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Economy February 23, 2026

BoE’s Alan Taylor: Elevated U.S. Import Tariffs Likely to Persist, Effects to Unfold Over Years

Policymaker warns tariff shock is larger than two years ago and may influence trade flows and inflation dynamics for an extended period

By Derek Hwang
BoE’s Alan Taylor: Elevated U.S. Import Tariffs Likely to Persist, Effects to Unfold Over Years

Bank of England policymaker Alan Taylor said high U.S. import tariffs appear set to remain and that the full economic effects will likely take many years to materialize. He noted recent U.S. actions that imposed a global levy after the Supreme Court voided earlier tariffs, observed signs of Chinese export diversion to other markets with potential deflationary effects, and was part of a Monetary Policy Committee minority that voted to trim the BoE’s benchmark rate to 3.5% from 3.75% earlier this month amid concerns inflation could undershoot the 2% target.

Key Points

  • Alan Taylor of the Bank of England said elevated U.S. import tariffs appear likely to persist and that their full effects will unfold over many years.
  • After the U.S. Supreme Court voided most of last year’s tariffs, the U.S. administration used a different statute to impose a global levy first at 10% and then at 15%, which can last for five months while seeking longer-term legal fixes.
  • Taylor noted signs of Chinese exports being redirected to East Asia and the European Union, which could have deflationary consequences; he was part of a four-member Monetary Policy Committee minority that sought a cut in the BoE’s benchmark rate from 3.75% to 3.5% due to risks of inflation undershooting the 2% target.

LONDON, Feb 23 - High U.S. import tariffs look set to be a durable feature of the global trade backdrop and their ultimate impact is unlikely to be immediate, Bank of England policymaker Alan Taylor said on Monday.

Taylor made his comments at an event organised by Deutsche Bank, describing the recent changes in U.S. tariff policy and urging observers to expect the economic consequences to play out over an extended period.

"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. "So I think we should expect this shock to play out also over many years," he added.

Taylor was referring to a sequence of U.S. actions after the Supreme Court last Friday voided most of the tariffs that President Donald Trump imposed last year. In response, the administration turned to a different statute to put in place a global levy, first at 10% and then raised to 15%. That global levy can remain in force for up to five months while U.S. officials search for more permanent legal workarounds.

The BoE policymaker said there were early indications China had been redirecting some exports toward other East Asian markets and to the European Union. He cautioned that such diversion could carry deflationary implications, but that the magnitude of those effects remained hard to gauge.

Taylor was one of four members of the Bank of England's Monetary Policy Committee who favoured cutting the central bank's benchmark interest rate to 3.5% from 3.75% earlier this month. He cited, in part, a risk that inflation might in future persistently undershoot the BoE's 2% target.

Taken together, Taylor's remarks underscore his view that recent U.S. trade measures are substantial relative to the recent past and that both trade flows and domestic inflation dynamics may be affected over a prolonged horizon.

Risks

  • Uncertainty about the scale of any deflationary impact from China diverting exports to other East Asian markets and the European Union - this could affect trade-exposed manufacturing and exporters.
  • The tariff shock is expected to play out over many years, introducing prolonged adjustment risks for global supply chains and firms reliant on international trade.
  • Monetary policy divergence and the risk that inflation may persistently undershoot the 2% target could complicate central bank decisions and influence bond and currency markets.

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