The EU is in the spotlight in today’s ‘Day in Trade’, with an expansion of its Carbon Border Adjustment Mechanism (CBAM) ahead of the levying of duties commencing in early 2026.

There is also a boost for UK students, who will gain expanded access to study in the bloc as part of the Erasmus+ scheme, which the UK will rejoin in 2027, the government has today announced.

Next phase of TSS

First, though, a significant announcement for businesses moving goods between Great Britain and Northern Ireland.

It has been announced that Danish digital transformation firm, Netcompany, will be delivering the next phase of the Trader Support Service (TSS).

The Chartered Institute of Export & International Trade will be part of an “ecosystem of partners” collaborating with Netcompany on this.

You can read our full report of the announcement here.

UK rejoins Erasmus+ scheme

The government has announced the UK will rejoin the Erasmus+ scheme, which allows university students to study abroad in the EU.

The EU and UK have set out a “major package of agreements” today that include the UK’s association to the programme in 2027, as well as movement on “energy integration and trade”. The UK government says that over 100,000 people in the UK “could benefit from the scheme in the first year alone” via training and education opportunities.

EU relations minister Nick Thomas-Symonds said the deal is “about more than just travel”:

“It’s about future skills, academic success, and giving the next generation access to the best possible opportunities. Today’s agreements prove that our new partnership with the EU is working.”

The cost of joining the programme for the UK comes in at £570m, 30% less than the price usually paid by non-EU states. The government has not yet set out what will happen to the Turing scheme, which replaced Erasmus+ in 2021 following the UK’s formal withdrawal from the EU.

EU strengthens carbon levy

The European Commission has set out plans to expand CBAM to cover washing machines and imported car parts.

Under CBAM, fees will soon be imposed on the import of goods including steel, cement, fertiliser and other products. It is designed to level the playing field for domestic EU firms, which already pay duties on their carbon emissions, by evening out the costs of emitting and preventing ‘carbon leakage’.

The new measures proposed by the Commission also include a “default” emissions value that could be used by the EU to assess the levy on a country’s products if foreign companies are thought to be under-reporting emissions.

Pinsent Masons partner Totis Kotsonis told Reuters yesterday that the “success of CBAM” is reflected in the “changed behaviour” of trading partners including China and India, which have been developing their own carbon border levies in response.

Auto movement

The European Commission has also announced a change to its approach on the decarbonisation of the automotive sector, with a new ‘automotive omnibus’ bill that aims to “enhance competitiveness by saving costs”.

The omnibus bill will deliver a “targeted amendment” to CO2 emissions standards for heavy-duty vehicles (HDVs).

Manufacturers will need to “comply with a 90% tailpipe emissions reduction target” from 2035, while “the remaining 10% emissions will need to be compensated through the use of low-carbon steel Made in the Union, or from e-fuels and biofuels”.

This, the Commission says, will mean “plug-in hybrids (PHEV), range extenders, mild hybrids, and internal combustion engine vehicles” will still “be able to play a role” past 2035.

The UK government has committed to accelerating its own review of electric vehicle (EV) sales targets today too, bringing forward the beginning of this work to next year rather than 2027.

UK inflation dip

Some unexpected news on the UK economy today, as the consumer price index (CPI) rate of inflation took a larger-than-anticipated dip to 3.2%, beating the 3.5% predictions of economists in a Reuters poll.

The number, published by the Office for National Statistics (ONS), is an eight-month low, and reflects lower food and clothing prices. Markets are increasingly pricing in an interest rate cut as a result of the numbers.

Chancellor Rachel Reeves said British families would "welcome this fall in inflation", adding that “getting bills down is my top priority” in remarks reported by the BBC.

Elsewhere in the headlines

·       There have been a range of changes to Open General Export Licences (OGELs), including on technology for dual-use items, where a condition has been added requiring the entry of a licence reference into the UK’s customs declaration system

·       The government published new statistics on the UK’s security exports in 2024, where the total value was £12.9bn, a 16.6% increase on 2023, with cyber security the main driver of growth

·       US president Donald Trump has ordered a “blockade” of sanctioned oil tankers entering or leaving Venezuela, which has pushed up oil prices, in what the Venezuelan government has called a “grotesque threat”

Yesterday in trade

·       The UK signed an updated trade agreement with South Korea in what prime minister Sir Keir Starmer called a “huge win for British business”

·       The US suspended the ‘Tech Prosperity Deal’ it signed with the UK earlier this year over a “lack of progress from the UK in lowering trade barriers”

·       There were reports of progress on a Russia-Ukraine peace deal, with Trump claiming “we’re closer now than we have ever been” on achieving an end to the war

You can read these stories and more in yesterday’s Day in Trade feature here.