This week in trade saw the full implementation of US president Donald Trump’s reciprocal tariff regime – after months of negotiations and deals, the rates are set for now. Amid China’s surging exports, the Asian nation still needs to secure an agreement with the US to stop its current tariff truce from coming to an end next week.
There’s also good news for clean energy production from California and a new opportunity for UK customs intermediaries to contribute their views on a proposed voluntary standard on customs declarations.
The big picture: After months of waiting, it finally happened; US president Donald Trump’s tariff policy kicked in. The final deadline had been delayed multiple times, with the original idea being announced in April before repeated extensions. The new rates, which average 17% but vary by country, represent some of the highest that the US has placed on imports since the 1930s.
Asian nations like Laos and Myanmar have been particularly strongly hit, prompting countries and companies to rethink their supply chains. Additionally, Trump has repeatedly raised rates on Canada and India, even after extensive negotiations, in retaliation for proposed recognition of Palestine and sustained oil trade with Russia respectively. As such, it looks likely that the White House will continue to take this aggressive approach on other issues.
Early economic news out of the US has been poor, with lower-than-expected jobs numbers, rising inflation and slumping manufacturing. Additionally, global institutions have repeatedly warned that the uncertainty and disruption caused by the tariffs will continue to hit the world economy.
Good week/bad week: It’s been a good week for clean energy and net zero. According to Semafor, California carried out a “record-breaking” test of new grid technology. Authorities drew power from the wider statewide grid, taking from residential batteries in more than 100,000 homes, without causing a crash. The test was important, as California and other areas look to power the AI-driven data centre boom with cheap and clean energy.
Less positive news for oil exporters. According to Reuters, crude oil exports fell to the lowest level in four years. Exports of the energy commodity fell to 3.1 million barrels per day in July, the lowest such number since October 21. With Trump attempting to turn the US into an ‘energy superpower’, Asian and European buyers appear to have found cheaper alternatives.
How’s stat? 7.2%. That’s the year-on-year increase in China’s exports for July, ahead of the expiry of its tariff truce terms with the US next week.
This boost was led by growth in rare earths (21.4%) and semiconductor chips (16%), two products that have been at the centre of US tariff threats and export control measures in recent months.
Both sides touted “constructive” trade talks held in Stockholm last week, although any deal to prolong the truce or agree to permanently lower tariffs will still need to be approved by Trump, said US treasury secretary Scott Bessent.
Quote of the week: “Even if the IEEPA [International Emergency Economic Powers Act] option goes away, I would feel pretty confident that they're going to draw on one of those or multiple of those other statutes to keep the tariff rates very high.”
That was Kathleen Claussen, professor of law at Georgetown University, discussing the legal framework the Trump administration has used to justify reciprocal tariffs. You can read more in this Trade Insights feature.
The week in customs: The British Standards Institute has opened a consultation on a voluntary standard for customs intermediaries. A draft version of the standard has been published for comment, with the deadline closing on 3 October this year.
The standard is for use by customs intermediaries to specify how they facilitate the preparation and submission of customs declarations on the behalf of others. It covers aspects like due diligence, transparency and standard operating procedures.
What else we covered: There was consideration of the implications of Trump tariffs on EU wine exports, as Americans could be set for a steep increase in the cost of a bottle.
Our trade and customs experts answered the questions most frequently posed to our International Trade Helpline, with a look at dual-use goods and Temporary Admissions.
Customs Advisory Practice director Anna Doherty also updated members on changes to Customs Declaration Service document codes, while Imports Advisory Practice director Ilona Kawka explained Border Force’s recent declaration warning in our latest Customs Corner instalment.
True facts: Novel victims of the trade war this week include foam footwear firm Crocs, which saw shares fall 29.2% yesterday after announcing a predicted revenue fall of between 9 and 11%. Trump wasn’t entirely to blame, as the US shoemaker also said that the end of the ‘ugly shoe’ trend was partly responsible.
Beauty pays apparently, as at the other end of the spectrum, fashion house Ralph Lauren experienced a more modest 7% dip in share value following its own tariff-related earnings concerns.
Consumer product manufacturers worldwide are feeling the pinch, meanwhile, as they wait to see how consumers react as tariffs come into force. Ralph Lauren CEO Patrice Louvet said:
“The bigger unknown here today is the price sensitivity and how the consumer reacts to the broader pricing environment and how sensitive that consumer is.”
