The news that the US and China have extended their ongoing trade truce for another 90 days is being greeted with a sigh of relief by markets, businesses and consumers around the world.
Trump’s tariff regime is nonetheless continuing to cause tremors throughout the global trading system, with Brazil yesterday lodging a complaint with the World Trade Organization (WTO) and reports that Italy may be looking to shrink Chinese holdings at key Italian companies to avoid tensions with the US.
Also today, we include an update about a virtual open day that the UK Customs Academy is hosting in September for customs professionals.
US-China trade truce extended
President Trump yesterday signed an executive order to continue the US-China trade truce until 10 November, the BBC reports, with Beijing confirming it will reciprocate the pause.
The US levy on Chinese imports remains 30% with China’s tariffs on American goods staying at 10%.
If yesterday’s deadline for the previous pause had expired without such a deal, tariffs could have gone as high as 145% on Chinese exports to the US and 125% on US goods going the other way.
The suspension of these threatened rates will give time for further talks to address “trade imbalances” and “unfair trade practices”, the Trump administration said.
Brazil launches WTO dispute with US
The WTO yesterday confirmed that Brazil has requested the body launch dispute consultations with the US on tariffs. Trump has imposed a 10% duty on all Brazilian products and a further 40% levy on certain products of Brazilian origin.
Luiz Inacio Lula da Silva, the Brazilian president also known as Lula, has called the tariffs “unacceptable blackmail”. The duties have been introduced, in part, because of the ongoing prosecution of former Brazilian president Jair Bolsonaro for allegedly trying to stage a coup against Lula.
However, a Brazilian official told Politico that this form of pressure is only going to create an “impasse”.
“The way the White House has structured this, has organized this issue, does not give us any option, because if we decide to engage on the terms they have suggested, it would be a straightforward capitulation from our side and we cannot allow anybody to do, to get involved in issues pertaining to the internal politics in Brazil.”
Other experts told Politico that the tariffs will only push Brazil closer to other ‘BRICS’ nations – i.e. Russia, India, China and South Africa – and away from the US.
Also in Trump’s tariff world
Italy may be more likely to adjust its business environment to appease the US president, however. Bloomberg reports that the Italian government is “considering plans to curb Chinese investors’ holdings at key companies to avoid potential tensions with the US”.
US tariffs may already be affecting the Indian manufacturing sector, with duty rates of over 50% on Indian goods putting prime minister Narendar Modi’s ‘Make in India’ drive at risk, according to the FT.
Gold may escape Trump’s tariff regime, though. The president posted on social media yesterday that “Gold will not be Tariffed!”
This was likely in response to concerns that had arisen after a ruling from the US Customs and Border Protection agency, which reclassified the customs code for 100-ounce and one-kilogram gold bars in such a way that would have made both commodities liable to new duties.
Switzerland in particular will be relieved by Trump’s post, according to Politico, as the country exported about US$61.5bn worth of gold to the US in the 12 months leading up to the end of June this year.
What else is going on in trade
There’s more to global trade than Trump’s tariffs, though. Also in the news today:
· China’s new ‘Air Silk Road’ has opened 40 new freight routes connecting Europe to Xinjiang, Politico reports
· The European car market is facing potential collapse due to looming bans on petrol and diesel vehicles, Mercedes’ boss has warned the Times
· Tata Steel UK chief executive Rajesh Nair has been appointed the new Chair of UK Steel
Virtual open day for customs professionals
The Chartered Institute of Export & International Trade also yesterday announced that it will be hosting a virtual open day for the UK Customs Academy on 23 September.
The academy, which the Chartered Institute runs in partnership with Maersk and the Centre for Customs & Excise Studies, delivers online qualifications for customs professionals.
The open day will provide insight into how the qualifications work, the benefits they can bring and how to enrol teams onto the courses.
You can sign up to the event here and catch up with the rest of yesterday’s news in trade here.
