A year has passed since US President Donald Trump’s reciprocal tariff regime was introduced, and there may be more duties on the way, with 100% levies being threatened for pharmaceutical imports.
Several supply chains are feeling the strain and, as the Middle East crisis continues, food inflation is set to surge this year.
In a spot of good news, a new service launched by HMRC this week will give traders greater access to their customs data.
The big picture: Oil prices continue to yo-yo in response to the White House’s conflicting messaging on its war in Iran.
Having assuaged markets by claiming that the US will be out of the country in two-to-three weeks with or without a peace deal, Trump’s comments today (2 April) that the US will still hit Iran “extremely hard” in this period saw Brent Crude rise almost 5% to US$106 per barrel. This price is still significantly lower than the US$119 reached on Monday (30 March) after Trump’s suggestions that the US might take control of Iranian export hub Kharg Island.
Trump’s comments about defence have also continued to rile allies, going so far as to say he would consider pulling the US out of defensive alliance Nato, which he again dismissed as a “paper tiger”.
He’s repeatedly called on countries reliant on oil from the Middle East to do more to reopen the Strait of Hormuz – through which 20% of the world’s crude supply flows.
The UK is set to host a virtual summit of about 30 nations today on how this can be achieved.
Elsewhere, the crisis is now sparking major concerns across a number of supply chains, with CityAM reporting that UK airlines face fuel shortages in as little as five weeks and the head of NHS England telling LBC that he’s “really worried” about supplies of certain drugs.
Good week/bad week: Amid the ratcheting tensions and increasingly dire economic warnings, there was good news about progress towards the UK’s reset of relations with the EU.
EU relations minister Nick Thomas-Symonds told Politico’s Westminster Insider podcast that he was confident that a deal aligning the UK and EU in areas including energy and agri-trade could be reached by early summer.
“Some of these stories are not indicative of how well we've been progressing,” he said. “It is a situation where both sides can win, whether it's from security and defence and in terms of energy, particularly energy at the moment.”
His comments follow Sir Keir Starmer’s press conference yesterday, in which the prime minister braced the public for tough times ahead in light of the Iran war and energy crisis, and also reiterated his message that closer EU ties were vital to the UK’s future economic prosperity.
Thomas-Symonds, a close ally of the PM, confirmed that a commitment to concluding the reset by the end of the year would be featured in May’s King’s Speech, which sets out the government's legislative agenda.
“The bill will introduce the mechanism of alignment — and I would expect that to be completed by the end of 2026 and to have completed its parliamentary passage by then.”
Bad news for the pharmaceutical sector, as reports suggest the US administration could be following through on Trump’s threats from last year to impose 100% tariff rates on branded medicines as soon as today.
Last Autumn, Trump threatened to introduce 100% levies on companies that hadn’t committed to investing in US production. This led drugmakers like Pfizer, AstraZeneca and Novo Nordisk to strike deals with the US administration, according to FT reporting.
The tariffs would be introduced using section 232 of the Trade Expansion Act 1962.
The use of the International Emergency Economic Powers Act 1977 to introduce reciprocal tariffs last year were found to be unlawful by the Supreme Court. Section 301 investigations into trading partners under the Trade Act 1974 are currently being undertaken to reintroduce them on a permanent basis.
How’s stat? 9-10%. That’s the Food and Drink Federation’s (FDF) new revised food inflation prediction for 2026. Last year, the figure was a more manageable 3.2%.
FDF chief economist Dr Liliana Danila said that the sector being hit with price rises across fuel, transportation and packaging, along with supply chain disruption, was very difficult for businesses to absorb.
“Given the scale and speed of these cost increases, and despite companies’ best efforts not to pass price increases on, it’s clear that food inflation is going to rise in the months ahead.”
Quote of the week: “Now is a fantastic time to be reaching out to lapsed customers or future prospects in the EU, rather than letting competitors get a foothold in the markets you trade in”.
That was Chartered Institute trade and customs consultant Joe Goldsworthy’s advice to UK food and drink exporters at this week’s International Food & Drink Event, ahead of rule changes stemming from the upcoming alignment of EU-UK sanitary and phytosanitary rules.
Attendees of the annual show, held at the London Excel, also heard from Chartered Institute members Sophie Lavis (Flora Food Group), Glen Marriott (Wrexham Village Bakery) and Adriana Santos (Tracklements), with executive editor William Barns-Graham hosting panel sessions on FTA utilisation and navigating uncertainty.
The week in customs: Traders now have access to their Customs Declaration Service (CDS) data via a new government service that launched this week.
Yesterday (1 April) the government announced that importers, exporters, customs agent and third parties, like consultancy or accounting firms, would now be able to request free customs data reports from HMRC.
The service will empower businesses to review the accuracy of declarations submitted in their name, analyse submissions over time and support any audit investigations.
Chartered Institute customs practice director Anna Doherty welcomed the new service but also warned trading businesses that this will increase compliance expectations from HMRC.
“Previously, businesses could blame any non-compliance or incorrect duty payments on not having full access to their declaration data, as the CDS data service required a paid-for subscription,” she told Global Trade Today.
“Now that their CDS declaration data is available for free, businesses have no excuses left when it comes to checking their declarations are accurate and they have been paying the correct duties for their trade.”
The next Global Trade Live webinar on 14 April will look at the service in more depth. The session will cover how to prepare for a customs audit. You can book your place for free here.
What else we covered: Common trade queries were addressed by our experts this week, with Incoterms troubleshooting, customs warehousing challenges and freight disruption caused by the Middle East war under consideration in this Ask the Experts instalment.
Adtran trade compliance specialist Charlotte Richardson provided insight into how the company is reviewing AI’s fitness to support customs compliance in this Member Spotlight.
True facts: Easter may be just around the corner, but we thought it would be worth marking a trade-related milestone today, as 2 April is exactly one year since Trump’s Liberation Day tariffs.
This regime has since been struck down by the Supreme Court, with a new raft of investigations underway to consolidate the programme. However, the supply chain disruption, inflated costs and new era of uncertainty have certainly felt like a more permanent fixture in global trade.
