Displaying items by tag: tariffs

The Government has stated it will not immediately retaliate against the renewal of US steel and aluminium tariffs, instead opting for a measured approach. Trade minister Douglas Alexander emphasised the need for a 'cool and clear-headed' response rather than a knee-jerk reaction. The 25% tariffs, set to take effect from 12 March, are designed to reduce foreign imports and boost US steel production. While the UK only exports 10% of its steel to the US, certain specialist suppliers could face severe impacts; the tariffs could also lead to an influx of cheaper foreign steel into the UK, undercutting domestic manufacturers. In response, UK Steel and unions are urging the Government to increase domestic steel purchases and protect jobs. Other nations, including Canada and the EU, have condemned the tariffs and vowed retaliatory measures, while the UK remains committed to diplomatic engagement. Donald Trump, who imposed similar tariffs in 2018, has indicated no exemptions this time, except possibly for Australia.

China has retaliated against new US tariffs by imposing 15% duties on certain energy imports and 10% tariffs on crude oil, vehicles, and machinery. It also announced export controls on key minerals like tungsten and added two firms to its ‘unreliable entities’ list. Additionally, China launched an antitrust investigation into Google. On 2 February Donald Trump had imposed 10% tariffs on Chinese goods, part of broader trade measures also targeting Mexico and Canada. He has briefly paused tariffs on those two nations following talks. China denounced the tariffs at the World Trade Organisation, warning of economic disruption. The dispute extends beyond tariffs, touching on security and fentanyl production. While Beijing aims to avoid an escalating trade war, China’s slowing economy adds pressure. Meanwhile, Trump has indicated that he might impose tariffs on other nations.

The EU has signalled its readiness to negotiate with Donald Trump, hoping to avoid a damaging trade conflict. Ursula von der Leyen highlighted growing global competition and warned against trade policies that disrupt economic bonds. Trump’s administration has begun investigating US trade deficits and unfair practices: Germany is a potential target, but chancellor Olaf Scholz has expressed cautious optimism after his first contacts with Trump's administration. Von der Leyen reaffirmed the EU’s commitment to collaboration with global partners, including India and China; she also voiced support for the Paris climate agreement, which Trump has exited. Noting that trade between the USA and the EU is worth 1.5 trillion euros, she said, ‘No other economies in the world are as integrated as we are. So our first priority will be to engage early, discuss common interests, and be ready to negotiate.’  EU officials see Trump’s policies as a wake-up call to fix their economies and become more competitive.

Justin Trudeau’s government is facing turmoil following the abrupt resignation of his finance minister, Chrystia Freeland. This was sparked by disagreements with Trudeau on how to handle the threats made by Donald Trump, who has vowed to impose a levy of 25% on imported Canadian goods unless the shared border is made more secure. Freeland accused Trudeau of prioritising ‘costly political gimmicks’ over addressing the economic risks posed by Trump’s policies. Her departure blindsided the government, bringing Trudeau and his shaky minority Liberals to the brink - exacerbated by losing a by-election in British Columbia. There have been calls from opposition leaders but also members of his own party for Trudeau to resign, and his approval rate is now only 28%. With the next federal election due by October 2025, Canada's political landscape appears increasingly uncertain.

David Frost, Britain’s trade deal negotiator, has warned the Cabinet that Brussels talks are heading for collapse. He told ministers to ‘take the moral high ground’ when speaking to their counterparts across the Channel in the face of Brussels stubbornness. He urged them to step up their ‘no deal’ planning in case talks over a new trading arrangement break down. Downing Street is preparing to issue warnings that the UK is heading for an ‘Australia-style deal’ - which in reality means tariffs on imported and exported goods under World Trade Organisation terms. Boris Johnson is expected to tell the EU27 to set new rules for their negotiator Michel Barnier, otherwise any hopes of a deal fade. If progress is not made at the next online UK-EU negotiators meeting there is talk in Whitehall of a British walkout. A senior Government source said, ‘Breakdown is entirely possible.’