Political and business leaders gathered in Switzerland this week for the annual Davos World Economic Forum.
Newly minted 47th president Donald Trump was in attendance (remotely). Energised by tariff threats levied at Mexico and Canada, he had harsh words for attendees unwilling to buy more US goods.
Elsewhere this week, the Chartered Institute of Export & International Trade has been busy preparing traders for upcoming regulatory changes, with a webinar on the EU’s Digital Product Passports and a member-only session on Safety & Security declarations – more on that below.
Big picture: Many of the world’s leaders met at the World Economic Forum in Davos, Switzerland. Despite the international flavour of the meeting, the newly inaugurated President Trump appeared to have set the agenda.
Before the US president took the stage, other international figures were setting out their stall. European Commission president Ursula von der Leyen launched a Global Energy Transition Forum, while UK chancellor Rachel Reeves urged investors and business to invest in Britain.
Trump took the stage yesterday (23 January), promising to hit non-US countries with trade measures if they did not buy more US goods and calling for deregulation. It’s been less than a week since he stepped up to the 47th presidency, but already the tariff threats have come thick and fast.
Mexico and Canada, threatened with 25% tariffs prior to the elections, were told they can expect measures to come into effect from 1 February.
China, threatened with a 10% levy earlier this week, could face a reprieve, as Trump stated earlier today that he “would rather not” impose tariffs. While nobody can be confident this is a U-turn, markets were certainly pleased, with non-dollar currencies and Chinese shares rallying.
Good week/bad week: Jonathan Reynolds attended Davos for the first time in his business and trade secretary role.
While the UK government continues to dodge the issue of US tariffs, with a case for why it should be spared already in the works, there were promising signs for EU-UK cooperation.
Reynolds wasn’t as quick as Nick Thomas-Symonds to dismiss EU trade commissioner Maroš Šefčovič’s suggestion that the UK would be welcome to join the Pan-European-Mediterranean (PEM) Convention, saying his EU counterpart’s comments were “incredibly positive” and “helpful”. He also acknowledged that the PEM “is not a customs union”, and therefore doesn’t cross the Labour government’s “red line” on economic integration.
However, it wasn’t all good news for EU-UK trade relations, as the two parties are set to enter the courtroom over a trade dispute, the first such legal battle time since the Trade and Cooperation Agreement came into force in 2021.
At the centre of the storm is the sand eel – a small, silver fish, enjoyed as prey by other marine animals, and sold primarily to be used in animal feed or fish oil products – which the UK banned other vessels from fishing in the North Sea.
The BBC reports that the Hague’s Permanent Court of Arbitration, a dispute resolution body, will hear the case from Tuesday (28 February), with a panel of three mutually-agreed international trade judges set to deliver a ruling by April at the latest.
Beyond trade sparring, the outcome could have some significant environmental ramifications, as Charles Clover, co-founder of the Blue Marine Foundation, told the Independent:
“If this arbitration decision goes the EU’s way it is likely to lead to France challenging trawling bans in all our offshore marine protected areas and also challenging our fisheries management plans.
“That would be a most depressing outcome and would remove most of the green gains from Brexit at a stroke.”
How’s stat? 50.9. That’s the S&P UK output PMI for the month of January, defying expectations to rise 0.5 above December’s figure and reach a 3-month high.
The boost was largely driven by services sector growth (51.2), which offset a decline in manufacturing output (49.3).
Despite the good news, ongoing concerns about the UK job market were still raised in the report, as “new work fell at the fastest pace since October 2023”.
The week in customs: Traders have yet to begin submitting safety and security (S&S) declarations for EU imports ahead of 31 January, at which point the practice becomes mandatory.
This was the key takeaway from this week’s Lunchtime Learning webinar, in which Imports Advisory Practice lead Ilona Kawka demystified S&S declarations and answered attendee questions.
She also urged traders to begin submission as soon as possible to be prepared and to iron out any kinks in the process now.
Quote of the week: “Airports are essential to driving UK trade growth, not only in terms of goods exports but also – as our report with Flint Global shows – in supporting UK services exports, which form around 80% of the UK economy.
“We would also urge the government to invest in growing the UK’s wider infrastructure system, including road, rail and ports, to keep up with the huge investment taking place around the world".
Chartered Institute general director Marco Forgione, in response to government plans to expand Heathrow and Gatwick, due to be announced by the government next week.
What else we covered this week: Members can review expert opinion into what the government’s recently launched AI plan could mean for the country’s industrial strategy, in a tech-focused Trade Insights.
We return to Trump with a review of what his trade policy could mean for a host of global commodities, including oil, lithium and green energy. That’s in this week’s Commodity in Focus.
There’s also a compilation of Chinese trade news, with an in-depth look at the future of TikTok in the US.
True facts: On this day in 1946, the UN General Assembly passed its first ever resolution, establishing the Atomic Energy Commission with Resolution 1 as part of Session 1. The commission was later disbanded six years later, as the impending Cold War made cooperation on nuclear matters difficult.
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