The Week in Trade: New US tariffs on China, Cambodian canal boost and sluggish EV adoption

Fri 10 May 2024
Posted by: Benjamin Roche

This week has seen strong words from the West aimed at China, whose president, Xi Jinping, visited Europe this week to declare his country’s partnership with Hungary an “all-weather” one, though European firms in China are reportedly feeling increasingly unwelcome.

The big picture: US president Joe Biden is due to announce a set of new tariffs on Chinese industry next week, targeting sectors including batteries, electric vehicles (EVs) and solar panels, according to Bloomberg.

The decision follows a review of tariffs imposed in 2018, during Donald Trump’s presidency. The official announcement of the measures is due on Tuesday (14 May), according to Bloomberg’s sources, though this could be subject to a delay.

Last month, Biden called for increased tariffs on Chinese steel and aluminium, while an official investigation was launched into “unfair, non-market policies and practices” in China’s shipbuilding industry by Washington. Analysts told the FT that, while it would likely do little for US shipyards, allies South Korea and Japan could benefit.

Bloomberg notes that the new measures are unlikely to affect China’s solar firms, which already avoid tariffs by exporting to the US through third countries.

Good week/bad week: Cambodia could soon benefit from a US$1.7bn upgrade to its canals courtesy of China, improving connections for shipping between the Mekong River basin and the coast, according to Reuters. It also means the country will be less dependent on shipping through neighbouring Vietnam, though there are fears that the environmental effects on the Mekong Delta region could affect areas downstream in Vietnam.

A less positive trend for EV adoption in the UK, where car manufacturers have urged the government to take measures to stimulate demand as it slows among ordinary motorists, according to reporting from the Guardian. Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said that “the absence of government incentives for private buyers is having a marked effect”.

How’s stat? 0.6% – the growth rate of the UK economy this month, following the release of new stats by the ONS today (10 May). Chancellor Jeremy Hunt called the news “encouraging”, though professor Stephen Millard of the National Institute of Economic and Social Research told the BBC that one set of positive results “cannot be seen as ‘proof’ of anything”.

The week in customs: Institute of Export & International Trade (IOE&IT) senior trade and customs expert, Anna Doherty, spoke as part of a town hall webinar on the move to the Customs Declaration Service (CDS) this week, where exporters were urged to prepare “as soon as possible” ahead of the upcoming 4 June deadline for migration.

The Department for Environment, Food and Rural Affairs (Defra) published a summary of “operational learnings and commonly asked questions” on the Border Target Operating Model (BTOM), also this week. The guidance is aimed at helping traders following the recent introduction of the latest phase of checks as part of the system, which has faced challenges following IT problems and queues.

What else we covered this week: A new Doing Business Handbook for Barbados and the Eastern Caribbean was published, offering firms advice on how to approach this growing market.

More discontent was expressed by the US over China’s high-tech industry, as the North American nation revoked licences for firms exporting advanced semiconductor technology to China for use by Huawei. The EU also made clear that it will “never hesitate” to take measures to defend its own industries, in remarks by European Commission president Ursula von der Leyen as Chinese president Xi Jinping visited Europe.

Our latest Country Trade Profile looked at Panama, its recent election and how developments in the country could affect global trade.

True facts: It’s 30 years to the day since Nelson Mandela was inaugurated as president of South Africa. Opposition parties formed an alliance in the country this week in a bid to break the 30-year majority of the African National Congress (ANC) party at the next election, which takes place later this month.