The fallout continues from the US Supreme Court decision that ruled much of US President Donald Trump’s ‘reciprocal tariff’ regime was illegal. The UK is pushing for the White House to honour the trade deal agreed last year, which is currently more favourable than the new blanket rate announced by Trump over the weekend.
Global Trade Today also looks at the latest sanctions package imposed on Russia by the UK government, which targets Moscow’s energy networks, while also analysing a pair of reports on UK Export Finance’s (UKEF) offerings and the UK’s post-Brexit regulatory environment.
Trump tariffs
The UK is pushing the US to keep to its word on tariffs, after the US Supreme Court struck down the ‘reciprocal tariff’ regime on Friday (18 February).
The Times reports that ministers are lobbying the US to stick to the 10% tariff rate that Starmer agreed with Trump last year, instead of upping the rate to the global rate of 15% he announced last week following the Court ruling.
The 10% rate came into effect from today onwards, and will last for 150 days.
Business and trade secretary Peter Kyle said he recognised the “uncertainty” caused by the decision but wanted to remain focused on protecting British businesses and was keeping “all options” on the table.
The Department for Business and Trade confirmed to Global Trade Today that Kyle had spoken to his US counterpart, Jamieson Greer, about the uncertainty and the need to honour the existing deal.
Kyle added:
“This government will continue to engage with the US, and our priority throughout will be providing clarity for businesses and protecting jobs."
Transport and logistics company FedEx has filed a lawsuit asking for a “full refund” of customs duties paid in accordance with the tariffs imposed by the US.
FedEx said in a statement yesterday (23 February) that it had "taken necessary action to protect the company's rights as an importer of record to seek duty refunds" from US customs following the ruling.
New sanctions package
The UK has announced a new sanctions package to coincide with the four-year anniversary of the Russian invasion of Ukraine.
The new measures target Russia’s ‘dark fleet’ and adds 49 entities to the sanctions list, including three nuclear companies, six operators in the Russian liquified natural gas sector and nine banks that aid in cross-border payments.
The foreign office is also promising an additional £30m in financing to aid in Ukraine’s energy resilience, following a bombing campaign that resulted in many Ukrainian civilians being left without power during the cold winter months.
“The UK has today taken decisive action to disrupt the critical financing, military equipment and revenue streams that sustain Russia’s aggression, in our largest raft of measures since the early months of the invasion,” said foreign secretary Yvette Cooper.
An EU sanctions package is said to be in the works, but has been delayed following opposition from Budapest.
Boost UKEF, says Barclays
Improvements to UKEF, the government’s credit agency, could help the UK catch up with its trading partners amid a drop in British exports, according to a new report from Barclays.
The bank’s research found that UK trade grew just 7% between 2019 and 2025, in comparison with 20% in each of the previous three six-year periods. This underperformance was particularly acute among SMEs, while the UK as whole is falling behind the rest of the world.
With UKEF gaining increased prominence under the UK’s Trade Strategy – the agency was given £80bn more in finance under the plan – it could be receiving even more capacity, the report found, with Barclays identifying a number of further issues.
Accessing finance was a major challenge for many businesses: 14% of companies surveyed said that accessing financial support was a challenge, with another 30% identifying currency risk as an ongoing problem.
“As the UK looks to strengthen its export performance, now is the right moment to explore how government can make targeted, practical adjustments that would help UK companies - especially SMEs - access export opportunities, while continuing to safeguard taxpayers’ interests”, said James Binns, vice chair of global transaction banking at Barclays.
While 79% of companies surveyed had heard of UKEF, only 27% had actually used their services, with SMEs again trailing in both categories.
Barclays identified four key areas for improvement for UKEF, including supporting smaller businesses, expanding its product suite to include foreign exchange cover, supporting more of the supply chain and improving the application process for businesses.
EU regulation
Another report has suggested that the UK has not diverged much from EU law since Brexit, with the so-called “Brexit freedoms” not producing the dividends expected.
With the current Labour government searching for alignment with Europe on many issues, UK in a Changing Europe’s latest report finds that many areas saw very little change post-Brexit.
Even though the UK might be able to create ‘nimbler’ regulation now that it’s outside the EU, doing so can impose greater administrative costs on businesses in Britain and Northern Ireland.
Instead, activity in Brussels has led to ‘passive divergence’, the report’s authors said, resulting in new technical barriers to trade with the EU.
Other news
- The Dutch government was finally sworn in yesterday following an extensive negotiation. Sjoerd Sjoerdsma is the new trade minister of the Netherlands, serving under new PM Rob Jetten
- A British company director was jailed yesterday for selling engine parts using falsified documents, receiving a four year and eight month sentence for fraud
- Politico reports that the Trump administration is looking to renegotiate the amount pharmaceutical companies can charge the NHS, prompting concerns inside the treasury about increased health spending.
Yesterday in Trade
- Uncertainty reigned over the weekend, as markets and traders reacted to the demise of the US ‘reciprocal tariff regime’
- Iran and the US prepared for another round of talks to secure a nuclear deal, just as a large section of US military is being moved towards Iran
- Hungary blocked a large loan to Ukraine, as well as the EU’s 20th package of sanctions on Russia
You can read all the news in the Week Ahead in International Trade.
