The US-China relationship hit another flashpoint this week, as threats were exchanged over export controls, while the UK faces anaemic growth and a major report predicts heightened inflation in the coming months.
The big picture: This week’s trade news was dominated by a renewed dispute between the US and China, after the latter imposed a host of new restrictions on the export of critical minerals.
Beijing plans to impose restrictions on any non-Chinese company exporting goods that contain even small amounts of rare earths and other minerals, requiring them to procure a licence. China produces the majority of the world’s supply of the minerals, which are crucial in a wide range of supply chains.
The US has already imposed higher port rates on Chinese ships, and US president Donald Trump has threatened a new 100% tariff on Chinese goods over the measures. China called this a “typical example of US double standards” earlier in the week.
US treasury secretary Scott Bessent has argued the measures will affect countries the world over, not just the US.
“If China wants to be an unreliable partner to the world, then the world will have to decouple,” he said at a press conference. “The world does not want to decouple. We want to de-risk. But signals like this are signs of decoupling, which we don’t believe China wants.”
Jamieson Greer, the US trade representative, said the new rules essentially gave China control over entire global supply chains for goods like smartphones and advanced electronic products.
Speaking to the FT, Sara Schuman, a former US trade negotiator to China, said that China’s response to US objections “over the next two weeks will have broad strategic implications for years to come”.
Good week/bad week: The UK is set to enjoy the second-best growth rate in the G7 in the coming months, according to the International Monetary Fund (IMF). It’s set for 1.3% growth this year and next, beaten only by the US, the organisation says.
But the IMF also had bad news for the UK in its biannual global outlook report, with the country set to face the highest inflation rate in the group, with 3.4% price increases expected for the rest of this year and 2.5% expected in 2026. Chancellor Rachel Reeves responded to say the economy “feels stuck”.
How’s stat: 0.1% – that was the latest actual growth rate reported for the UK economy. That came after Reeves said “we are looking at further measures on tax and spending” in her upcoming Budget, “to make sure that the public finances always add up”, which has been widely interpreted as presaging both tax rises and spending cuts.
The week in customs: Our latest Ask the Experts feature included member-exclusive insight on sending commercial samples, procedure code errors and the threshold for excise duty on ethanol.
We also had a contribution from TariffTel’s Elizabeth Davies on avoiding the ‘hidden risks’ associated with product classification.
Quote of the week: “The EU is right to confront global steel overcapacity, but a 50% tariff risks serious disruption to international trade.”
Chartered Institute director of EU and international public affairs Fergus McReynolds on the EU’s plan for steel tariffs, which we examined in this week’s edition of Commodity in Focus.
What else we covered this week: We reviewed the latest on the UK and EU’s planned sanitary and phytosanitary (SPS) agreement, which could ease food exports to the bloc for UK firms. That was under the microscope in our latest Trade Insights feature.
There was an update to the UK Sanctions List on Tuesday (14 October), as it was announced that exporting firms will only need to refer to one sanctions list from 28 January, with the consolidation of the government’s two sanctions lists planned.
You can also read more about the impact of US port charges on Chinese vessels, as well as other shipping news, in our latest State of Freight feature.
True facts: A surprise change to the Chinese calendar this week. Not the Zodiac calendar, which still rushes apace towards the year of the horse next February, but its business calendar.
The BBC reports signs of annual e-commerce event 'Singles Day' being moved forwards from its usual 11 November date, as large Chinese retailers began offering discounts this week.
The shift is part of Chinese efforts to boost spending, as its economy struggles with the ongoing impact of US tariffs, as well as high youth unemployment, a prolonged property crisis and government debt.
