Another day, another round of Trump tariffs – this time on furniture and lumber. There’s also an update on US export controls that has riled China, a warning to the UK’s chancellor on business costs amid inflationary pressures and a call for a probe into the conduct of major drug firms.
Fresh Trump tariffs
After the announcement yesterday that US President Donald Trump would slap a 100% levy on films made overseas, he has also announced a 10% tariff on imports of timber and lumber, as well as on their “derivative products”.
There is also a 25% duty on kitchen cabinets and upholstered furniture as part of new duties set out by the White House.
The Trump administration contends that “present quantities and circumstances of wood product imports are weakening our economy”, leading to “persistent threats of closures of wood mills and disruptions of wood product supply chains”. As wood is an “essential input” across a range of industries, it argues that there is a need for tailored protectionism in the sector.
Canadian lumber is likely to suffer in particular, according to David Elstone of Canadian consultancy Spar Tree Group. He told the FT that he “would expect Canadian sawmill curtailments to start being announced if markets don’t improve”.
US export controls
China has expressed fury at new US export controls on the tech sector, calling them “extremely malicious” in remarks reported by CNN Business.
New restrictions aim to prevent major Chinese manufacturers in the sector from avoiding controls by moving their goods through “affiliates of listed entities”, according to the US Department of Commerce’s Bureau of Industry and Security. Jeffrey Kessler, under secretary of commerce for industry and security, said his department “is closing the loopholes and ensuring that export controls work as intended”.
Beijing, however, warned the US to “stop its unreasonable suppression of Chinese companies”. The affected companies include tech giant Huawei, semiconductor manufacturer YMTC and drone manufacturing firm DJI.
Inflation up
UK shop price inflation has hit a 19-month high, the British Retail Consortium (BRC) has reported.
The BRC stated that shop prices had increased 1.4% year-on-year in September, after a rate of 0.9% in August. Food inflation remained unchanged at a 4.2% inflation rate.
BRC chief executive Helen Dickinson said that inflationary pressures were now spreading “beyond food”, particularly in DIY and gardening products, as “increased labour and energy costs” weighed on a variety of industries.
The data comes after chancellor Rachel Reeves hinted at possible tax rises in November’s Budget, with Dickinson adding:
“While retailers continue to absorb higher costs as much as possible and deliver value to customers, any further tax rises in the upcoming Budget would keep shop prices higher for longer. Ultimately, it is British households who will bear the consequences – positive or negative – of the chancellor’s decisions.”
Drug investment accusation
Three non-governmental organisations (NGOs) have sent a letter to the Competitions and Markets Authority (CMA) calling for an investigation into what they allege is “anti-competitive” behaviour in the pharmaceutical sector.
Politico, which has seen the letter, reports that it claims “a number of companies, in partnership with their representative trade body, the Association of the British Pharmaceutical Industry (ABPI), have been making and timing their actions and announcements in a coordinated manner to align business strategies for anti-competitive purposes”.
Pharmaceutical giant AstraZeneca has paused plans for a £200m expansion of its site in Cambridge and cancelled those for a £450m plant in Liverpool. Other major firms in the space, including Meerck/MSD and Eli Lilly, have also publicly paused or cancelled major investments into the UK.
One anonymous British official concurred with the letter, saying that the announcements appeared “very coordinated from the outside”. The ABPI has fiercely rejected the allegations, arguing that, while it “has repeatedly warned successive governments that without urgent action, companies would face little choice but to close their doors and move elsewhere”, the “very serious and unsubstantiated assertion” is “without foundation, and is categorically untrue”.
The NGOs that issued the letter – the Balanced Economy Project, Just Treatment and Global Justice Now – have called for an investigation and claimed that the firms are aiming to pressure the government into allowing increases in the cost of medicines in the UK.
Other news in the headlines
· The Labour Party conference continues in Liverpool, with prime minister Sir Keir Starmer set to deliver a speech that will set out the “hard path” of “renewal” he envisions for the country
· Moldova voted to hand its pro-EU government another term over the weekend, rejecting opposition parties more friendly to Russia
· China’s factory activity contracted for a sixth straight month, according to new manufacturing PMIs
Yesterday in trade
· Chancellor Rachel Reeves indicated she may break her party’s promise not to raise income tax at last year’s election as her November Budget comes into view
· Chartered Institute of Export & International Trade director general Marco Forgione, plus Customs Practice director Anna Doherty, were recognised for their work in nominations for the Purpose Coalition’s ‘Purpose Power List’
· The latest State of the Environment report from the European Environment Agency found the continent’s natures faces continued “degradation, overexploitation and biodiversity loss”
You can read those stories here.
