Bank of England’s Taylor says high U.S. tariffs appear to be here to stay
#US tariffs#Bank of England#Alan Taylor#Donald Trump#Trade policy#Inflation#Monetary policy#China exports
📌 Key Takeaways
US tariffs expected to remain at significantly higher levels than two years ago
Full impact of tariffs likely to take 'many years' to be felt
China diverting exports to East Asia and EU, potentially causing deflationary effects
Taylor was part of minority on BoE's MPC seeking to cut interest rates
📖 Full Retelling
Bank of England policymaker Alan Taylor stated in London on Monday, February 23, 2026, that high U.S. import tariffs appear to be permanent and their full economic impact will likely take 'many years' to materialize. This assessment comes after the U.S. Supreme Court last week invalidated most of the tariffs President Donald Trump had imposed the previous year, prompting Trump to implement a 10% global tariff that later increased to 15%, which can remain in effect for five months while his administration seeks more permanent solutions. 'I think the fundamental thing to realize 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 emphasized during a Deutsche Bank-organized event, warning that the economic shock from these measures will unfold over an extended period. The policymaker noted that China was already redirecting its exports to other regions in East Asia and the European Union, potentially creating deflationary consequences in global markets, though he acknowledged the difficulty in determining the ultimate significance of this shift. Taylor was one of four minority members on the Bank of England's Monetary Policy Committee who recently advocated for reducing benchmark interest rates from 3.75% to 3.5%, partly due to concerns that inflation might persistently fall below the central bank's 2% target in the future.
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Deep Analysis
Why It Matters
High U.S. tariffs will shape global trade flows and inflation dynamics for years, influencing central bank policy decisions worldwide. The persistence of these tariffs adds uncertainty to economic forecasts and could pressure the Bank of England to adjust interest rates to maintain its inflation target.
Context & Background
U.S. Supreme Court voided most of President Trump's tariffs, but a new 10-15% global levy was imposed
Bank of England MPC minority seeks to cut benchmark rates to 3.5% from 3.75%
China is diverting exports to other East Asian and EU markets, potentially creating deflationary pressure
What Happens Next
The Bank of England may continue to lower rates to counteract inflation risks while monitoring the long‑term impact of U.S. tariffs. Global trade patterns will likely adjust as firms seek alternative suppliers, and further U.S. tariff adjustments could occur depending on political developments.
Frequently Asked Questions
Why are U.S. tariffs expected to stay high?
Trump used a different statute to impose a 10-15% global levy that can last for five months, and the policy is likely to remain at a high level for many years.
How might this affect the Bank of England's policy?
The BoE may cut rates to mitigate the risk of inflation undershooting its 2% target, but persistent tariffs could push inflation higher, complicating policy decisions.
What is the impact on China?
China may divert exports to other East Asian and EU markets, which could create deflationary pressure in those regions.
Original Source
try{ var _=i o; . if(!_||_&&typeof _==="object"&&_.expiry Gold prices rise on fresh Trump tariff jitters; Russia sold holding in January Five things to watch in markets in the week ahead Trump’s 15% global tariff; Waller to speak; oil drops - what’s moving markets U.S. stock futures drop on Trump tariff turmoil; Nvidia earnings in spotlight (South Africa Philippines Nigeria) Bank of England’s Taylor says high U.S. tariffs appear to be here to stay By Reuters Economy Published 02/23/2026, 07:22 AM Updated 02/23/2026, 07:25 AM Bank of England’s Taylor says high U.S. tariffs appear to be here to stay 0 LONDON, Feb 23 - 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. 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. "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. "So I think we should expect this shock to play out also over many years," he added. 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. 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.
