The EU has failed to approve its trade deal with the US after hours of talks between the three major European bodies, despite the threat of fresh automotive tariffs from the White House. However, European officials remain steadfast in their commitment to the agreement and insist “good progress” was made during the negotiations.
In the UK, the government is hailing a digital trade trial as “groundbreaking”. The government said a pilot of paperless systems had “significantly reduced processing times” and demonstrated the potential for digital trade to reduce compliance costs for UK exporters.
US-EU deal stalled
The EU has failed to finalise its US trade deal during a series of trilateral talks between representatives from the EU Parliament, European Council and European Commission (EC). Cyprus, which holds the EU’s rotating presidency, said that no conclusive decisions were reached at the meeting.
The European Parliament’s chief negotiator Bernd Lange said “good progress” had been made on the safeguard mechanism and evaluation of the main regulation, but added “there is still some way to go”.
Safeguards include a 'sunset' clause to end the tariff preferences by 31 March 2028 and an option to suspend the deal in the event of "US threats to the essential security interests of the EU or its Member States".
MEPs introduced these safeguards into the agreement when it passed through the EU Parliament in March, but they require approval from all three European institutions.
EC Trade commissioner Maroš Šefčovič had pushed for approval, but talks failed after six hours of negotiations.
US Ambassador to the EU, Andrew Puzder, speaking before the European talks concluded, warned that US President Trump could impose tariffs on European car imports into the US.
Puzder told BloombergTV yesterday (6 May) that the EU’s failure to implement the deal was the reason behind Trump’s threat of 25% tariffs, accusing the EU parliament of “dragging its feet” and saying that the European side had done “nothing” in the nine months since the agreement was formed.
He said that the tariffs could come in “soon”. Prior to the meeting, EC President Ursula von der Leyen said that the EU was “prepared for any scenario”, while insisting that “a deal is a deal” and the US should honour the agreement.
Paperless trade trial ‘success’
The government has claimed that a “groundbreaking” trial of paperless systems has significantly reduced processing times in a trial led by the Department for Business and Trade (DBT).
DBT said that the trial had reduced administration costs for businesses, with time spent on trade processes reportedly “slashed”.
“Under the pilot, documentary credit checks performed by banks – which commonly take up to ten days – were reduced to just one hour, paving the way for wider rollouts of the technology and complementing the UK’s digital trade corridor programme, also under way with France and Germany,” DBT said in its press statement.
Ilona Kawka, senior digital trade and customs consultant at the Chartered Institute of Export & International Trade, said the UK was at an “important stage” of the drive for digitalisation.
“We need to run pilots to build trust in technology and prove that digitalisation of trade is the way forward to support the reduction of costs associated with the movement of goods.
“Digital trade corridors are just one of the ways we can show how end-to-end digital cross-border movement is not just easier to execute, but also cheaper in both the short term and the long term.”
Minister for the digital economy Liz Lloyd said that the pilot proved “how digital trade can deliver real, tangible benefits for UK exporters – helping businesses move goods faster and with greater confidence,” hailing the government’s work with partners in Japan, France and Germany.
Trade digitalisation has been a priority for several successive UK governments. In September 2023, the Electronic Trade Documents Act (ETDA) entered into force and gave paperless documents the same legal status as their paper counterparts. Then-minister for the digital economy Paul Scully said this would save businesses an estimated £1.1 bn over the next decade.
China wary on sanctions
China has asked its banks to temporarily halt lending to five refiners that have been sanctioned by the US government.
Bloomberg reports that the Chinese National Financial Regulatory Administration has verbally asked banks to review their exposure to firms including Hengli Petrochemical (Dalian) Refinery Co, citing anonymous sources.
The informal directive clashes with China’s commerce ministry's public stance that domestic companies should ignore US sanctions, issued in a directive published this month (2 May).
The US has issued additional sanctions related to Iranian oil since the beginning of its war with the Middle East nation. The US Office of Foreign Assets Control (OFAC) has blacklisted various companies across the Iranian energy supply chain, including a China-based “independent teaport refinery” Hengli Petrochemical (Dalian) Refinery Co.
Senior US officials, including treasury secretary Scott Bessent, have threatened Chinese banks with secondary sanctions if they were found to be supporting Iran’s oil trade.
Other news
- Trump has insisted on a “swift” end to the conflict in the Middle East, despite senior Iranian officials calling the US peace proposal “more of an American wish-list than a reality”
- Ukraine has accused Russia of breaking a ceasefire, with Ukrainian President Volodymyr Zelenskyy stating that Russia had yesterday launched “brutal strikes against our cities and communities”. Both countries separately declared ceasefires earlier this week
- Costa Rica is set to become the next member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), according to a joint press release from the 12 member states, following the conclusion of negotiations
Yesterday in Trade
- The King’s Award for Enterprise winners were announced, with three Chartered Institute members winning in the international trade category
- Traders should be confident in their data, said Chartered Institute Customs Practice director Anna Doherty, as HMRC ramps up compliance enforcement
- The Brent Crude benchmark fell to US$106 per barrel over hopes that the Middle East conflict might end
You can read those stories and more here.
