Trade negotiations between the UK and Mexico could be set to resume late this year after over two years of hiatus.
There’s also the news that Middle East tensions have deescalated as US President Donald Trump reneged on his severe threats and announced a ceasefire with Iran.
While Iran has agreed to halt military action in the Strait of Hormuz, shippers have warned uncertainty still reigns and it will be months before standard operations through the waterway can continue.
Mexico-UK trade talks
The UK and Mexico could restart trade talks in the second half of the year, following overtures made by the Central American country’s trade minister in recent weeks.
Politico reports that Mexican trade minister Luis Rosendo Gutiérrez Romano is seeking a deal that would “complement” the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to which both nations are party.
The plan follows positive talks with Department for Business and Trade (DBT) permanent secretary Amanda Brooks last month following the World Trade Organization's ministerial conference in Cameroon.
Gutiérrez Romano also said that Mexico would pass legislation necessary to allow both countries to trade under CPTPP terms later this month.
Those terms include eligibility for zero-tariff exports across 99% of goods currently sold between members, per the UK government’s statement on the agreement.
UK exports to Mexico declined in the year to September 2025, according to DBT’s latest bilateral trade factsheet, falling 7.8% to £3.6bn. Imports rose over 5% to £3.1bn during the same period.
Attempts to update a trade deal rolled over from the UK’s EU membership stalled in late 2023 under Rishi Sunak’s Conservative administration.
Canada ratification
CPTPP progress with Canada has improved under the premiership of Mark Carney, who won leadership in a decisive election last year on an anti-Trump platform.
Canada agreed to ratify the UK’s accession to the bloc late last year during an October G7 summit, following a private meeting between Starmer and Carney. Legislation to enable the agreement’s terms to come into effect was introduced to parliament later that month.
Bilateral trade talks with Canada also stalled two years ago amid disputes over agricultural terms, with Canadian farming groups objecting to UK rules prohibiting the sale of hormone-fed beef.
Both Canada and Mexico have expressed an interest in more favorable trading terms with the UK and other trading partners in the last year, following Trump’s tariffs and his bid to renegotiate the joint North American trade pact, USMCA to favour the US.
Iran ceasefire
Having threatened Iran by saying a “civilisation will die” if it didn’t reach a deal with the US to reopen the Strait of Hormuz, Trump called off attacks last night, announcing that a two-week ceasefire had been agreed.
In a Truth Social post shared yesterday, just hours in advance of his deadline, Trump said that the ceasefire had been agreed in exchange for the “COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz”, adding that the administration had received a 10-point peace plan from Iran which it believes “is a workable basis on which to negotiate”.
UK prime minister Sir Keir Starmer welcomed the ceasefire, as 10 Downing Street announced he would travel to the Middle East to meet with Gulf leaders to discuss diplomatic efforts to maintain the ceasefire.
He said the ceasefire would bring “a moment of relief to the region and the world”:
“Together with our partners we must do all we can to support and sustain this ceasefire, turn it into a lasting agreement and reopen the Strait of Hormuz.”
His comments follow last week’s virtual meeting of a 40-strong coalition of nations, chaired by foreign secretary Yvette Cooper, to discuss security in the key waterway.
Shipping’s response
Iran’s foreign ministry said, that providing US attacks cease, it will allow ships safe passage through the Strait.
The world’s largest shipping firms are hesitant to consider a return to the route without further information and have warned it will take time before businesses can expect a return to any form of normalcy.
Hapag-Lloyd chief Rolf Habben-Jansen said it was “too early to judge” the safety of the passage in light of the ceasefire, estimating that it would be “at least the next six to eight weeks” before “a fully normal network” is established.
He also claimed the crisis is costing the firm US$50-$60m per week.
In a public statement Maersk said that it would also take a “cautious approach” to the Strait, and that while the ceasefire “may create transit opportunities”, it doesn’t provide “full maritime certainty”.
Financial consequences
Markets were more certain in the wake of the ceasefire, as stocks rose and oil prices fell.
Brent crude fell 15% to under US$95 per barrel – it’s lowest value since the start of the war at the end of February. London’s index of top firms, the FTSE 100, rose 3%, while Stoxx Europe 600 index rose 4%.
However, warnings about the long-term impacts of the crisis have persisted, with International Energy Agency chief Fatih Birol making headlines by pronouncing the current energy crisis as “more serious than the ones in 1973, 1979 and 2022 together”.
In an article published yesterday, Birol told Le Figaro newspaper that while European nations, Japan and Australia would feel the financial effects of the crisis, developing nations are set to struggle more with accelerating inflation, particularly higher food and fuel costs.
In the short term, the crisis in the Middle East is still affecting flights around the world. The BBC reports that Air India and Air New Zealand are the latest airlines to announce they’ll cut flights and increase ticket costs in response to rising fuel prices. China Eastern Airlines, the US’ United Airlines, Korean Air and Air France-KLM have also announced changes in fares or a reduction in flights to address surging costs.
About half of Europe’s jet fuel imports come from the Gulf, most of which typically transits through the Strait.
Elsewhere in the headlines
· Uncertainty from the Iran war has hit the UK housing market, with average property price falling to under £300,000 amid uncertainty
· CK Hutchinson, the Hong Kong firm formerly responsible for administering the Panama Canal ports, has taken Maersk to arbitration. The Danish shipper was granted control of one of the two ports by Panama, after it forced CK Hutchinson out
Yesterday in trade
· An update on US tariffs as the White House announced new measures on imports of pharmaceutical goods and clarification of rules surrounding metal imports
· A possible UK U-turn on rules surrounding imports of fur and foie gras as EU-UK negotiations progress
