Following yesterday’s news that Jonathan Reynolds is returning to a business and trade brief within Andy Burnham’s cabinet, we today bring further ministerial announcements of interest to exporters, importers and supply chain firms.
While the new prime minister’s initial policy announcements have been largely domestic so far, his foreign policy approach is set to become clearer in the coming days, with thorny issues around the US relationship likely to come up.
We also bring you the latest developments around US tariffs and the EU’s sanctions on Russia.
Burnham’s cabinet
As noted yesterday, Jonathan Reynolds will be Burnham’s Secretary of State for Business, Innovation, Science and Trade.
Anas Sarwar could be set to join him in the newly formed department, with reports that he is about to resign as Scottish Labour leader to take up a peerage in the Lords, and a minister for business or trade post is one of the positions he's tipped to take on.
Katie Dearden and Chris McDonald have also been confirmed as ministers within the Department for Business, Innovation, Science and Trade. Whether this new department will be known as DBIST or BIST remains to be seen.
Another key appointment for UK trade is that of Hamish Falconer as the new minister for international and EU relations. He replaces Nick Thomas-Symonds and will play a leading role in ongoing negotiations for the ‘reset’ of post-Brexit trading arrangements.
Burnham’s foreign policy challenges
The new prime minister has so far prioritised domestic policy announcements, as he bids to prioritise addressing the ‘cost of living’ crisis. He will likely be buoyed by today’s news that UK inflation dropped to 2.6% in June.
Internationally, he will soon need to grapple with how to handle relations with the Trump administration in the White House. Regarding Iran, Bloomberg reports that he will continue Sir Keir Starmer’s policy of allowing the US to use British bases in the Gulf for defensive strikes on Iran.
His foreign secretary Ed Miliband is expected to meet US counterpart Marco Rubio this evening, where Miliband’s previous opposition to the use of UK bases in the Middle East could be raised. The former energy secretary’s emphasis on the move to net zero and his backing of the International Criminal Court could also be thorny issues with Rubio.
Before Rubio, Miliband met with EU vice-president Kaja Kallas this morning, with the UK-EU reset, the war in Ukraine and the European response to the current geopolitical climate all likely discussion points.
The Guardian has a report on what the EU may be looking for from the new Burnham administration which is also worth reading.
EU weighs Russia sanctions and US tariff response
EU ambassadors are in Brussels today bidding to finalise the 21st Russia sanctions package.
There are challenges though, with European nations keen not to impose any sanctions that could also hurt their own economies. The Guardian’s Europe Live reporter Jakub Krupa notes that there is “growing fatigue with the sanctions amid concerns that some measures could actually pose difficult questions for some of the member states”.
EU trade envoys are also this morning being briefed by the bloc’s top trade official, Ditte Juul Jørgensen, about how it could respond to further US tariffs. The US’s temporary 10% duty rate, imposed following the spring Supreme Court ruling that Trump’s initial ‘liberation day’ tariffs were illegal, is due to expire tomorrow.
The Trump administration is looking to find alternative means to impose tariffs and has been conducting a forced labour probe into European supply chains as a possible way of legitimising further measures. The investigation, carried out under Section 301 of the 1974 Trade Act, also covers China, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, South Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan and India.
Tariffs imposed because of this probe could fall between 10 and 12.5%, according to the FT. A further investigation is also being held into excess manufacturing capacity, with findings expected later in the summer.
The White House is, however, planning to halve aluminium tariffs for businesses investing in smelting plans in the US.
Also in the trade news
· UK Export Finance has signed a Memorandum of Understanding with GE Aerospace at the Farnborough International Airshow to support financing for airlines seeking engine repairs at the defence firm’s sites in Wales and Scotland
· Also at Farnborough International Airshow, new defence secretary Wes Streeting is announcing £708m of funding for next-generation air combat technology
· New research from EY-Parthenon, reported in Global Trade Review, has found that decoupling supply chains from China could cost US$23.6tn by 2050
Yesterday in trade
· Jonathan Reynolds was named the new head of the Department for Business, Innovation, Science and Trade – you can read our updated profile and response to his appointment
· Trump imposed fresh 50% tariffs on Canada
· Houthi rebels declared intent to block Saudi ships in the Red Sea
