The decision by US president Donald Trump to cancel the de minimis exemption two years early is already causing confusion and chaos. This week has seen postal authorities across the world suspend package services to the US.
Elsewhere, one unexpected beneficiary of tech growth has been Latin American nations, after a senior executive at chip company Nvidia said that he expected Mexico and Brazil to become major players in the manufacture of semiconductor in the future.
The big picture: Trump’s changes to the global trading system continue to roil the global economy.
Global Trade Alert, which is tracking the suspension of parcel shipping to the US, found that 7 nations had fully suspended all shipments, with a further 25 stopping the shipment of goods and 10 more limiting the value of the goods they ship.
The Malaysia postal services said that airlines had reported they were not ready to “process postal consignments” due to the added complexity of the new procedures, while counterparts in countries like New Zealand, Mexico and Japan said that they either hadn’t been given enough information or the timescales were too short.
UK firms have told the Daily Update about the difficulties they’ve faced with shipping packages to the US, with small business owners saying that they’ve already seen an impact on the bottom line.
It’s not just de miminis: it’s how nations are reacting. While Canada and the EU have made concessions to Trump to stave off Trump, China looks to take advantage. Bloomberg reports that president, Xi Jinping, wrote a letter to Indian counterpart, Droupadi Murmu, on improving ties.
The FT reports that smaller nations like Singapore, the UAE and New Zealand have banded together to launch the Future of Investment and Trade Partnership (FIT-P), all in an effort to boost trading links between fellow small and medium-sized nations.
Good week/bad week: It’s been a good week, of sorts, for Latin American nations, as chip producer Nvidia is set to focus its attention on growing its base in Mexico and Brazil. Marcio Aguiar, Nvidia’s Latin American director, told Bloomberg Línea that Brazil and Mexico were “going to be the leading actors in data centres for AI,” with major investments planned. This news comes as the presidents of both countries met to sign updated sectorial trade deals.
It’s been a bad week for fans of stable governments in Europe. The Dutch caretaker government almost collapsed and France’s PM called a no-confidence vote that he looks almost certain to lose. This came as one of the major figures in Europe, the former head of the European Central Bank Macro Draghi, said that Europe was “ill-equipped” for the new world.
How’s stat? Indian exports to the US could fall by as much as 70% in certain sectors as a result of Trump’s latest tariffs, Ajay Srivastava, founder of the Global Trade Research Initiative, told the Guardian.
Quote of the week: “The reality across the UK is that British exporters - including many small businesses just starting to expand overseas - are forking out up to £200m each year for licences to trade.
“From Scottish smoked salmon to English sparkling wine, asparagus to cut flowers, and everything in-between, slashing costs and streamlining border checks could support thousands more businesses to share their wares with a world that is hungry for British goods.”
Chartered Institute director general, Marco Forgione, responding to Nick Thomas-Symonds speech on EU-UK relations.
The week in customs: The Joint Customs Consultative Committee (JCCC) has announced that New Computerised Transit System, Phase 6 (NCTS6) will be delivered in two sub-phases, the first beginning next week (1 September). When completing a transit declaration, the options for ‘security – transit operation’ will be limited to 2: Security Type 0 or 2. Those using third-party software are being advised to check with their provider.
The Animal and Plant Health Agency (APHA) is also announcing a scheduled update on 1 September to the Import of products, animals, food and feed system (IPAFFS). While no disruption is expected, APHA is advising anyone experiencing issues to contact the STORM incident hub (Stormincidentresponse@defra.gov.uk).
APHA also advised that from 1 September port health authorities will begin accepting digitally signed importer declarations (e-signature) from both EU and non-EU countries
What else we covered: The Daily Update spoke to SMEs about the cancellation of the de minimis exemption and how it was making exporting to the US too expensive for many firms.
Chartered Institute members can read about the expiration of the African Growth and Opportunity Act in the US and how it is likely to impact Africa’s trade links.
True facts: On this day in 1997, Netflix was founded by Marc Randolph and Reed Hastings. Starting out as a competitor to Blockbuster, which has since gone the way of the dodo, Netflix has transformed from DVD-by-mail rental company to a streaming powerhouse with hundreds of millions of subscribers.
After the 2000 dot-com bubble, Randolph and Hastings offered to sell their company to Blockbuster for US$50m. The offer was declined by Blockbuster’s CEO John Antioco, thinking it was a joke.
These days Netflix is ranked as one of the most valuable companies in the world, with some estimates giving it a market cap of £386.66bn.
