This week in trade saw US president Donald Trump expand his tariff plan to hit imports from the EU, while the pound sterling enjoys its most successful month since September. The FTSE experienced a small drop as mining shares take hits and our director general delivers his verdict on what Trump tariffs mean for the global order.
The big picture: Another Trumpian week for international trade.
The US president followed up on his tariff threats against the EU, hitting European imports into the US with a 25% rate. He claimed that the EU was formed “to screw the US”.
Brussels appeared relatively unphased, with agriculture commissioner Christophe Hansen saying: “We have an Anti-Coercion Instrument, and we will have to use it.”
“We will not let ourselves be bullied, not with tariffs nor with threats about our legislation,” said Bernd Lange, a German social democrat MEP and chair of the European Parliament’s international trade committee.
The US president also said he would hike rates on Chinese imports, adding an additional 10%, and confirming that measures on Canadian and Mexican goods would go ahead on 4 March.
Despite this, UK prime minister Sir Keir Starmer appears to have pulled off a diplomatic coup in his visit to Washington this week, confirming that trade talks between the UK and US had begun.
Good week/bad week: It’s been a good week for sterling, with economic data also showing that the UK economy might be doing better than initially feared. According to the FT, the pound sterling has climbed 1.7% against the US dollar and 1.3% against the Euro in February, as retail sales and GDP have reassured investors.
It’s been a bad week for the Italian economy. According to economists at ING, confidence in Italy’s service sectors fell for the second consecutive month, while manufacturing remained flat. The role of services as a driver of growth remained “essential”. Despite this, consumer confidence improved for the second time in a row. A small rise in GDP was predicted, but a flat reading would not “come as a big surprise”. Inflation also edged up narrowly this month.
How’s stat? 0.45%. That’s the fall in the UK’s FTSE 100 index today.
The Guardian reports that difficulties were concentrated to mining firms listed in the UK, including Endeavour Mining (-3.2), Antofagasta (-3%), Anglo American (-2.1%) and Rio Tinto (-2.2%), with the FTSE fairing better than stock markets across Asia, Europe and the US.
Starmer’s cordial Washington DC visit, featuring trade deal talks with Trump, is cited as having calmed the markets.
Quote of the week: “In all the talk and analysis of US trade tariffs over the last few weeks, much of the coverage seems to have focused on the noise and missed the signal.”
Chartered Institute director general, Marco Forgione, on Trump’s trade policy.
The week in customs: The Department for Business & Trade (DBT) has announced a number of changes to export controls regulations.
The Export Control Joint Unit (ECJU) has updated four open general export licenses (OGELS) to remove Rwanda as a permissible destination.
The OGELs from which Rwanda has been removed are:
· Military goods: for demonstration
· Export for repair/replacement under warranty: military goods
· PCBs and components for military goods
· Software and source code for military goods
Additionally, the ECJU updated its advice for countering Russian sanctions evasion and circumvention guidance, providing additional information on the level of risk the government is willing to accept when assessing licence applications for Common High Priority List items.
Finally, Greece has been added as a permitted destination for the OGEL in support of Joint Strike Fighter: F-35 Lightning II.
What else we covered this week: Ahead of next month’s (19 March) International Food and Drink Event (IFE), we heard from Chartered Institute expert Joseph Goldsworthy, who previewed a panel he’d be participating in on ‘Navigating Global Markets for SMEs’. Tickets to the event are available here.
There was a recap of last week’s Lunchtime Learning instalment, which featured a comprehensive breakdown of the sustainability requirements involved in Digital Product Passports from our senior digital trade and customs consultant Ilona Kawka.
We also covered fallout from Germany’s election last week, as European nations grapple with their response to defence concerns raised by the US and ongoing trade competition from China.
True facts: On this day in 1922, Egypt declared independence from the UK. Leaders of popular national party Wafd were denied the opportunity to address leaders at the post-WW1 Paris Peace Conference in 1919. Wafd’s British-imposed exile then led to a popular uprising across the country.
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