Fresh tariff threats from US President Donald Trump against the EU end the week, after key Brussels institutions failed to agree on how to implement last year’s trade deal with the US.
Another setback to Trump’s tariff regime and further pushes to diversify critical minerals also featured in the week’s trade headlines, while elsewhere Chartered Institute of Export & International Trade members were among those celebrated in this year’s Kings Awards for Enterprise.
Big picture: The week in trade has been dominated by increasing US-EU trade tensions.
As talks between the European Commission (EC), Parliament and Council reached an impasse earlier on Wednesday (6 May), Trump escalated last week’s threat of 25% tariffs on EU automotive imports into the US, setting an Independence Day (4 July) deadline by which the EU must ratify the deal.
After a phone call with EC President Ursula von der Leyen, Trump said he had given Brussels until “our Country's 250th Birthday or, unfortunately, their Tariffs would immediately jump to much higher levels".
The deal agreed last year lowered US tariffs on EU goods to 15%, from the 30% Trump threatened that summer, with EU tariffs on US industrial goods dropped.
A majority of MEPs approved the deal, while also introducing safeguards to ensure the US kept its side of the bargain, such as accepting zero-tariff US imports on the condition that 50% tariffs on European steel and aluminium were dropped.
Von der Leyen insisted Brussels was making "good progress" ahead of the Independence Day deadline, with another round of talks set for 19 May.
Good week/Bad week: A better week for South Africa-US relations, as the latter sets its sights on the former as its next partner in critical mineral diversification.
Officials from both countries met in Johannesburg on Wednesday for discussions on bilateral investments in mining, energy and infrastructure, according to FT reports.
Last year, the US signed a deal with Australia to bolster critical mineral cooperation, signing off on projects worth US$8.5bn. These deals come amid the US’ bid to diversify its critical mineral supply chains from China.
South Africa holds an estimated 80% of the world’s platinum reserves, and is also rich in other minerals like manganese, chromium, vanadium and lithium, which are essential for the manufacture of goods like electric batteries.
The topic of critical mineral diversification also featured when G7 trade ministers met on Wednesday. They also discussed long-standing challenges, such as Chinese industrial overcapacity.
In a joint statement released afterwards, the ministers noted the potential for “economic coercion” that export restrictions on critical minerals presents.
They pledged to “work together with partners to reduce critical dependencies and ensure that attempts or threats to weaponize economic dependencies will fail”. Strategies proposed in the statement included “trade-related instruments such as quotas and price floors”.
Amid fresh EU threats, there were setbacks for Trump’s tariff regime this week as the US Court of International Trade ruled that his second attempt at implementing a blanket 10% tariff rate on imports was illegal.
After the US Supreme Court struck down his use of the International Emergency Economic Powers Act (IEEPA), his administration turned to Section 122 of the Trade Act 1974.
Politico reports that two out of three judges ruled against the legality of the government collecting revenue from Washington state and the two companies who took their claim to the court.
Other companies can now use the precedent set by the ruling to seek similar relief from the 10% import tariff. The White House is expected to appeal the decision.
How’s stat? £11bn. That’s the amount of funding supplied by UK banks to boost the country’s exports. Small and mid-sized firms can benefit from UKEF-backed trade finance derived from this new funding. UKEF’s SME & trade finance director Carl Williamson explained how in a Global Trade Today op-ed this week.
Quote of the week: “It is through businesses such as these, and the resilience and innovation of the individuals within them, through which long-term economic growth will be achieved.”
Chartered Institute director general Marco Forgione on this year’s King’s Award-winning businesses, announced earlier this week. Three Chartered Institute members were celebrated for their achievements in the international trade category.
- TTInstruments, which exports precision instruments to over 70 countries worldwide
- Walkers Shortbread, Scottish producer of the country’s signature biscuits and cookies
- Clarus Networks, a communications specialist providing advanced tech solutions for land, rail and sea
Movers and shakers: Finnish diplomat Jukka Salovaara has been appointed as the new EU ambassador to the UK.
The week in customs: As HMRC increases the number of customs audits it carries on – both remotely and on-site – Chartered Institute customs practice director Anna Doherty explained what businesses should be doing to ensure they’re in the best possible position to demonstrate their customs compliance.
You can also take the Chartered Institute’s five-minute compliance needs assessment to see how we can support your business to become audit-ready.
What else we covered: Chartered Institute UK public affairs lead Grace Thompson reviewed party pledges ahead of this week’s local elections. Watch this space for results’ analysis next week.
Baroness Neville-Rolfe was announced as the new Chartered Institute President, bringing a wealth of trade, policy and international business experience to the role.
True facts: Costa Rica is set to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), having been granted accession this week.
The Department for Business and Trade has touted the benefits to UK exporters, with opportunities highlighted for food and drink traders and professional services, including legal, accounting and engineering services.
Export market aside, it’s worth noting that Costa Rica is most famous for its biodiversity, home to an estimated 5% of the world's species despite only occupying 0.03% of the Earth’s surface.
