While US President Donald Trump’s Davos appearance dominated the news agenda this week, there were plenty of other notable trade developments.
The sale of blockbuster social media app TikTok from Chinese owners to a US consortium was confirmed this week and the World Customs Organization (WCO) outlined its next update to the Harmonized System.
The big picture: Monday (19 January) may have brought a new low in EU-US relations, as Trump threatened a new raft of tariffs on Nato allies and European trade partners resisting his efforts to control Greenland.
During his Davos visit this week, Trump reversed his plan to implement 10% rates on eight European nations, including the UK, for objecting to his plans to take control of Greenland.
Possibly bowing to stock market pressure, possibly placated by a Nato-brokered “framework” agreement to reassess US involvement in the island’s security, he told reporters tariffs were “off the table”, along with the use of military force.
Discussions with Nato secretary general, Mark Rutte, touched on the stationing of US troops on the island, and giving the US veto rights over Chinese and Russian projects in Greenland, according to FT reporting.
Danish foreign minister, Lars Løkke Rasmussen, was pleased with the result, remarking on Wednesday (21 January) that “the day is ending on a better note than it began”.
“We welcome that POTUS has ruled out to take Greenland by force and paused the trade war.”
Nonetheless, the episode has exposed the fragility of the trade ties between the two parties. The EU paused ratification of the trade deal agreed last year that would limit US tariffs on its exports to 15% and revisiting retaliatory measures including a €93bn-tariff package and breaking out its as-yet unused ‘trade bazooka’.
Following the incident, European Council president António Costa told assembled nations yesterday (22 January) that the EU’s focus must be on “moving forward on the implementation of that deal” and “stabilisation” of transatlantic trade relations,
However, one European official who attended Trump’s Davos keynote told Politico that while the immediate danger has passed, the threat hasn’t vanished:
“Trump’s promises and statements are unreliable but his scorn for Europe is consistent. We will have to continue to show resolve and more independence because we can no longer cling to this illusion that America is still what we thought it was.”
Good week/bad week: A deal has been done to hand TikTok's US operations over to a consortium of mostly US firms. While Chinese owner ByteDance retains a 19.9% stake, a mix of US computing firms and tech investment firms will take majority holdings in newly formed TikTok USDS.
The app’s algorithm, which informs the content users are presented with, has been leased to TikTok USDS and will now be retrained solely using US data. As a result, the app will work differently for US users, with ongoing speculation that the experience will be inferior to the original app.
The sale follows ratcheting concerns from US officials that ByteDance could be compelled to share user data with the Chinese government. Trump repeatedly suggested banning the app during his first and second terms in office.
The US president has since credited himself with helping to “save TikTok” on Truth Social, while one early investor in TikTok told the FT that the deal “leaves ByteDance with most of the economic benefits”.
Less good news was the stark warning from the UK’s Business and Trade Committee, the body tasked with scrutinising the Department for Business and Trade.
The committee said that DBT’s proposed 40% cut to export support staff, responsible for helping businesses navigate trade deals, could undermine the anticipated economic benefits of the UK-India trade deal.
Committee chair, Liam Byrne, characterised the plans as a “serious delivery risk”.
How’s stat? £11.6bn. That was the sum the UK government borrowed in December. A £1.4bn shortfall on the figure predicted by Reuters economists and 38% less than in the previous month. The amount is also “substantially down” on the same figures for December 2024, according to Office for National Statistics senior statistician, Tom Davies.
Tax increases in chancellor Rachel Reeves’ November budget were largely responsible for the reduction.
Quote of the week: “We need a frank discussion on the link between MFN status and reciprocity, taking into account members’ actual levels of market openness, their commitment to fair competition and transparency, and their evolving weight in global trade.”
European trade commissioner, Maroš Šefčovič, advocating for nations party to the WTO to gain the right to apply tariffs to fellow members.
His comments, shared in an FT op-ed, reflect the challenges the multilateral body faces in resolving disputes between members, and growing frustrations from the EU and other members over China’s industrial overcapacity and exports.
The week in customs: The WCO announced a major update in the Harmonized System used by trading firms globally to facilitate the movement of goods.
This week, the WCO confirmed that 299 sets of changes will take effect from 2028. Compared to the current version, released in 2022, this means that six new headings and 428 new subheadings will be added, while five headings and 172 subheadings will be removed.
The changes reflect “evolving trade patterns, technological progress and growing regulatory needs”, the organisation adds.
What else we covered: We looked ahead to the International Food & Drink Event (IFE) in March, as Chartered Institute executive editor William Barns-Graham reflected on the trade opportunities present for firms in the sector, despite ongoing volatility. You can now book tickets for IFE, which will feature a discussion between Barns-Graham and Chartered Institute sanitary and phytosanitary expert Joseph Goldsworthy.
Members can also glean insights from last week’s Borders, Ports and Logistics Special Interest Group, in which Imports Advisory Practice lead, Ilona Kawka, examined the adoption of trade digitalisation among firms, as regulatory changes globally encourage digital practices.
In light of this week’s uptick in trade tensions, our experts also weighed in with good practice measures your company can adopt to be prepared and compliant amid the uncertainty.
True facts: The BBC highlighted the outsized role that Slovakia plays in the world’s car manufacturing supply chains.
Producing almost 1 million cars per year, the Eastern European nations is the world’s largest producer on a per capita basis, relative to the size of its 5.4m population.
Stellantis, Volkswagen and Jaguar Land Rover all rely on the country's manufacturing capacity, with Volvo set to open an Electric Vehicle plant next year.
