US president Donald Trump may be pleased with this week’s news that his country’s goods and services trade deficit fell in the latest government figures, while Chinese counterpart Xi Jinping enjoyed further growth in his country’s trade surplus. There is also positive news for UK chancellor Rachel Reeves as growth in Britain beat economists’ predictions.
The big picture: The US’ trade deficit was in the headlines this week as Trump’s tariff measures helped it to narrow by 39.1% in October.
The US commerce department reported this week that the goods and services deficit was US$29.4bn in October, a significant drop from the $48.1bn figure for September. The overall government budget deficit also fell to $1.7trn.
China had its own stats to release this week, where it revealed a bigger trade surplus than ever before of $1.2trn. Its exports grew 6.6% in December, with steel exports surging to unprecedented levels despite new protectionist measures from the US and EU. US import of Chinese goods dipped, however, from 14.7% as a share of total Chinese exports in 2024 to 11.1% in 2025.
China could also see a boost in North America going forward from a warming of relations with Canada, as Chinese leader Xi Jinping hailed a meeting with Canadian prime minister Mark Carney a “turnaround” and announced a “new strategic partnership”. On trade, Carney remarked at the meeting that “bilateral deals, plurilateral arrangements and coalitions” will shape the future of the global economy.
The US’ international approach was further recalibrated at the start of the week when it withdrew from a range of multilateral organisations including United Nation Trade and Development (UNCTAD) and the United Nations Educational, Scientific and Cultural Organization (UNESCO).
Good week/bad week: A positive week for UK GDP growth, which ticked up to 0.3% in November to beat many economists’ expectations. A 25.5% boost in motor vehicle manufacturing helped drive the increase, and is likely owed to the return of Jaguar Land Rover’s operations following a cyberattack.
A more troubling week for EU trade between member nations, which fell to 22% as a proportion of the bloc’s GDP growth in 2024 compared with 2023, according to Brussels’ annual single market report, seen by the FT.
How’s stat?: 25%. The tariff rate placed on countries doing business with Iran by the US over the Middle Eastern nation’s violent crackdown on protesters this week.
Quote of the week: “The price of free trade cannot become weakened security. Free trade has got to expand our freedom, not erode our peace of mind.”
Liam Byrne, chair of the Business and Trade Committee, at Europe House in remarks we reported on this week, discussing the UK’s relationship with the EU.
The week in customs: Our latest member-exclusive Customs Corner feature looked at the range of customs changes since the New Year, among them the beginning of the ‘definitive period’ of the EU’s Carbon Border Adjustment Mechanism (CBAM) as well as the Import Control System 2 (ICS2) becoming mandatory for UK traders.
The first edition of our new-look webinar series, Global Trade Live, took place on Tuesday, with our Customs Practice lead Caroline Rowden and Portwest customs manager Danielle Ford addressing the three pillars of customs compliance. You can watch that session back here.
Other news we covered this week: Global Trade Today previewed the range of elections happening across the world in 2026 in another member exclusive on Monday, including those in Hungary and Latin America, only for the Japanese government to lay the groundwork later in the week for its own snap general election, as prime minister Sanae Takaichi looks to capitalise on a strong lead in opinion polls.
Elsewhere, Global Trade Today examined fresh Iranian threats to close the Strait of Hormuz and the implications of the US raid on Venezuela earlier this month for trade routes as part of our State of Freight series.
A World Bank report published this week said that the organisation expects global trade to “remain broadly steady over the next two years”, with 2.6% growth forecast for 2026 and 2.7% for 2027. Better-than-expected growth in the US, despite its tariff policies, drove an uptick in predictions compared to the previous report in June 2025. The 2020s remain set to be “the weakest decade for global growth since the 1960s”, however.
True facts: A close claw-l for one trade shipment this week after 15,000 crabs were catapulted into a field in County Donegal. A 10-man salvage team recovered the cargo over 16 hours, with 95% saved before they were shipped on to Portugal.
