Discussions about the benefits of an EU customs union took place in Parliament this week, with a Private Members Bill bucking the odds to win enough backing for a second reading.
Mexican lawmakers voted to introduce tariffs on China and a range of imports amid US tariff negotiations, while China’s exports continued to thrive this year despite increasing global protectionism.
The big picture: Debates about whether the UK should rejoin the EU customs Union abounded, with a private members bill on the issue securing government support in parliament this week.
After justice minister David Lammy’s remarks on the News Agents podcast last week, highlighting how countries like Turkey have benefitted from participating in an EU customs union, prime minister Sir Keir Starmer has since battled to keep his party on-message. He warned that rejoining would “unravel” recent trade deals with the US, but also said that he wants a “closer relationship than the one we have at the moment”.
Labour’s stance since the 2024 election has been that it won’t rejoin the customs union, even as efforts to realign with Europe on trade and customs will gather pace next year.
In its election manifesto, Labour pledged a “reset” of EU relations, in which rejoining the customs union was a “red line” it promised not to cross. Instead, the reset has been undertaken through cooperation on sanitary and phytosanitary (SPS) rules, energy trading schemes and youth mobility.
Talks on those areas have been overseen by Brexit minister Nick Thomas-Symonds, who reiterated the government message earlier this week.
“The strategy that I and the government have been pursuing is based on our mandate from the general election of 2024, that we would not go back to freedom of movement, we would not go back to the customs union or the single market.”
However, the battle to stay on-message became more challenging after a private members bill introduced to Parliament by the Liberal Democrats attracted support from 13 Labour ministers, passing with the backing of 100 MPs in total.
Liberal Democrat leader Sir Ed Davey described an EU customs union as “the single biggest step the government could take to grow our economy, put money back into people's pockets and generate billions for our public services”.
Good week/bad week: A good week for Mexico-US relations? Mexico approved 50% tariff rates for Chinese goods and applied the same rate to over 1,400 products across all international suppliers. The rates are due to come into effect on 1 January 2026.
President Claudia Sheinbaum has said that the rates are needed to stimulate domestic industry.
It’s also worth noting that the decision comes alongside negotiations between Mexico and the US – its largest trading partner – amid ongoing threats from president Donald Trump to increase duties on Mexico.
A Chinese commerce ministry spokesperson said on Thursday (11 December) that the tariffs would “substantially harm the interests of relevant trading partners, including China”, according to state news site Xinhua. The spokesperson also “urges Mexico to correct its wrong practices of unilateralism and protectionism at an early date”.
Not such a good week for US-Indonesia trade cooperation, as US trade representative Jamieson Greer warned that the South-East Asian country “may be at risk of losing its deal” with the US on tariffs.
Indonesia had been set for a 32% rate on its US-bound exports before negotiating a 19% tariff deal in July. However, talks to ink the agreement have been met by repeated hurdles, with the US attempting to include restrictive ‘poison pill’ clauses that allow it to renege on the deal if Indonesia were to sign another trade pact deemed harmful to US interests.
That was met with resistance last month, and now Indonesia has objected to removing non-tariff barriers on US imports and implementing some digital trade commitments.
How’s stat? US$1trn. That’s the value of China’s annual trade surplus, which will reach a record high this year, according to China’s General Administration of Customs data published on Monday (8 December).
The data revealed that plunging exports to the US (down 29% on 2024 in November) have been offset by sales to the EU and Africa.
Additionally, experts suggest transhipment of goods to the US via South-East Asia to circumvent Trump’s tariffs have aided export revenues. Chinese goods exports to the six largest economies in the region grew 23.5% in the first nine months of 2025.
However, the picture isn’t entirely rosy. In the face of increasing protectionism, China has failed to diversify its economy away from international sales, with the Chinese Communist Party yet to increase domestic consumption.
It’s also possible that the new dominant export market, the EU, will try to stem a rising tide of Chinese goods next year. While on a diplomatic visit to Beijing last week, French President Emmanuel Macron described China’s surplus as “untenable”.
He said that, while the “mutual dismantling of our aggressive [trade] policies” was desirable, punitive customs duties designed to rebalance the relationship could also be on the table. He added that Chinese investment in Europe would also be welcome:
“We recognise that they are very good in some areas. But we can't be constantly importing. Chinese businesses have to come to Europe, just like EDF and Airbus previously went to China, and create value and opportunities for Europe.”
Quote of the week: “This agreement could help to unlock cleaner energy, smarter public services, and new opportunities which will benefit communities up and down the country.”
That was Technology Secretary Liz Kendall on the announcement that Google’s AI unit DeepMind will create an automated research lab in the UK, providing British scientists with access to cutting-edge tools.
Research in nuclear fusion and the deployment of Gemini AI across government and education, are possible areas of collaboration with government.
The week in customs: Our latest Customs Corner gave members insight into upcoming changes for the Customs Declaration Service (CDS) 5.0.0 release and outlined changes to indirect exports from Northern Ireland.
What else we covered: We began our look back at 2025, with a review of the ‘year in tariffs’ and members’ reflection on their year grappling with increased US tariffs, along with other challenges and successes.
The Daily Update also reviewed the EU’s new economic security strategy in our latest Trade Insights feature, which aims to promote competitiveness, safeguard against risk and encourage partnership with like-minded countries.
True facts: Check the origin of your Christmas decorations this weekend, and you may find that, not only are they likely ‘Made in China’, but they probably hail from Yiwu.
Located in the Eastern Zhejiang province, the city is estimated to produce between 60% and 80% of the world’s Christmas decorations, exporting over 20,000 different types of Christmas product to more than 100 countries globally.
With America and Europe leading among the festive goods’ export destinations, rising protectionism is anticipated to hit the city hard this year.
