While the focus of UK-EU relations has been ‘reset’ talks comprising agreements on agriproducts, energy and youth mobility, reports today (4 June) suggest that discussions are about to begin on the steel quotas set to be introduced on both sides of the Channel.
After yesterday’s update on US plans to reintroduce a form of ‘reciprocal tariffs’, there’s also a fresh round of political trade weaponisation from the Trump administration, as it applies fresh rates to Brazil.
Finally, a new report returns the UK-EU focus to mobility, with calls to make it easier for UK performers to tour in the UK.
UK to challenge EU steel tariffs
The UK’s business and trade secretary is set to meet his EU counterpart to discuss Brussels imminent plans to lower tariff-free steel import quotas.
Tomorrow (5 June), Peter Kyle is expected to relay to EU trade commissioner Maroš Šefčovič the “devastating” impact the UK steel industry says the new measures will have on their sector, the Guardian reports.
The EU is set to cut its tariff-free import quota by 50%, with the UK introducing a reduction of 60% on the same day, 1 July.
The meeting also follows a letter sent by Business and Trade Committee chair Liam Byrne to Kyle, warning that UK businesses will be negatively impacted by the UK quota reduction, as it will increase the cost of manufacturers that import EU steel products.
“The consistent message from businesses was that, in their current form, the measures risk serious and immediate harm to downstream industries that are critical to UK growth, exports, and national security,” he wrote in a LinkedIn post that shared the letter.
Steel industry representatives in the EU have also expressed concerns about how the UK’s measures will affect their own bottom lines.
European Steel Association, Eurofer, has warned Šefčovič that the UK’s quotas will be set “at extreme[ly] low levels”, enabling only a small fraction of the amount of goods like hot coils, tin mill and merchant bars to be exported before duties will apply.
Trump slaps Brazil with tariffs
Following the conclusion of the Section 301 investigations designed to give legality to the US reciprocal tariffs, the Trump administration has applied a 25% tariff rate to imports from Brazil.
The administration claims that Brazil engages in “unreasonable” trade practices, which “burden or restrict US commerce”.
The decision was met “with indignation” by Brazilian President Luiz Inácio Lula da Silva, who alleged it also followed hot on the heels of upcoming election rival and senator Flávio Bolsonaro visiting Washington DC last week. Lula referred to the new tariffs as “TariFlávio” and called the senator and his brothers “salesmen of the fatherland”.
Bolsonaro is the son of former President Jair Bolsonaro, who was convicted last year for trying to steal the 2022 election after Lula’s victory, and is the likely major opponent of Lula in the upcoming presidential election. The Bolsonaro family also enjoy close personal and political ties to many Trump officials.
Jamieson Greer, US Trade Representative, said that although Trump had “constructive” meetings with Brazilian officials, including Lula, there remains “substantial differences in resolving the issues identified in this investigation”.
In an official statement, the Brazilian government wrote that it hoped “the recommendations do not become effective tariffs” but would also “adopt every measure that is capable of reducing the damage that might be caused to the national economy, to the jobs and the income of Brazilian”, should they enter into force.
It’s not the first time the Trump administration has wielded tariffs for political purposes against the current Brazilian leadership. Last year, an additional 40% tariff rate was applied to Brazilian imports, after Trump accused Lula’s government of “politically persecuting” Bolsonaro for pursuing prosecution.
Lula has consistently been an outspoken critic of Trump’s tariff policy, winning him greater support from the public ahead of October’s election.
Creative sectors ‘reset’ needed
As we approach the tenth anniversary of the UK’s referendum on EU membership and the upcoming ‘reset’ of relations instigated by the current UK Labour government, European Movement UK have released a report calling for a ‘practical reset’ for the creative and culture sectors.
In its report, Creating Culture Together: A Practical Reset for UK-EU Creative Cooperation, European Movement UK claims Brexit has placed strain on the UK’s creative industries, notably performers seeking to tour in the EU.
In addition to restrictions on freedom of movement, with work permits and visas introducing new legal complexity for UK musicians and performers wishing to work in the EU, trade barriers have made touring and performing abroad more difficult.
The report advocates for a reduction in the cost of ATA carnets, for the temporary export of equipment. It says the documentation can cost £400 with security deposits of up to 40% on the value of equipment, raising the cost of UK orchestra touring in the EU to between £2,000 and £5,000.
In addition, a short-term mobility and work framework for touring performers would enable tours to go ahead undisrupted by the Schengen rules, which only enable UK citizens to spend 90 out of every 180-day period in the EU.
A relaxation of cabotage rules for movements of goods related to culture and performance and joining the EU’s cultural funding programme Creative Europe, would also be welcomed.
Cabotage refers to rules surrounding the transport of goods by a vehicle registered in a foreign country, which can include a lorry that carries out deliveries in another country before returning home.
Elsewhere in the headlines
- Substantial progress on Ukraine’s accession to EU, according to prime minister Yulia Svyrydenko
- A US trade judge has warned the Department of Justice that an appeal of his order to refund over US$166bn of unlawful tariffs could upend the process for claiming refunds
Yesterday in Trade
- The US announced 10-12.5% tariffs on a number of trading partners, including the UK, following the conclusion of a Section 301 investigations into force labour practices in supply chains
- Just in time, the EU and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) advanced an anti-tariff alliance
- The UK published its Customs Intermediary Standard for firms supporting UK trade
