Finance
Bank of England's Taylor says high U.S. tariffs appear to be here to stay
Published by Global Banking & Finance Review®
Posted on February 23, 2026
2 min readLast updated: February 23, 2026
Quick Summary
BoE MPC member Alan Taylor says elevated U.S. tariffs are likely to stay and their full impact will take years. He sees possible China trade diversion to East Asia and the EU and backed a UK rate cut on below‑target inflation risks.
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)
Key Takeaways
- •BoE MPC member Alan Taylor says elevated U.S. import tariffs are likely to remain and play out over many years.
- •After the U.S. Supreme Court’s Feb 20, 2026 ruling voided most prior tariffs, the White House moved to a 10% then 15% temporary global levy under a different statute.
- •Taylor notes early signs of China diverting exports to East Asia and the EU, which could have deflationary effects, though the scale is uncertain.
- •He was among a minority on the MPC seeking to cut Bank Rate to 3.5% from 3.75% this month, citing risks of inflation undershooting the 2% target.
- •The tariffs shock is expected to ripple through trade, prices and growth over a multi‑year horizon.
Frequently Asked Questions about Bank of England's Taylor says high U.S. tariffs appear to be here to stay
1What is the main topic?
Bank of England MPC member Alan Taylor argues that elevated U.S. import tariffs are likely to remain and that their full economic impact will take many years to unfold.
2What recent legal change affected U.S. tariffs?
On Feb 20, 2026, the U.S. Supreme Court voided most of last year’s tariffs. The administration then imposed a temporary global levy—first 10%, later 15%—under a different statute.
3How could tariffs affect global trade and prices?
Taylor sees signs of China diverting exports toward East Asia and the EU, which may prove deflationary. However, he cautions that the magnitude and duration are uncertain.
4What was Taylor’s stance on UK interest rates?
He joined a minority on the BoE’s MPC seeking to cut the Bank Rate to 3.5% from 3.75%, citing the risk that inflation could undershoot the 2% target in the future.
