The government is expected to set out a new approach against Israeli settlements that could include a trade ban, with suggestions from high-level US diplomats that this could trigger a response against British businesses.
Canadian tariffs also came into effect today as the US-Canada trade dispute drags on, and the UK’s export credit agency has announced a new raft of funding for projects in Angola that could unlock millions in opportunities for UK exporters.
Israel sanctions announced
The UK is expected to adopt a far tougher stance on trade with illegal Israeli settlements, raising fears of retaliation from the US.
Foreign secretary Ed Miliband is set to announce a ban on the trade of goods and some services with the settlements, as part of a UK restatement of support for the two-state solution. The full details are to be announced in the House of Commons today (8 September), the BBC reports, and could include measures impacting many agricultural products like avocados and mangos.
Prime minister Andy Burnham used a call with US President Donald Trump yesterday (7 September) to warn him that the sanctions were incoming.
The US Ambassador to Israel, Mike Huckabee, told BBC’s Newsday programme that “I think without a doubt there will be” a reaction from the US.
Huckabee, an early supporter of Trump whose daughter Sarah served as the president’s press secretary, added that any action could have “huge economic impact on British businesses”.
Israeli ministers condemned the announcement and advocated for the British ambassador to the country to be expelled.
The UK has a free trade agreement with Israel, but preferential tariff treatment does not apply to goods being exported from the occupied West Bank. Documentation must be provided to this effect when claiming tariffs.
The House of Commons says it is “difficult” to obtain data for UK trade with these occupied territories, with some estimates saying it is worth around £38m per year compared to UK-Israeli trade which was worth £5.9bn according to the latest government factsheet.
EU member states like the Netherlands, Belgium, Spain and Ireland have taken similar measures in the past, while Germany and the Czech Republic remain opposed to an EU ban on settlement trade.
Sanctions fine
HMRC has announced the latest compound settlement with a business for breach of export controls, issuing a penalty worth over £7m.
According to the governments notice, between July 2022 and January 2023 Illumina Cambridge breached regulation 25(1) of the Russia Regulations by suppling sanctioned goods from one entity within their corporate group to another.
The settlement, which totalled £7,438,840.13, was issued after a voluntary disclosure by the company, which cooperated fully and has ceased all business involving Russia according to HMRC.
The government department added that:
“The case highlights how sanctions breaches can occur when UK businesses are involved in supply chains that result in sanctioned goods being supplied indirectly to Russia (or other countries subject to trade sanctions), even when no goods have been exported from the UK.
“It also shows the importance of checking UK sanctions, even if the goods are not sanctioned in the place of origin or of export.”
Canada tariffs
Canada’s counter-tariffs on US goods have come into effect today, as another front opens in Trump’s tariff war.
Ranging from 15% to 50% on a variety of goods worth up to US$27.6bn, the tariffs were a direct response to US measures imposed after the breakdown of trade talks last month.
“The government of Canada will match the US section 338 tariffs – dollar for dollar”, the Canadian finance department said.
The measures cover a variety of important areas, such as steel, pulp, electronics and dairy, and came into effect at midnight in Canada.
Both sides are reportedly braced for a long standoff, as the enmity between Canadian PM Mark Carney and Trump shows no signs of abating.
On social media, Trump suggested that there should be a boycott of Canadian aerospace manufacturer Bombardier, saying that “their products aren’t good enough! Over 50% of their revenue comes from the US”.
UKEF contract boost
UK Export Finance (UKEF) has announced it is providing £655m in financing to support the construction of four infrastructure projects in Angola, a move with the agency says will unlock £167m in contracts for UK businesses.
The financing will include the construction of Cabinda Airport, as well as refurbishment of the Camama-Viana road and electrification across the Angolan province of Uíge.
Department for Business, Innovation, Science and Trade (BIST) secretary Jonathan Reynolds said that this project would “strengthen the UK-Angola partnership, helping to create jobs across the UK and deliver on our mission to drive growth in every postcode”.
UKEF often provides backing to projects if its products and services are used and has supported projects in Angola in the past.
UKEF CEO Tim Reid added:
“Angola is leading an ambitious national infrastructure programme, and we want British exporters to be front and centre bringing their expertise.”
Other trade headlines
· Data from the Recruitment & Employment Confederation and KPMG suggested that permanent placements for employment increased for the first time in four years in August
· China’s exports rose by 25% in August when compared to the same month last year, according to the FT
· The UAE said its energy exports would not be “held hostage” by the ongoing war in the Middle East, as it explored alternative routes to move its oil and gas
Yesterday in trade
· Chancellor John Healey said that his mission was to “make Great Britain, growth Britain” again, in his first major speech since entering No 11
· Reynolds said that the government would not intervene in the Jaguar Land Rover redundancy process
· Chartered Institute director general Marco Forgione argued against countries “putting up barriers” at the Reform UK party conference
