All eyes are on Beijing, as UK prime minister Sir Keir Starmer leaves “productive” talks with counterpart Xi Jinping. A visa agreement and migration-adjacent trade interventions are among major talking points.

There’s also a setback for US critical minerals projects and research suggesting EU retaliatory tariffs on the North American nations wouldn’t be in European interests.

When Starmer met Xi

Starmer’s Xi meeting yielded more warm words than tangible outcomes but reflects an ongoing shift towards closer relations with Beijing, after years of Conservative Party hawkishness.

Xi praised previous Labour governments for their “important contributions to the growth of China-UK relations”, while Starmer reported the relationship was in a “good, strong place”.

On trade, he said that progress has been made to shorten the timeframe in which China will reduce tariffs on British whisky. Currently tariffs are 10%, having increased from 5% last year.

The two leaders are expected to sign a pact aligned with the UK government’s migration targets, a political pressure point given the surge in popularity of the right-wing Reform UK Party. A deal would address intelligence-sharing on people-trafficking gangs and limiting the supply of Chinese-produced small boat engines used in Channel crossings, which Downing Street claims is around 60% of all engines.

The pair have also agreed visa-free access to China for UK citizens when visiting for under 30 days. This follows a pattern of China reducing visa restrictions on European countries in recent years.

The British delegation to China touched down yesterday, with Starmer accompanied by business and trade secretary Peter Kyle, alongside 60 representatives from British business, sport and culture.

Balancing act

The visit follows Canadian PM Mark Carney’s trip to China earlier in the month, which yielded a set of tariff reduction deals after years of ratcheting tit-for-tat levies. Carney then downplayed the possibility of a more fully fledged trade deal between the two nations following US President Donald Trump’s threat of 100% tariffs on Canada should it strike such an agreement.

Starmer is taking a more measured approach to China dialogue, saying that while it’s “vital” the UK pursues a “more sophisticated” relationship with China, that includes discussing areas where the two countries disagree.

To learn more about Starmer’s trip and his ‘tightrope walk’ to balance trade negotiations between the US, China and the EU, check out our China Trade Digest in today’s edition of Global Trade Today.

Phase in UK-EU SPS changes, firms urge

UK businesses within the food and drink sector have warned of a “cliff edge” if the government were to move towards EU sanitary and phytosanitary (SPS) regulatory alignment too quickly, the Guardian reports.

Both CropLife and the National Farmers Union have suggested that SPS changes should be phased in over the course of at least a year, but ideally longer, adding that a sudden shift towards new standards could cost British businesses between £500m and £810m per year.

CEO of industry body CropLife David Bench urged the government to introduce a “transition period” change to prevent “damaging consequences”.

“The impact of a ‘cliff-edge scenario’ on British growers could be devastating. At a time of increasing pressure on farm profitability, this could prove a tipping point for many farmers and growers.”

Having confirmed that they would enter into talks to align SPS regulation and eliminate post-Brexit border checks last year, EU and British officials began talks in London last week to realise an agreement.

US walks back support for critical mineral projects

Reuters reports that the US government may reduce support for critical mineral projects by backing out of providing price floors.

The practice of agreeing minimum prices for projects has been floated among a number of G7 nations as they attempt to counter China’s monopoly in the sector.

Industry executives told Reuters that they had been asked to prove the viability of projects without government support. Assistant secretary of the US Department of Energy Audrey Robertson allegedly told them the government isn’t there “to prop you up”, something the Trump administration denies.

Last year, a minimum price guarantee was granted to MP Materials, with officials in another closed-door meeting reportedly suggesting that other companies could also be set to benefit.

It had previously suggested it would commit to support for projects in order to boost production of advanced goods reliant on the critical minerals, such as semiconductors, defence products and electric vehicles.

The move follows Washington’s bumper rare earth deal with Canberra last year, which saw both countries committing to invest a total of US$8.5bn in a pipeline of Australia-based projects. After the story broke, shares in Australian-list Lynas Rare Earths fell by over 10%.

Retaliation rethink?

While the Greenland threat may have blown over, research suggests the EU might need to reevaluate its strategy for handling future Trump tariff threats, the FT reports.

Research from Aston University suggests that if Trump were to impose 25% tariff rates on eight European nations, as threatened last week, and they retaliated, the outcome would have been worse for Europe.

While Starmer took a diplomatic approach and spoke of non-retaliation, the EU revisited its list of €93bn worth of US products it could apply rates to, and came closer than ever to implementing its ‘trade bazooka’ Anti-Coercion Instrument.

Professor Jun Du, who led the research, said that modelling indicated the result of retaliation would have been “unambiguous” in harming European nations.

“Co-ordinated UK-EU retaliation would have produced the worst outcome for Britain, while joint non-retaliation from the EU and UK produces the smallest losses.”

All eight countries would be “worse off than if [they] absorbed the tariffs”.

The research comes as Europe postpones signing the tariff-reduction deal it agreed with the US last year.

Elsewhere in the headlines

• Concerns within the UK’s auto-sector, as vehicle production falls to a 73-year low. Leading industry body chief Mike Hawes warns European protectionism is emerging as a threat
• Gold price rises show no signs of stopping, as an ounce surpasses $5,500 for the first time