Once again uncertainty reigns in trade and geopolitics, as businesses grapple with what US President Donald Trump’s latest tariff threats could mean for their supply chains and officials assess the strength of US trade deals completed last year.
Elsewhere in Global Trade Today’s weekly look-ahead, another round of nuclear talks between Iran and the US take place amid increasing military pressure from Trump and the EU struggles to secure its 20th round of sanctions against Russia as its invasion of Ukraine reaches four years.
Renewed tariff threats
First and foremost on traders’ minds this week will be how Trump’s new global tariff will impact supply chains.
Following the US Supreme Court’s 6-3 ruling that his reciprocal tariff regime is not legal, the US president threatened to impose first a 10% global tariff, then settled on a 15% worldwide levy – the highest that can be set under the 1974 Trade Act, which enables him to introduce the trade measures for 150 days.
The move spooked markets today (23 February), as the dollar dipped and investors sought safe harbour in gold.
Those in the financial sector lamented increased uncertainty, which has plagued the business community since Trump’s return to office last year.
Jeffries economist Mohit Kumar told the FT “we don’t really know what the tariff situation will be in six months’ time”, which could reduce investment into the US and further weaken the dollar.
In the UK, the move has raised questions over the reliability of the 10% deal struck last year and whether this will protect businesses from facing new, elevated rates.
US trade representative Jamieson Greer said yesterday (22 February) that deals completed last year between the US and partners including the UK, EU and Japan would be honoured in an interview with CBS.
“We want them to understand these deals are going to be good deals. We’re going to stand by them. We expect our partners to stand by them.”
For more insight into the legality of Trump’s latest tariff manoeuvres, what this could mean for existing deals and the businesses reliant on them, you can read our latest Trade Insights feature.
Iran-US talks
Another round of Iran-US talks to secure a nuclear deal are slated for Thursday (26 February) in Geneva.
Despite last week’s discussion being described as positive, this week’s talks will be held as a growing US naval arsenal moves towards Iran.
Trump was described as “curious” as to why Tehran hasn’t yet agreed to place curbs on its nuclear programme by his special envoy Steve Witkoff.
Speaking to Fox News on Saturday, Witkoff said the president is “curious as to why they haven't ... I don't want to use the word 'capitulated,' but why they haven't capitulated”.
“Why, under this pressure, with the amount of sea power and naval power over there, why haven't they come to us and said, 'We profess we don't want a weapon, so here's what we're prepared to do'? And yet it's sort of hard to get them to that place."
Trump threatened to strike Iran if a deal wasn’t reached and has sent military assets, including the world’s largest warship, to the region.
Throughout the talks, Tehran has continued to insist a deal can be done. Foreign Minister Abbas Araghchi expressed hopes that a “win-win” outcome could be achieved yesterday, having also said in previous days that Iran would share a draft agreement with the US.
Following attacks by Israel over 12 days last year, Iran’s nuclear capacity was reduced. The country claims its programme is “peaceful”, while the US maintains it’s continuing to enrich uranium beyond the 60% needed for civil uses.
Russia sanctions setback
Tomorrow (24 February) marks the fourth anniversary of Russia’s invasion of Ukraine, a date the EU is now likely to be marking with a challenge to its 20th package of Russia sanctions.
Hungary is blocking the legislation, which also includes a €90bn loan to Ukraine.
Péter Szijjártó, Hungary’s foreign minister, said on Sunday that “until Ukraine resumes oil transit to Hungary and Slovakia via the Druzhba pipeline, we will not allow decisions important to Kyiv to move forward”.
The pipeline supplies oil to Hungary and Slovakia and was damaged during Russian bombing in January, according to Ukrainian officials.
Providing an update on the issue, EU foreign policy chief Kaja Kallas struck a pessimistic note, saying “there is not going to be progress today”.
“We have heard some very strong statements from Hungary, … I don’t really … see they are going to change this unfortunately today.”
Chartered Institute events
For trade professionals keen to gain the latest practical insight on sanctions and controls, the Chartered Institute’s next Export Controls Special Interest Group will be held on Wednesday (25 February).
Members can sign up to the online event here for the opportunity to discuss the latest trends and challenges with sector experts and peers.
Later in the week, members can also learn more about the EU’s upcoming changes to its ‘de minimis’ customs exemptions with a Lunchtime Learning webinar on the topic.
Elsewhere in the headlines
- HMRC released a statement on the jailing of a company director for attempting to export military‑grade night vision rifle sights to Hong Kong without an appropriate licence. Steven Gates received a sentence of two years and one month, earlier in February
- Parliament’s Business and Trade Committee will examine the role of trade envoys in the wake of Andrew Mountbatten-Windsor’s recent arrest and the ongoing police investigation into alleged misconduct while acting as UK trade envoy
Other dates in the diary
- Monday: Valerii Zaluzhnyi, Ukrainian Ambassador to the UK, delivers a speech in London on the future of the war in Ukraine
- Tuesday: Trump delivers his State of the Union address to US Congress
- Wednesday: Gorton and Denton by-election
- Thursday: CBI service sector survey
- Friday: Funeral for US civil rights leader Jesse Jackson
- Saturday: Israeli PM Benjamin Netanyahu and US secretary of state Marco Rubio reportedly to meet in Jerusalem
- Sunday: Argentinean president Javier Milei speech to Argentine congress
