Today’s trade news includes a significant new move in the tariff dance between the US, China and Mexico, as well as a set of no-confidence motions in the European Commission president after her State of the Union speech yesterday.
Mexico hits China with tariffs
The Mexican president, Claudia Sheinbaum, has agreed to levy a 50% tariff on imports of Chinese cars following pressure from the US.
AP News reports that Sheinbaum has announced new tariffs on 1,400 products up to a rate of 50%, which Mexican Treasury secretary Edgar Amador said were being implemented “within the discussion and future commercial conversations with our North American partners”, highlighting the role of the Donald Trump administration in the decision.
As well as vehicles, car parts and a range of other goods from Asian nations including textiles and electronics are also subject to the new rate.
The decision to put on a united front against imports from Asia follows previous conciliatory decisions from the US administration towards Mexico on trade, including frequent delays to hiked rates not enjoyed by the US’ northern neighbour, Canada. Sheinbaum has justified the tariffs as aimed at “strengthening national production” within Mexico.
Special Interest Groups
The Chartered Institute of Export and International Trade’s Special Interest Groups (SIG) continue next week, with a raft of online sessions taking place for our members.
Sessions on Tuesday include those catering to professionals in borders, ports and logistics and in manufacturing.
That is followed by an export controls session on Wednesday, before a food and drink SIG on Thursday.
Members of the Chartered Institute can review our full events programme here.
DBT cuts
The UK’s Department for Business and Trade (DBT) is to cut 600 roles from its international network, according to Politico.
It comes as part of an overall strategy to reduce the department’s head count by 20% before April 2027, and follows a Voluntary Exit Scheme in June.
Former UK trade negotiator James Manning said that the cuts would make it more difficult for the government to reach the targets set out in its recent Trade Strategy:
“While efficiencies are clearly needed given the fiscal challenges facing the government, reducing the UK’s overseas trade policy and promotion staffing at a time when the global trade system is under extreme strain is a clear risk.”
He also addressed the suggestion that representatives at the Foreign, Commonwealth and Development Office (FCDO) would pick up some of the responsibilities of those leaving, stating that it is “unlikely” it will be able to fully “plug the capability gaps this will inevitably create”.
Teesside plant
Politico’s London Playbook reported this morning that the government is set to confirm Teesside as an “AI growth zone”, after initial reports in the FT in July that the area had been selected for a new data centre for the technology.
Ben Houchen, mayor in the region, said that he has been in talks with the former AI adviser to the prime minister, Matt Clifford, as well as members of the government. The plans for the new centre at the former Teesworks site in Redcar, could “almost double the size of the whole of the data centre economy in the whole of the UK”, Houchen suggested.
There is a competing proposal for the site, however, with BP hoping that energy secretary Ed Miliband will instead sanction its plan for a hydrogen plant. The deadline for his decision is on 30 October following a delay.
Healey speaks
Defence secretary John Healey spoke yesterday at the Defence Investment Summit in London to say that “defence deterrence doesn’t actually only rest on our military forces”, but “also on the power of industry”.
He highlighted the publication this week of the government’s Defence Industrial Strategy, under which the government will direct £70m in new investment, under the current spending review period, into the sector as it aims to achieve the objectives in its Strategic Defence Review. He also drew attention to the government's recent success in striking a £10bn deal with Norway to supply warships.
A “skills deficit” as well as issues in procurement were among the problems his department is seeking to address, Healey said.
“A segmented approach now [will be taken] to procurement with time to contract targets in each statement, the creation of the National Armaments Director, the introduction of a five-year acquisition pipeline; [this] will all mean that we get equipment from the factory to the front line faster.”
The Daily Update will be doing a deep dive on the Defence Industrial Strategy exclusively for Chartered Institute members next week.
VDL challenge
After her State of the Union speech yesterday, European Commission president Ursula von der Leyen faces a two-pronged challenge from left and right in the European Parliament.
She is facing no-confidence motions from both the right-wing Patriots grouping and The Left. The Patriots contend in their motion that “the EU is weaker today than ever due to the persistent failure of the president of the Commission to cope with the most pressing challenges”, while The Left has aimed its ire at the recent deal with the US on tariffs.
The Left’s motion states that it “rejects the EU-US trade agreement as prejudicial, asymmetrical, and non-reciprocal, particularly with respect to tariff increases on EU exports versus zero tariffs for US imports”.
Furthermore, it “rejects the EU-Mercosur Agreement on the grounds that it poses a threat to farmers, the environment, and public health”, calling for the European Council to reject it.
Also in the news today
· Peter Mandelson, the UK’s ambassador to the US, has been sacked by prime minister Sir Keir Starmer over his links to Jeffrey Epstein
· The UK and US are set to sign a new, security-focused deal on technology during Donald Trump’s state visit to the UK next week, according to Politico
· The UN is holding an emergency meeting following the incursion of Russian drones into Poland yesterday
Yesterday in trade
· The UK relaunched trade talks with China with a meeting of the UK-China Joint Economic and Trade Commission (JETCO)
· Trump called on the EU to impose 100% tariffs on China and India in a bid to squeeze two economies that have been making major purchases of Russia’s oil, used to fund the country’s war in Ukraine
· Starmer launched a new ‘Budget Board’ to connect 10 Downing Street officials with those in 11 Downing Street
You can read it all here.
