Senior US officials have said that they might consider longer tariff ‘truces’ with China, as both sides prepare for negotiations on Beijing’s latest restriction of its critical minerals exports.
Also in today’s trade news, the UK has targeted Russia’s energy sector in its latest sanctions package, the EU has backed Spain against US threats of additional tariffs over Spanish military spending and new figures indicate the UK grew slightly last month.
Deal over Chinese minerals?
US treasury secretary Scott Bessent has hinted at the possibility of longer pauses for import duties on Chinese goods, if Beijing halts its planned controls on critical minerals, as reported by Bloomberg.
Since June, peace within the trade war between the US and China has relied on rolling 90-day truces.
“Is it possible that we could go to a longer roll in return? Perhaps. But all that’s going to be negotiated in the coming weeks,” Bessent told a press conference in Washington DC.
Last week, China announced it would not allow the export of rare earth minerals for use by foreign militaries and imposed other export restrictions on the flow of technology and skills involved in minerals production.
UK trade deficit widens and GDP grows
The UK trade deficit widened in the three months to August, expanding by £1.7bn to £5.2bn according to the Office for National Statistics (ONS), as exports fell by more than imports.
Exports to the US continued to fall, with a £0.7bn drop last month. Similarly, the UK imported £0.5bn less American goods in August.
The ONS also found that the UK economy returned to growth last month, as GDP increased by 0.1%.
However, the ONS also revised down last month’s figures to a 0.1% decline. Previously, the agency had estimated that the UK economy had experienced no growth.
EU backs Spain over Trump
The EU has said it would respond “appropriately” if the US imposed tariffs against a member state, after President Donald Trump threatened to hit Spain with additional measures if Madrid didn’t meet its NATO commitment to 5% military spending.
Olof Gill, the EU’s trade spokesperson, said that “we will respond appropriately, like we always have, to any measure aimed against one or more of our member states”, according to Spanish news agency EFE.
“I'm very unhappy with Spain. They're the only country that didn't raise up their number to 5 percent. Every other country in NATO raised up to 5 percent,” Trump told reporters at the White House yesterday. He suggested that Spain should be expelled from NATO as a result.
Spanish prime minister Pedro Sánchez has previously vowed to raise military spending. Ministers in his government, such as defence minister Margarita Robles, said that Spain has been a “responsible NATO ally of forty years”.
New Russia sanctions
The UK has revealed more sanctions against Russia, this time targeting the Russian energy sector.
The foreign office said it has added 90 new sanctions measures, primarily targeted at Russian energy exports. Russian oil companies Rosneft and Lukoil are some of the primary targets of the new measures, as are several Chinese oil terminals and 44 ships in the so-called Russian ‘shadow fleet’.
Foreign Secretary, Yvette Cooper said:
“At this critical moment for Ukraine, Europe is stepping up. Together, the UK and our allies are piling the pressure on Putin - going after his oil, gas and shadow fleet - and we will not relent until he abandons his failed war of conquest and gets serious about peace.”
Other news
· Ahead of the budget, chancellor Rachel Reeves is in Washington DC today for meetings of the International Monetary Fund and G7 finance ministers, as well as a Ukraine roundtable
· Bloomberg reports that Russian exports of refined fuels have fallen to their lowest levels since the start of Russia’s illegal invasion of Ukraine
· The UK government has published the witness statements in the collapsed China spying case
Yesterday in trade
· Reeves said that her team was looking at measures to further boost growth, while also considering “tax and spending”
· HMRC is improving its Online Trade Tariff tool and invited interested companies to complete a survey to send their thoughts
· The US introduced a 25% duty rate for kitchen cabinets, lumber and other furniture, as Trump hints that Chinese cooking oil is next in his sights
You can read all of yesterday's trade news, here.
