The recent move by the UK to develop a “last-resort” tool to defend itself against outside coercion comes as British and European politicians are less willing to play nice with the US.
In a week which also saw UK European relations minister Nick Thomas-Symonds and EU trade commissioner Maroš Šefčovič talk about the relationship reset, many nations are now operating independently from the US, as both the Middle East war and lingering resentment over tariffs hit diplomatic relations.
The Big Picture: Europe might be moving further from the US economically and diplomatically, just as the UK-EU reset edges closer.
On Thursday (16 April), trade minister Sir Chris Bryant said that the UK needed “additional, last-resort tools” to defend against “adverse economic pressure”. Commentators compared it to the EU’s Anti-Coercion Instrument (ACI), otherwise known as the ‘trade bazooka’. Former UK chief negotiator, Crawford Falconer, said it was the first step to Westminster having a “slightly more macho posture” on the international stage.
The development of this tool comes as US President Donald Trump hints that he could seek to renegotiate the UK-US Economic Prosperity Deal (EPD) as part of his dissatisfaction with the UK and other allies over the Iran war. Many normally friendly nations have refused to back US and Israeli military action, much to Trump’s consternation.
Prime minister Sir Keir Starmer has said he is “fed up” of the war, while Chancellor Rachel Reeves described the war as a “mistake”. Leaders of other major European allies, including Italy’s Georgia Meloni and Spain’s Pedro Sánchez, have also distanced themselves from Trump over the war.
Good week/Bad week: The EU and Ukraine have both gained an ally. Long-time Hungarian PM Viktor Orbán was swept from office by opposition leader Péter Magyar. The scale of the victory surprised some commentators, with Magyar securing enough MPs in parliament to begin to overturn many of Orbán’s constitutional changes.
Magyar is far from a Europhile and governs a public that remains sceptical of Ukraine. However, he has indicated that he is more than willing to work with Brussels on some issues, including on support for Ukraine and on Russian sanctions, and is not as close to Moscow or Washington as Orbán. European Commission President Ursula von der Leyen and Ukrainian President Volodymyr Zelenskyy wasted no time in expressing their congratulations, while Moscow distanced itself from the Orbán regime.
It’s been a bad week for Reeves. At the start of the week, the International Monetary Fund (IMF) warned that the UK would be particularly badly hit by the supply chain shocks as a result of the Middle East war. The IMF cut its forecast for UK GDP growth this year to 0.8%, down from 1.3%, and warned that inflation would pick up “temporarily. This would put the UK’s economic growth towards the middle of the pack of advanced industrial nations in terms of economic growth, behind Canada and the US and ahead of Japan and Italy.
How’s stat: 5%. China’s quarterly growth for Q1 hit 5%, despite the Iran war, as high-tech manufacturing helped the exporting superpower survive a difficult global environment
Quote of the week: “We don’t recognise the number that was published. We don’t know what it’s going to look like because, clearly, this is a very volatile, unpredictable situation. But what I can tell you is that we will be doing everything in our power to minimise the impact on customers.”
Tesco CEO Ken Murphy issues a flat denial over warnings that food inflation could soar to double digits this year and concerns over the food supply chain.
This Week in Customs: HMRC released information on the Certificates Exchange System (CERTEX), which went live on Monday (13 April).
A Chartered Institute webinar was told that customs audits are becoming a more common feature of the UK trading landscape, and that businesses should expect checks to increase now that HMRC has made declaration data freely available.
Export Controls updates: The FT reported that UK national John Michael Ormerod was charged with money laundering and breach of the Russian sanctions regime by the National Crime Agency. The 75 year-old Ormerod was previously added to, then removed from, the UK sanctions list.
The Office of Financial Sanctions Implementation (OFSI) announced their three-year strategy for 2025-2028, with a focus on helping businesses understand sanctions and the implications of non-compliance as well as taking more immediate action against any breaches.
The US Attorney General for West Texas announced that Kamo Kirakosyan, an Armenian national, pled guilty to a criminal conspiracy to export goods from the US to Russia, via Armenia, without the requisite licence. He faces up to five years in prison and will be sentenced at a later date.
Other things we covered: Businesses approved of joining the Pan-Euro Mediterranean Convention, according to responses from a government consultation.
Air rates continued to climb while ocean freight remained steady, amid questions over the blockade of the Strait of Hormuz.
The US finally opened its refund system for the now-invalid ‘reciprocal tariff’ regime, according to filings in US court.
True facts: Hail to the peacemakers. Today in 1986, the Netherlands and the Isles of Sciliy brought a 335-year-old war to an end.
The longest known war in history featured no casualties, no invasions and not a shot fired in anger. To quote Atlas Obscura “Neither side even remembered they were still at war until someone checked the paperwork,” and essentially continued as a result of the Sciliy isles not being named in the peace treaty between the UK and the Netherlands in 1651.
Although historians and lawyers question whether a state of war ever existed between the two sides, the Dutch Ambassador signed a peace treaty with the islands on a visit on 17 April 1986, bringing an end to the Driehonderdvijfendertigjarige Oorlog or three hundred and thirty five years' war.
