This week saw more Brussels maneuvering to protect domestic industry from China’s export dominance, and hints at progress on the UK-EU Sanitary and Phytosanitary (SPS) Agreement, even as London’s bid for a single market was rejected.
There were also a series of customs updates this week, including changes to the Duty Reimbursement Scheme (DRS) for Northern Irish goods movements, planned downtime for the New Computerised Transit System (NCTS) and new, digitised ATA Carnets.
Big picture: The week writ large has seen a host of developed nations grappling with one of the biggest trade questions of our time – how to protect domestic industry in the face of China’s monumental export machine.
The EU is set to advance changes to trade policy that address the issue next month (18-19 June), with proposals drawn up in a strategy paper circulated by France, and co-signed by Spain, Italy, the Netherlands and Lithuania, earlier this week.
The FT reported that the ‘non-paper’ called for greater powers to deploy tariffs, including applying them to companies instead of goods or countries, as well as cracking down on circumvention techniques via third parties.
This follows plans proposed by EU trade commissioner Maroš Šefčovič last week to compel European manufacturers to diversify away from China when sourcing inputs.
From manufacturing to e-commerce, the bloc has also taken a stand against cheap Chinese imports this week. It was announced yesterday (28 May) that Brussels had slapped a €200m fine on e-commerce giant Temu, the biggest imposed under its Digital Services Act.
The fine was imposed after Temu failed to check that the site was found to be putting illegal goods like dangerous baby toys and faulty chargers on the EU market, having failed to conduct thorough risk assessments. Carrying out such assessments should be “the first step when you are entering the European market”, said technology commissioner Henna Virkkunen.
Retailers in the UK also petitioned the government to take a stronger stand against Chinese e-commerce imports this week. Fifteen household brands like Marks & Spencer, Argos and Primark called for the introduction of a flat fee (£2.60) for each imported item during the interim period before the ‘de mininis’ system is reformed in 2029 – mirroring the EU’s response.
Good week/bad week: Despite halting the first phase of the development of the UK’s Single Trade Window – one portal through which all customs documentation can be entered once – the government is calling for industry input on the next phase of delivery.
HMRC has reached out to traders, asking for their feedback on the digital project, which it hopes will help government understand the challenges presented by current border systems, including “duplicated data, areas where systems or processes cause friction, and aspects that add cost or complexity to your operations.”
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A setback in the UK’s bid to secure closer ties with Brussels this week, as the Guardian reported that EU officials rejected efforts from British counterparts to establish single-market terms for trade between the two parties.
European officials proposed a customs union or alignment through the European Economic Area, both of which cross prime minister Sir Keir Starmer’s ‘red lines’.
According to Politico, one senior official questioned how seismic the UK administration’s ‘reset’ could hope to be “without revisiting” those red lines.
Although British officials suggested that the delayed summit between the two parties was simply an issue of aligning diaries, other experts suggested there’s the possibility of a “standoff” between the two sides, as the UK is also less inclined to move the dial on the politically sensitive topic of free movement.
While loftier ambitions for trade alignment may have faltered, there’s indications of success in one key ‘reset’ pillar: the SPS Agreement expected at the future summit.
The Department for Environment, Food & Rural Affairs (Defra) published guidance for actors across agri-product supply chains, including manufacturers, hauliers, intermediaries, Border Control Post operators and vets.
How’s stat? €300,000. That’s the proposed value of fines the EU could impose if companies refuse to provide information about semiconductor capacity, under proposed new laws to give Brussels greater powers to requisition chips during a shortage.
The FT reports that the law, which could be published as early as next week, is designed to prevent either Beijing or Washington using the technology as a point of economic coercion.
According to a draft seen by the publication, it could “force semiconductor manufacturers to prioritise orders for crisis-critical products, overriding existing contracts”. This would apply to sectors including medical devices, digital infrastructure and weapons.
This follows an incident last year in which tensions between the Netherlands and China over Chinese-owned chipmaker Nexperia, led China to impose export controls on all chips leaving its domestic Nexperia facilities – forcing several European car manufacturers to reduce production.
Quote of the week: “Oman will behave just like everybody else or we’ll have to blow them up.”
The latest statement from US President Donald Trump, made to reporters following a White House cabinet meeting (27 May), saw him reject the latest peace proposal from Iran, objecting to its bid for joint Iranian-Oman operation of the Strait of Hormuz. Oman has been a US ally for many decades.
This followed rising hopes over the weekend that a deal could be done to open the waterway.
The energy and supply chain disruption has been felt globally, with the latest UK updates suggesting a 13% hike in energy costs over the summer, but greater need to secure food supply chains.
The week in customs: The UK is digitising its ATA Carnet system, which allows the temporary export of goods like commercial samples, trade fair or exhibition goods and professional equipment to countries within the ATA Carnet System.
From 1 June 2026 the UK will be introducing ‘e-carnets’ alongside EU member states, Norway and Switzerland.
In its May customs bulletin, HMRC wrote that the e-carnets will be “accessible on mobile devices, allowing businesses and customs intermediaries to download carnets, prepare declarations and receive confirmations electronically”.
It also noted that at transition period will be in place to enable the use of both paper and digital ATA Carnets, and that “all paper carnets issued before 1 June 2026 remain valid”.
What else we covered: Members got an exclusive insight into new data reviewing the impact of Trump tariffs, and expert testimony on what the future of US trade policy could look like.
Chartered Institute digital trade expert, Ilona Kawka, explained the upcoming changes to the Duty Reimbursement Scheme (DRS) that supports businesses moving goods into Northern Ireland.
A Trade Insights feature explored the calls from Canadian PM Mark Carney calling for ‘middle powers’ to cooperate in order to counter trade aggression from the US and China.
True facts: One beneficiary of a drive to digitalise the ATA Carnet system will be firms supplying goods for global music and sporting events, like the upcoming World Cup.
Research suggests that the event is major boon for host nations economically, with a University of Aberdeen paper finding that it boosts GDP by almost 0.5% for the following six months.
This increase is partially driven by higher exports of products and services, which grow in popularity after the event.
