It’s been a difficult week for the UK economy, as US tariffs took a chunk out of UK-US trade and GDP fell by more than expected. However, better trade news was issued from within the UK this week, as intense US-China talks in London appear to have yielded results, with diplomats set to announce a roadmap to end trade tensions.
The big picture: UK goods exports to the US fell by £2bn in April, the largest monthly decrease since records began in 1997, and hitting their lowest value since February 2022. According to the Office for National Statistics (ONS), this follows four successive months of growth for the UK-US trade economy. As reported previously by the Daily Update, this is likely the impact of traders front-loading their exports.
The ONS said that the movement should be treated with caution, as monthly data can be erratic. However, it added that the fall was “likely linked to the introduction of trade tariffs on goods imported into the US.” President Donald Trump is reportedly posed to sign off on parts of the Economic Prosperity Deal (EPD) that was agreed last month, which would lower tariffs on certain UK products, but negotiations are said to be ongoing.
The news also comes as the ONS found that the UK’s GDP fell last month by 0.3%, following a gain of 0.2% in March. Part of the fall was due to a significant fall in legal activities, which was attributed to a rush to beat a deadline on stamp duty on house purchases.
Although the contraction in April follows three months of growth, it raises difficult questions for chancellor Rachel Reeves only a day after her spending review. Conservative leader, Kemi Badenoch, attacked Reeves for a “spend now, tax tomorrow approach”, while the chancellor insisted that everything was paid for by the “difficult decisions” she has already made.
Good week/Bad week: It’s been a good week for trains and rail-freight. After Reeves confirmed she was pumping money into regional transport systems, the German government also announced billions of Euros worth of investments into railway. Only weeks ago, European freight operators warned the new federal transport minister, Patrick Schnieder, that moving goods across Germany was becoming increasingly complex and costly.
It’s been a bad week for the Spanish government. Prime minister Pedro Sánchez has been forced to dismiss a top aide and apologise to the nation after corruption allegations. This latest development is the latest in a string of allegations against high-ranking members of the socalist administration, as well as his own wife. All parties deny wrongdoing and Sánchez survived a no-confidence vote. However, with the Dutch parliament voting for October elections, could we see another pair of crucial European votes shift EU politics once more.
The week in customs: HMRC has made a trio of announcements about the Customs Declaration Service (CDS).
On Saturday (14 June), HMRC is introducing a change to CDS and the Goods Vehicle Movement Service (GVMS). The government says that the changes will allow goods that meet specific conditions to leave a location different to the one declared, without requiring the submission of a new declaration.
As part of the same update, traders will no longer need to contact HMRC to generate a Cash Account Dashboard report for more than 5,000 transactions.
Finally, an update to the API within CDS will improve the way the system displays data for different types of declarations.
Also, as covered in our latest Customs Corner feature, the third phase of the Northern Ireland Retail Movement Scheme (NIRMS) is due to be rolled out on 1 July.
How’s Stat: 98%. That’s how much the cost of Asia-US West Coast freight rose last week, according to the Freightos Baltic Index. This equates to an average price of US$5,488 per 40-foot equivalent unit.
Quote of the week: “The challenge now is delivery. Our members will be watching closely as the government develops its Industrial, Trade and Small Business Strategies to make sure these announcements become real opportunities.”
Chartered Institute of Export & International Trade director general, Marco Forgione, on the government’s Spending Review.
What else we covered this week: We covered the news that China-US trade slumped significantly as the tariff war bit into exports and imports from both nations. However, a framework for de-escalating tensions was agreed after “candid” discussions in London.
Our Latin American digest covered how French president Emmanual Macron was urged to “open his heart” to the EU-Mercosur trade deal by his Brazilian counterpart, Luiz Inácio Lula da Silva.
Customs and trade experts also gave exclusive tips on how best to work with Incoterms at a webinar early this week.
True facts: On this day in 1967, US president Lyndon Johnson nominated Thurgood Marshall as the first ever black justice of the Supreme Court. A former solicitor general, appellate judge and civil rights lawyer, Marshall would go on to write a number of landmark judgements and dissents on free speech, defendants’ rights and civil rights, with some regarding him as one of the most important jurists of the 20th century.
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