A seismic week in trade has seen the confirmation of a second Trump presidency, as European policymakers raise alarms about the possibility of tariff hikes and trade disputes.
Against that bleak picture, there’s been renewed trade talks between the UK and South Korea, the Chartered Institute of Export & International Trade has been revving up for the Department of Business and Trade’s (DBT) International Trade Week next week and foreign secretary David Lammy has been back-pedalling on his previous Trump comments.
The big picture: The week has been dominated by Donald Trump’s second US election victory. The president-elect was declared the winner just a day after the polls opened, besting Democratic candidate and vice president Kamala Harris in the popular vote and with a decisive 301 electoral college votes (at time of writing). Only Arizona and Nevada are yet to be called for either candidate.
Commentators have been poring over the potential implication for UK-US trade, with Politico reporting concerns voiced by big UK exporting industries, including food and drink sectors and car manufacturers, in the face of Trump’s pledges for a 20% flat tariff rate on all imports into the US.
Amid the election fallout, UK prime minister Sir Keir Starmer travelled to Budapest yesterday (7 November) for the European Political Leaders’ Summit. Discussion of how best to continue supporting Ukraine’s defensive efforts against Russia, given Trump’s plans to ‘end the war’ quickly if elected, are expected to headline talks.
Good week/Bad week: DBT announced that the UK and South Korea are restarting with talks to negotiate and “upgraded” trade agreement.
Initiated under the previous Conservative government, a press release said that negotiators will seek to add “modern digital provisions” to the existing agreement, supporting the UK’s growing digital economy and building on the £17bn in bilateral trade recorded in the year to June 2024.
The statement also noted that 7,000 UK businesses already export goods to Korea, 85% of which are SMEs.
DBT secretary Jonathan Reynolds said that he welcomes talks which will give “UK businesses more opportunities to sell their excellent goods and services around the world”.
“Both the UK and South Korea are renowned as global leaders in technology. Our high-tech economies have so much more we can do together once our trade deal is upgraded.”
Not a great week for Germany. In addition to an impending electing after chancellor Olaf Scholz ended his party’s tenuous coalition, the German economy is also showing signs of weakness.
Reuters reports that exports fell by 1.7% in September, while industrial output fell 2.5%. The publication spoke to Capital Economics’ senior Europe economist Franziska Palmas, who said:
"The further fall in industrial output in September underlines that the crisis in industry will be one of the many issues the any new coalition government will have to deal with."
How’s stat? 12.7%. That’s the increase in Chinese year-on-year exports recorded in October.
The FT reports that the country’s export-led economy went into overdrive ahead of a potential second Trump presidency.
With that possibility now realised, the nascent recovery of China’s economy, following a generous government stimulus package last month will be thrown into doubt, as fears grow that the US president-elect will follow through on plans for a 60% flat tariff on all Chinese imports when he returns to office in January.
The week in customs: A delay to the digitalisation of the UK’s border, as the implementation of the Single Trade Window – a singular portal through which traders can manage all customs-related administration – was pushed back again.
The portal, which was already delayed from its October introduction date until January 2025, won’t be rolled out until at least 2026.
Costs were cited as the key concern, with the Guardian reporting that James Murray, the exchequer secretary to the Treasury, telling Parliament on Tuesday (5 November):
“In the context of financial challenges, the government … [is] pausing delivery of the UK Single Trade Window in 2025-26.”
Quote of the week: “If you put a 20 per cent universal tariff on goods entering [the US], then it instantly becomes a very challenging market for us here in the UK and there are absolutely concerns about the implications of such a move.
“It would seem likely that there would be a response from the UK government and the truth is that nobody would win from getting involved in a tit-for-tat exchange of tariffs.”
The Chartered Institute’s director general Marco Forgione, speaking to the Independent about the impact a second Trump presidency could have on UK-US trade.
What else we covered this week: We have a member-exclusive Trade Insights feature from the Chartered Institute’s UK public affairs lead Grace Thompson, considering what last week’s budget could mean for UK trade and future economic growth.
We had another instalment of our Lunchtime Learning webinar series yesterday (7 November), with Chartered Institute expert Ray Burgin updating members on the latest trends in export controls and how you can ensure your firm trades compliantly. It appears to have been a timely reminder, as HMRC announced fines for a further four companies found to have breached export controls or the UK’s sanctions regime against Russia.
We also previewed our participation in the upcoming International Trade Week (11-15 November), which includes attendance at three Digital Trade Roadshows. Experts will offer insight into how technology, such as AI, can optimise supply chains, as well as how businesses can scale their brand to boost access to global markets.
True facts: DBT announced on X, formerly Twitter, that Brunei has ratified the UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a trading bloc of 11 nations. The UK’s inclusion in the agreement is set to come into force this December.
So far, Japan, Singapore, Vietnam, New Zealand, Chile and Peru have also ratified the UK joining, with Australia, Canada, Malaysia and Mexico anticipated to follow suit by the end of 2025.
The Chartered Institute will be holding a public webinar on CPTPP with DBT on 13 November, examining how UK exporters can make the most of the agreement. You can still sign up here.