International trade is making headlines across the globe in a way that it rarely does. From threats of increased tariffs, last-minute negotiations, retaliatory measures and WTO proceedings, a lot has happened!
With so much going on, we’ve broken everything down day by day to make sure you haven’t missed any of the latest stories from a wild week in trade.
Monday 3rd February:
On Monday we started the week by trying to digest all of the news from the weekend.
First, President Trump announced on Saturday that 25% tariffs on would be introduced on Tuesday 4th for goods originating in Canada and Mexico. The White House also announced an additional 10% tariff on imports from China.
Closer to home, the President stated that tariffs on the EU will “definitely happen” while the UK seems to be out of the crosshairs at the moment due to Trump remarking that “the UK is out of line, but I think that one can be worked out”.
In response to the scheduled tariff rises, both Canada and Mexico retaliated in kind with Canadian Prime Minister Justin Trudeau saying he would “not [be] backing down” but it “didn’t have to be this way”. Similarly, China planned their own retaliatory measures and threatened to file a complaint with the World Trade Organisation.
However, by the end of Monday, both Mexico and Canada were announcing agreements with the U.S. to postpone the introduction of increased tariff rates for 30 days. The agreement involved both Mexico and Canada making significant commitments in regard to border security, with immigration and illegal importing of Fentanyl being the two reasons that Trump wished to impose the tariffs originally.
Tuesday 4th February:
On Tuesday, we saw no increase in tariffs between the U.S. - Canada and the U.S. - Mexico due to the eleventh-hour agreement from the day before.
However, we did see the introduction of a new 10% tariff on China. President Trump promised that the 10% tariff would only be the beginning and “very, very substantial” measures would be introduced if China failed to meet some of Trump’s terms.
In response, China retaliated by announcing that from February 10th, they would be placing a new 10% tariff on US crude oil, agricultural machinery, large displacement cars and pick-up trucks as well as a 15% tariff on coals and liquefied natural gas products.
Additionally, China announced a probe into Google, however the search service has been blocked in China since 2010, and they added PVH (owner of Calvin Klein and Tommy Hilfiger) to their ‘unreliable list’.
Away from the U.S., the UK’s Minister for European Union Relations, Rt.Hon Nick Thomas-Symonds, delivered a speech in Brussels in which he stated that “we need to reduce barriers to UK and EU trade”, that it is “vital that we re-joined Horizon” and “making the case for closer working with our allies in the EU”.
Wednesday 5th February:
The World Trade Organisation has announced that China has officially initiated a dispute complaint regarding the U.S. and their recently introduced tariff measures.
The official release from the WTO states that China is claiming that the 10% additional duty that the U.S. has introduced on all goods originating from China, as well as the measures regarding the availability of drawback and de minimis treatment, fall foul of the U.S. most favoured nation obligations.
The request for consultations formally initiates the WTO dispute process. The consultation period gives the parties an opportunity to discuss the matter and to hopefully come to a solution without further action having to be taken. It is similar to undertaking mediation prior to a court case.
If, after 60 days, no solution has been found, China can request adjudication by a WTO panel.
Thursday 6th February:
Conflicting messages were released concerning the U.S. and the Panama Canal. President Trump has previously claimed that he wishes to take back ownership of the Canal due to the influence of China. Earlier this week the Secretary of State Marco Rubio visited Panama and demanded they made “immediate changes” to the “influence and control” of China.
On Thursday, the State Department released a statement on X that its government vessels “can now transit the Panama Canal without charge fees, saving the US government million of dollars a year”. This statement was however refuted by the Panama Canal Authority who said that they were “empowered to set tolls and other fees for transiting the canal [and they had] not made any adjustments to them”.
Friday 7th February:
From today, safeguarding measures have been introduced to suspend commercial imports of:
Hay and straw originating in Germany, and
Certain animal by-products of susceptible animals, where the animal by-product originates from Germany.
The Department for Environment, Food & Rural Affairs (DEFRA) explained that these measures will be in place indefinitely to help ensure that Foot & Mouth Disease which is currently present in Germany, does not spread to the UK.
Full details on the restrictions and the products impacted can be found at these links:
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