US tariffs faced major legal hurdles this week, while China touted the importance of multilateral trade among 26 world leaders at a cooperation summit.
EU parliamentarians had two major pieces of trade legislation to consider, and, as Westminster returned, the UK’s top trade officials headed to Brussels to discuss the best ways to advance “open, rules-based trade”.
The big picture: Beijing and Tianjin played host to world leaders from BRICS nations and further afield, as China used its Shanghai Cooperation Organisation summit and the 80th anniversary of the end of WWII to set out its alternative world order.
Chinese president, Xi Jinping, said that the assembled nations, including Vietnam, Pakistan, Iran and North Korea, would “uphold the multilateral trading system with the World Trade Organization (WTO) at its core”.
The statement stood in contrast to US president Donald Trump’s new tariff regime which goes against a number of WTO principles. Trump posted on social media that he hoped Xi, along with Russian and North Korean leaders Vladimir Putin and Kim Jong Un, enjoyed “conspire[ing] against” the US during a military parade held in Beijing on Wednesday (3 September).
His tariff regime faced another setback last week when a federal appeals court ruled that many of his ‘Liberation Day’ reciprocal tariffs are illegal, with the 1977 International Emergency Economic Powers Act (IEEPA) under which they were introduced providing insufficient justification.
This week, Trump returned the decision to the Supreme Court – the US’ highest judicial office – in order to try and overturn the appeal court’s ruling, which found that while the IEEPA “bestows significant authority on the president” to respond to emergencies, it does not “explicitly include the power to impose tariffs”, per Guardian reporting.
Good week/bad week: A good week for European-South American trade, as the EU-Mercosur trade agreement draft text was approved by the European Commission (EC) and opposition appeared to fade.
The landmark trade deal, which was agreed after 25 years of negotiations in December, in the wake of US president Donal Trump’s 2024 election victory, has sparked controversy among farmers in multiple member states.
Legal safeguards protecting farmers in the event that agrifood imports distorted the market were offered by Brussels to placate them.
France – the bloc’s largest beef producer and most vociferous opponent of the agreement – believes the improved protections are “moving in the right direction” but will still need to “examine the proposal in detail to ensure the effectiveness of the mechanism”, according to trade minister, Laurent Saint-Martin.
Less constructive progress for the EU-US agreement to minimise tariffs, which has prompted protest from European Socialists. President of the Socialists and Democrats (S&D) parliamentary group, Iratxe García Pérez, told Politico that “we firmly oppose the agreement”.
This follows widespread criticism of the deal and EC president Ursula von der Leyen’s leadership on US trade relations, for capitulating to Trump’s demands and undermining green initiative with agreements to purchase more oil.
How’s stat? £800m. That’s the amount of government spending and British port money spent on superfluous border facilities, post-Brexit.
According to Politico reporting, ports invested heavily when anticipating a substantial increase in the volume of goods requiring inspection, but these facilities are going largely unused.
Portsmouth International Port’s director, Mike Sellers, told the publication that new Border Control Post facilities, costing a total of over £20m, were built with 80 inspections per day in mind – in reality, they averaged just three per day in its first year of operation.
“The sanitary and phytosanitary agreement will probably mean that it’s unlikely that we will need a border control post within the next two years”, he added.
Quote of the week: “Throughout the Open Trade Project series, it’s been refreshing to hear from officials and businesses about the regulatory and technological solutions that are out there – from digitising customs processes and documents, to upgrading border IT.
“Last night was no different, and the UK continues to have a real opportunity to lead on customs reform and digitalisation.”
Chartered Institute of Export & International EU public affairs lead, Fergus McReynolds, on the importance of EU-UK cooperation to enhance open, rules-based trade.
McReynolds and Chartered Institute director general, Marco Forgione, attended the project’s ‘Open Trade Reception’ in Brussels this week (3 September), co-hosted by UK Mission to the EU and the Chartered Institute, to discuss the topic with other leaders.
The week in customs: An export controls reversal means that exporters applying for a stockist application through the Licensing for International Trade and Enterprise (LITE) system, will no longer need to complete the ‘Details of Possible Ultimate End-Users’ screen’.
This step was introduced by the Export Control Joint Unit last month, but is no longer be necessary, the unit announced on Monday.
What else we covered: Chartered Institute trade experts, Lyn Dewsbury and Andy Bridges, answered member questions on how to best handle instances of missing documentation, as well an US rules of origin, in our latest Ask the Experts feature.
Commodity in Focus covers ethical questions around critical minerals, asking industry insiders how the UK’s supply of minerals can be fair and sustainable.
Trade digitalisation experts Netcompany shared their views on what the future of customs should look like in order to best support UK businesses to trade in this guest op-ed.
True facts: Amid tariff strife and export restrictions, China has found a new way to keep it’s exporting edge according to the FT: robots.
The publication writes that Chinese factories are installing 280,000 industrial robots per year, about half the world’s total. Experts believe this automation explains why China has been able to hold onto its share of low-end manufacturing, even as the average worker’s wage increases.
In a further boon to China’s economy, much of the supply is domestic, with Chinese robotic manufacturers estimated to be responsible for around half of factory purchases.
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