LIVE MARKETS-What might reciprocal tariffs look like?

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

WHAT MIGHT RECIPROCAL TARIFFS LOOK LIKE?

U.S. President Donald Trump has promised detailed information on Tuesday or Wednesday on his reciprocal tariff plan, and Goldman Sachs, in a Tuesday note have attempted to explore some of the options.

Probably their most important takeaway is that the more plausible scenarios would only lift the average effective tariff rate by a couple of percentage points.

The first option Goldman look at is if the U.S. increases the tariff on all goods from a country by the average tariff a country applies to its imports from the U.S..

That has the advantage of being fairly simple to calculate, and would see large increases on some countries, but no change for those with which the U.S. has a free trade agreement - e.g. Mexico, Canada, and Korea.

It would net out at an average effective tariff increase of less than one percentage point, Goldman say, as while some countries could face tariff increases of over 10pp, most of those account for a small share of U.S. import volume.

India is one of the larger economies that could take a hit.

Another option is an arrangement that matches tariffs by product and country meaning high tariff rates protecting certain sensitive sectors would lead to higher U.S. rates on those particular products.

That's more complicated but possibly more attractive given Trump has long-complained about the EU's 10% tariff on auto exports, though at the macro level, Goldman see this as only leading to a two percentage point increase in the average effective tariff rate.

They think maybe a hybrid approach combining the two is possible.

Goldman's third option is whether the Trump administration might consider non-tariff barriers such as sanitary inspections, licensing, or other regulatory requirements, or maybe even VAT.

That is much harder to calculate, and seems less plausible , though would lead to a much larger tariff hike.

(Alun John)

EARLIER ON LIVE MARKETS:

GAS BOOST: UKRAINE CEASEFIRE COULD CHARGE CHEMICALS CLICK HERE

WORN-OUT INVESTORS DON'T KNOW WHAT TO DO CLICK HERE

NEW HIGHS FOR DAX AND FTSE, LUXURY UP CLICK HERE

BEFORE THE BELL: EUROPE STEADY AT PEAKS, UNICREDIT BEATS CLICK HERE

OF TRADE WARS AND (EV) PRICE WARS CLICK HERE