The week begins with more global uncertainty, with the Middle East crisis now in its second week and oil prices spiking.
There are a couple of significant government announcements for UK traders as well, with updates on the sanitary and phytosanitary (SPS) deal with the EU, and the free trade agreement with India.
Middle East crisis latest
Crude oil prices surged above US$100 a barrel to $120 earlier today (9 march), with the ongoing war in Iran creating fears that there will be a prolonged disruption to energy supplies through the Strait of Hormuz.
The rise has caused turbulence in global markets, with the UK’s FTSE 100 falling 1.5% this morning, according to the BBC. Gilts have also slumped, leading to speculation that the Bank of England could raise interest rates – a reversal of the recent downward trajectory.
The FT reports that G7 finance ministers, including UK chancellor Rachel Reeves, will meet today to discuss a possible joint release of petroleum reserves to stem the unfolding energy crisis. The 32-member International Energy Agency (IEA) hold reserves for emergencies.
The UK’s arable farmers have also expressed concern to the FT that the Iran crisis could force them to pay higher prices for fertilisers, with the war set to constrict the global marketplace.
“There is a real cash crisis looming,” said Nick Shorter, chief executive of farm management firm Velcourt.
US President Donald Trump is adamant that the disruption to the energy market will only be “short term”. He posted on Truth Social:
“Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace. ONLY FOOLS WOULD THINK DIFFERENTLY!”
The president also spoke with British prime minister Sir Keir Starmer yesterday afternoon, having claimed that the US didn’t “need people that join wars after we’ve already won”. Trump has accused the UK of being too slow to support the US-Israeli campaign with access to its bases in the Middle East.
A Downing Street spokesperson told the Guardian that the leaders “began by discussing the latest situation in the Middle East and the military cooperation between the UK and US through the use of RAF bases in support of the collective self-defence of partners in the region”.
UK trade update 1: Get ready for SPS deal
In better news for UK businesses, the government is this week increasing its promotion of two upcoming deals that it says will help boost UK trade.
Later today, environment secretary Emma Reynolds will set out how British agrifood traders will be able to benefit from the SPS deal it is negotiating with the EU.
“By reducing delays and unnecessary paperwork, this deal will help keep shelves stocked, protect jobs and put downward pressure on food price inflation for families across the country,” she will say.
“British businesses deserve better and we will work hand-in-hand with them to ensure this deal is a success.”
The government says it is working towards “a mid-2027 start date” for the agreement – negotiations are ongoing with Brussels. It says businesses can already start preparing now for the implementation of the deal by:
- Engaging with relevant trade bodies or industry associations to ensure they receive sector-specific guidance and support
- Engaging with their supply chains to understand how changes could apply to them
- Sign up to Department for Environment, Food and Rural Affairs (Defra) email alerts for regular updates
- Respond to a six-week ‘Call for Information’ to share views on how government can best support them to prepare
You can explore further information about the deal on this gov.uk information page.
Food and drink members of the Chartered Institute can also sign up to the upcoming Special Interest Group webinar on 25 March, featuring updates and advice from customs and trade specialist Joe Goldsworthy and Dr Annette Kliemann, a diplomat in the EU delegation to the UK.
UK trade update 2: Get ready for the India FTA
Ahead of its implementation this spring, the UK government is urging businesses to make sure they are ready to benefit from the free trade agreement (FTA) with India.
A key step businesses need to take is signing up to the HMRC Origin Registration Portal. Without this one-time registration, businesses will “not be able to make valid origin declarations, and their customers in India will not be able to claim tariff preferences,” the Department for Business and Trade has said in an email to stakeholders. The UK-India FTA allows businesses to self-certify origin instead of obtaining an origin certificate from a competent authority every time a consignment is sent to India.
The Chartered Institute will be hosting a member-exclusive Lunchtime Learning webinar on how to benefit from preferential tariffs under the UK-India FTA on 23 April. It is also a hosting a free webinar tomorrow (10 March) about the UK’s FTAs in general, featuring an update on ongoing negotiations from DBT.
US tariffs latest: CBP currently rejecting refund requests
Over the weekend, the FT reported that US customs officials are rejecting attempts by companies to reclaim ‘reciprocal’ duties imposed by Trump last year under the International Emergency Economic Powers Act (IEEPA).
The Supreme Court last month ruled that Trump had overstepped executive powers in imposing the ‘reciprocal tariff’ regime. It is thought that the US administration could be liable to repay as much as $150bn in disputed import taxes.
Several businesses have rushed to submit ‘Post Summary Corrections’ to the US Customs and Border Protection (CBP) agency to retroactively amend duties. Under US customs law, importers have around 314 days after goods enter the market for their tariff payments to be “liquidated” or finalised.
“But CBP is rejecting their submissions,” the FT reports. “It is also suspending protests that companies are filing to secure IEEPA tariff repayments the CBP has already liquidated, according to people familiar with the matter.”
Politico has reported that the CBP has told the US Court of International Trade that it is “not able to comply” with the court’s ruling last week to halt the processing of the now-illegal reciprocal tariffs. The agency says it hopes to have a system in place to handle the refunds process within 45 days.
Also in the trade news
· The UK has told the World Trade Organization that the “status quo” of the multilateral trading system “is unsustainable”, in a policy paper seen by the FT
· Ending the UK’s de minimis threshold for low-value imports will drive up prices for consumers, a survey by the British Chamber of Commerce has found
· China is continuing to press ahead with plans for a leaders’ summit of Trump and Xi Jinping later this month despite the ongoing war in Iran, Politico reports
Key dates for the diary
· Monday: Trade minister Sir Chris Bryant faces the Business and Trade Committee at 4pm
· Tuesday: The Chartered Institute hosts a free webinar on the UK’s free trade agreements at 2pm
· Wednesday: The Treasury committee questions Rachel Reeves on the recent Spring Statement
· Thursday: EU defence ministers to meet in Cyprus
· Friday: UK monthly GDP estimates published
· Saturday: The final round of Six Nations rugby matches
· Sunday: The 98th Academy Awards ceremony takes place in Los Angeles and Ed Davey gives a speech at the Lib Dems’ spring conference
