The Day in Trade: Reynolds returns to cabinet with business and trade in newly expanded portfolio, Trump imposes 50% tariffs on Canada

The Day in Trade: Reynolds returns to cabinet with business and trade in newly expanded portfolio, Trump imposes 50% tariffs on Canada  

The new cabinet brings an old face, as Jonathon Reynolds returns to lead an enlarged business and trade department, while a pair of Starmer-era trade ministers are sent to the backbenches. 

Away from politics, the US has announced more tariffs on Canada and Houthi rebels look to have restarted disruption in the Red Sea. 

New cabinet  

Andy Burnham’s first day as prime minister was a busy one for international trade, as he shook up the cabinet and announced his first policies. 

Jonathon Reynolds returns as trade chief, leading a beefed-up Department for Business, Innovation, Science and Trade. Former minister for the old Department for Business and Trade (DBT) Peter Kyle has returned to the backbenches. 

Director general of the Chartered Institute of Export and International Trade, Marco Forgione, congratulated Reynolds on his return, while also saying it was important that trade “doesn’t become sidelined in this new larger department”. 

Other major appointments include John Healey as chancellor, Ed Miliband as foreign secretary and Wes Streeting as defence minister. Angela Rayner will return to her old position as housing minister, while UK-EU relations chief Nick Thomas-Symonds is out. 

Former trade minister Sir Chris Bryant has been promoted to the full cabinet, now serving as the Northern Ireland secretary, while Alex Norris has become justice secretary, having previously been border minister. 

Burnham also made his first announcements, pledging to remove VAT from household electricity bills, while confirming that he had had his first call with US President Donald Trump. 

Trump threatens Canada again 

The US has said that it is intending to hit Canada with more tariffs. 

According to a White House factsheet, the White House plans to impose 50% of tariffs on Canada, this time citing Canadian measures on American imports of automotives, dairy and alcoholic drinks. 

“While the Administration continues to secure fair and reciprocal trade deals with our trading partners, Canada, unlike other partners and allies, continues to retaliate against the US for its efforts to rebalance trade and protect U.S. industry in national-security sensitive sectors,” said US trade representative (USTR) Jamieson Greer. 

He added that Canada had given “better market access” to the EU for automotive imports. The White House also accused Canada of halting the purchase and retailing of US alcoholic beverages and imposing quotas on American car and dairy imports. 

Canadian PM Mark Carney said that this threatened Canadian sovereignty as he decried “unilateral US trade actions” 

“These include tariffs on the Canadian auto sector, in violation of [USCMA]. Canada, as is its right, has merely matched those measures.” 

Carney also said that he would “intensify” discussions over coming weeks. 

The US, Canada and Mexico have been negotiating the possible renewal of the USCMA trade agreement in recent weeks, which has endured a troubled last few months with Trump voicing his displeasure with the deal despite being the major force behind its creation. 

The White House also announced that it was “adjusting” the regime for aluminium imports, encouraging more domestic production. 

US-Iran war 

The Houthi rebels have announced that they will block Saudi shipping at the Red Sea gateway. 

According to the AP reporting, Houthi military spokesperson, Yahya Saree, said that the blockade against Saudi transport moving through the Red Sea will be effective immediately, describing it as an “equation of ‘an eye for an eye’”. 

It is not immediately clear how the embargo would work, but during the height of the Red Sea crisis, Houthi forces attacked commercial shipping passing through the Suez Canal indiscriminately. 

“This marks a significant escalation in the regional maritime security environment,” said Joshua Hutchinson, managing director of intelligence and risk at Ambrey. 

The Red Sea is a crucial avenue for oil shipments, particularly since the start of the Iran-US war. Sources told Reuters that this could drive oil prices higher, but that certain ‘workarounds’ could limit this jump.