A big week for tariffs, as US president Donald Trump signed a critical minerals agreement with Japan and moved towards a more permanent trade truce with China.
Elsewhere, key UK manufacturers could be set for a reduction in energy costs, and the Chartered Institute of Export & International Trade is excited to provide a new industry-recognised standard for customs intermediaries to showcase their skills and expertise.
Big picture: Trump’s Asia tour yielded a de-escalation of trade tensions with China, as he met Chinese president, Xi Jinping, in South Korea this week during the APEC summit.
Although not formal deal has been done yet, Trump hailed the talks between the two a “great success”, claiming that the US would reduce tariffs on China by 10% – halving the 20% rate applied because of China’s supply of chemicals linked to fentanyl production.
Beijing is also now set to defer stringent export controls on rare earths, which are used in a number of defence and tech products, for at least a year.
Trade expert, Lars Jensen, highlighted that the announcements constitute an extended truce, rather than a definitive end to the trade war.
“Overall, this does point to some de-escalation in the trade war between US and China, but there is not necessarily a long-term certainty of the trade environment given that some of these agreements are 1-year only.”
Speaking to the BBC, Kelly Ann Shaw, economic adviser to Trump during his first term, said that both nations are “going in different directions” and that talks are ultimately about “managing the breakup in a way that does a limited amount of damage”.
“But this is not a relationship that is necessarily going to improve dramatically anytime soon.”
Good week/bad week: As rare earths remain a point of US-China tension, the US-Japan critical minerals deal marks another success for Trump this week.
Japan was also pleased to secure a new market for its nuclear technology, while Trump also touted military purchases made by Japan.
Chinese export curbs are certainly hitting EU manufacturers. The Guardian reports that industry body the European Automobile Manufacturers’ Association (ACEA) warned that several European carmakers will be forced to halt production due to a shortage of semiconductor chips.
“Assembly line stoppages might only be days away. We urge all involved to redouble their efforts to find a diplomatic way out of this critical situation,” ACEA director general, Sigrid de Vries, said.
How’s stat? £420m. That’s how much the UK government says it will save businesses in electricity costs per year, through support offered as part of its industrial strategy.
The Department for Business and Trade says that 500 of the UK’s most energy intensive businesses will make savings from next April, with firms in key sectors such as steel, cement, glass, and chemicals set to receive discounts of between 60 and 90%.
Business and trade secretary, Peter Kyle, said that “British industry deserves a level playing field – and this government is delivering it”.
“We’ve heard businesses loud and clear, and this landmark support will help them stay competitive on the global stage so they can invest and grow here in the UK.”
Chartered Institute director general, Marco Forgione, said that “this positive intervention by government will protect jobs, help grow exports and encourage overseas investment into the UK”.
Quote of the week: “The old world of steady expansion of rules-based liberalised trade and investment, a world on which so much of our nations’ prosperity – very much Canada’s included – is based, that world is gone.”
Canadian prime minister, Mark Carney, speaking at the APEC summit in South Korea. Trump abruptly halted trade talks with Canada last week, following an anti-tariff television campaign run in Canadian province Ontario.
The week in customs: Key updates this week include progress towards the use of the Import Control System 2 (ICS2) to submit entry summary (ENS) declarations, with a Trader Integration Micro Service (TIMS) enabling the submission of notifications for GB-NI roll-on/roll-off freight expected soon.
We’re also days away from the launch of our new Approved Customs Practitioner standard for those working as customs intermediaries. This is a chance for customs professionals to demonstrate their expertise and experience, with verification from the Chartered Institute.
What else we covered this week: The Dutch elections delivered a return to the centre, as liberal D66 surprised with the most votes. You can read our member-exclusive election explainer here.
We also had updates on the Carbon Border Adjustment Mechanism and EU Deforestation Regulation from Chartered Institute expert Joseph Goldsworthy.
True facts: With Halloween upon us, it’s worth noting that the celebration’s icon – the pumpkin – is a highly traded commodity, with Mexico and Spain being the world’s top suppliers and US serving as the world’s biggest export market.
