This week, UK car manufacturers will get a major boost as they seek to make the most of a tariff-free quota on their exports to the US, while China’s manufacturing sector appears to be taking a hit from tariffs.
UK-US deal enters force
Today (30 June) is a significant day for UK auto manufacturers exporting to the US, as a deal to drop US tariff rates on UK-made cars to 10% for a quota of 100,000 units enters force. Reciprocal cuts to the UK’s import duties on US beef and bioethanol are also being implemented.
As noted by the BBC this morning, however, there is no movement yet on a reduction in the US tariff on British-made steel, which sits at 25%. This could rise to as high as 50% if a negotiation deadline of 9 July does not yield an agreement. It remains to be seen whether the UK can secure a reduction to the rate, which US president Donald Trump and his administration have suggested could be contingent on assurances around origin.
The managing director of Sheffield-based steel firm Marcegaglia, Liam Bates, told the BBC that the lead times for its US-made steel, used in its stainless steel products, were longer than the time remaining to the 9 July deadline. “It gives us an extremely hard decision to make as to how we can continue production in the US,” he said, illustrating frustrations from some in industry around the pace of negotiations.
On potentially delaying the deadline, Trump told Fox News yesterday that "I don't think I'll need to” but that "I could, no big deal”. Reporting from the Guardian, meanwhile, suggests that British carmakers are set to “invoice cars like fury”, according to Aston Martin CEO, Adrian Hallmark.
China struggles?
China’s exports are under the spotlight again this week, after the country’s National Bureau of Statistics released numbers showing a sustained contraction in the country’s manufacturing output.
As reported by Reuters, Chinese manufacturing fell for a third consecutive month in June, with a purchasing managers’ index (PMI) of 49.7 demonstrating a contraction in line with economists’ predictions. While new export orders reached 47.7 from 47.5, the sub-50 number shows a sustained drop.
The numbers suggest pressure on the country’s manufacturing sector from US tariffs despite a recent agreement on import duties. As the FT reported today, low-price Chinese goods giants Teemu and Shein have seen a drop in their monthly active US users of over half, after the US changed its ‘de minimis’ import duty exemption regime.
The Chinese government’s export-led growth strategy may be making way for a pivot to boosting domestic consumption, according to remarks from the country’s premier, Li Qiang, in remarks to the World Economic Forum last week.
Some of the country’s exports may be getting tightened more deliberately, however, as China appears to be expanding the scope of export controls initially restricted to rare earths and magnets. “As long as it contains even a single sensitive word [such as magnet], customs won’t release it — it will trigger an inspection, and once that starts, it can take one or two months,” a Chinese magnet exporter said.
CERTEX delay
The implementation of the government’s CERTEX system for verifying licence data on declarations for goods movements was not implemented on the original planned date of 28 June last week, HMRC has noted.
In a message to traders, HMRC said that they “may need to take action depending on whether they are moving goods from Great Britain to Northern Ireland or from the Rest of the World to Northern Ireland”.
“They should continue to follow standard processes for controlled goods in Northern Ireland including reporting for inspections where required to do so.”
A new date for CERTEX’s implementation has yet to be set. The delay also does not affect the use of the new Common Health Entry Document (CHED) reference format on traders’ declarations from 28 June 2025. “We encourage traders to use the new format in readiness for the implementation of CERTEX at a later date,” HMRC added.
Other dates for the diary
- Monday: UK GDP data published
- Tuesday: Heads of Federal Reserve and Bank of England at European Central Bank (ECB) meeting
- Wednesday: European Commission to reveal its proposal for 2040 EU climate targets
- Thursday: Services PMIs published for UK, US, Germany and others
- Friday: EU inflation rate data published, US Independence Day
- Saturday: One-year anniversary of Labour’s return to government
- Sunday: 2025 BRICS+ summit begins
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