entry port, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, while customs duties are paid by importers.
There is a school of thought between economists regarding the use of definitions. While some argue that definitions are necessary to protect local industries and address commercial imbalances, others see them as a harmful tool that can push prices up in the long term and lead to a harmful commercial war by encouraging customs tariffs.
During the period before the presidential elections in November 2024, Donald Trump explained that he intends to use the customs tariff to support the American economy and American producers. In 2024, Mexico, China and Canada accounted for 42 % of the total imports of the United States. During this period, Mexico emerged as the best source with $ 466.6 billion, according to the American Statistical Office. Thus, Trump wants to focus on these three countries when imposing definitions. It is also planned to use the revenues created by definitions to reduce personal income taxes.
