US tariffs take the spotlight again, with a pivotal meeting between senior US and Chinese officials set to decide whether a trade truce is likely.
The UK is also negotiating lower tariff rates on its pharmaceutical exports to the US, while NHS drug purchases from US pharma firms could be set to increase in return.
The Chartered Institute of Export & International Trade will also be celebrating trade professionals’ commitment to developing their expertise with its annual graduation ceremony later this week.
Trade war resolution?
This week will see US treasury secretary Scott Bessent meet his Chinese counterpart, He Lifeng, for a tête-à-tête that it is widely hoped will pave the way towards ending the latest US-China trade spat.
The meeting follows a successful call between the two on Friday (17 October), after which Bessent confirmed that they and other officials “will meet in Malaysia — probably a week from tomorrow, to prepare for the two presidents to meet”.
On X, he wrote that the two engaged in “frank and detailed discussions regarding trade”, which “we will meet in-person next week to continue”.
Following tit-for-tat port fees levied by each nation on the other’s vessels, and the imposition of more stringent export controls by China on all products containing even minor traces of the rare earths over which it enjoys dominance in production, the two will meet in Malaysia.
National leaders Donald Trump and Xi Jinping are already slated to meet for a summit in South Korea later this month, with reports suggesting the Bessent-Lifeng meeting could determine whether this goes ahead.
Trump has threatened an additional 100% tariff on Chinese goods entering the US. Asked by Fox Business how the new rate would affect the economy, he replied that it’s “not sustainable, but that’s what the number is”.
“It’s probably not, you know, it could stand, but they forced me to do that.”
UK-US pharma
Negotiations are ongoing between the UK and US over pharmaceutical product prices, with the NHS looking set to pay significantly more for drugs purchased from the US in exchange for cheaper exports.
While the UK is aiming for tariff-free exports, officials close to the negotiations say that the US has floated 10%, matching the rate currently levied against all UK goods exported to the US.
Speaking to the FT, one official said last week (17 October) that “we are quite close [to an agreement]”.
“There have been extensive talks over the last 10 days.”
Crucially, compared to other major exporters and US trade partners, the EU and Japan, the UK’s deal – the first to be secured by a nation with the US, post ‘Liberation Day’ – does not account for subsequent sector-specific rates, such as the 100% the US now levies on pharmaceutical products.
In theory, the 15% rates secured by the EU and Japan, should act as a cap on what the US can levy on pharmaceuticals as well as other sector-specific rates now levied on furniture, lumber and heavy trucks. However, it’s unclear whether Trump will honour this commitment.
On the topic of trade deal commitments, Trump agreed to carve outs for his US-Mexico-Canada Agreement (USMCA) partners on Friday, as 25% heavy vehicles tariffs are set to come into effect 1 November. Duties will only be applied to non-US content of the trucks, per the terms of the USMCA agreement, with parts remaining tariff-free until a methodology for tariffing non-US content is developed.
Pre-Budget forecasts and messaging
It was a mixed week of economic news for the UK last week, with positive growth predictions from the IMF and a tentatively positive September GDP reading from the ONS, offset by forecasts of high inflation moving forward.
As next month’s Autumn Budget approaches, with expectations rising that UK chancellor Rachel Reeves will break the Labour Party’s manifesto pledge not to increase taxes on workers, we’re getting indications of how the chancellor may spin the U-turn.
The BBC reports that Reeves took a stronger line on Brexit’s impact on the UK economy at an IMF meeting held last week.
In remarks published over the weekend, Reeves blamed the 2020 Brexit deal for thwarting the UK’s long-term growth ambitions, quoting the Office for Budget Responsibility’s (OBR) estimation that it has knocked 4% off growth relative to the EU.
“The UK's productivity challenge has been compounded by the way in which the UK left the EU,” she told leading finance figures, including finance ministers and central bankers from across the globe.
Those comments come before a fresh round of OBR forecasts assessing the UK’s spending and borrowing plans, which are set to be published today (20 October).
Graduation
This week (23 October), the Chartered Institute of Export & International trade is excited to welcome trade professionals who have completed UK Customs Academy qualifications or programmes from its own suite of trade and customs qualifications to London’s Mansion House for our 2025 graduation ceremony.
Graduates will cap off their studies with an afternoon of networking and prize-giving, with speeches from senior Chartered Institute figures and the City of London’s alderman and sheriff, Robert Hughes-Penney.
Chartered Institute director general, Marco Forgione, who will serve as the event’s master of ceremonies, said that the ceremony is one of the “most significant events” in the organisation’s calendar, “showcasing the next generation of global trade leaders”.
“It’s also an excellent opportunity to celebrate all our graduates’ hard work and commitment to professional excellence.”
Other dates in the diary
Monday: China’s Communist Party begins annual plenum to set out next five-year plan
Tuesday: Voting in Japan’s legislative house, the Diet, is set to confirm a new prime minister
Wednesday: The UK will host the Berlin Process Summit in London
Thursday: European Council leaders’ summit
Friday: UN 80-year anniversary
Saturday: Ivory Coast presidential election
Sunday: Formula One Mexico Grand Prix
