There’s been a setback for US President Donald Trump’s tariff regime as American lawmakers, including some from his own party, voted down a rule upholding the measure, while EU lawmakers find some agreement on progressing their trade pact with the US.
Today’s trade news also features a UK decision on how US tech firms operate within the country and the latest expert insight on EU de minimis changes.
US House votes against Trump on tariff measure
Already under scrutiny in the Supreme Court, Trump’s tariff regime is now under fire in the country’s legislative branch, as lawmakers in the House of Representatives – Congress’ lower chamber – rejected a Republican measure to prevent challenges to the regime.
The FT reports that the measure was struck down with 217 House members voting against it, which included all 214 Democrats and three Republicans lawmakers.
Although Trump’s executive office gives him the authority to veto votes in Congress, Republican rebel votes may be enough to stay his hand, indicating a level of opposition within his own party.
In the context of the impending Supreme Court ruling on the legality of the tariffs, the Republican representative that proposed the measure, Mike Johnson, said his aim with the proposal was to “allow a little bit more runway for this to be worked out between the executive branch and the judicial branch”.
However, the vote’s result could not enable Democrats to force a vote on measures blocking Trump’s tariffs on certain countries, including Canada.
EU-US deal progress
Progress was made towards the implementation of the US and EU’s trade deal yesterday to reduce new tariffs, as the European parliament reached agreement on the pact.
Parliament had been at an impasse on how to progress the deal, delaying the removal of tariffs on US industrial goods and lobster, generating growing frustration in Washington.
Measures agreed by Centrist groups that got the deal over the line include a new suspension clause in case Trump once against increases military rhetoric against the semi-autonomous Danish territory Greenland, and a commitment to review the deal if the lowered tariff rate of 15% on European goods is not introduced within six months.
Politico reports that parliament’s trade committee chair Bernd Lange said that if the US failed to reduce rates on over 400 products within the time period “we will re-establish the tariffs for steel and steel relevant products inside the EU, automatically”.
Although pleased with the outcome, backed by a wide centrist coalition of the European People’s Party, Renew, the Socialists & Democrats and the Greens, Lange expected more difficulty in getting European capitals to accept the new measures.
If the trade committee accepts the new measures this month, wider EU institutions will discuss them in March.
UK rejects new rules on US tech
The UK’s competition watchdog has chosen not to follow in the EU’s footsteps, rejecting calls to introduce new rules on how Apple and Google operate their app stores.
Under its Digital Markets Act, the EU now requires Apple to share data with rivals and allow Apple users to install apps through other platforms beyond its own ‘store’.
By contrast, the UK’s Competition and Markets Authority said yesterday that it would accept “commitments” made by the tech firms to address issues. These include ranking apps in a “fair, objective and transparent way” and Apple giving developers access to its systems.
The CMA’s decision also didn’t address the ‘Apple tax’ – a 15-30% commission on app purchases, subscriptions or in-app transactions carried out through its store.
The watchdog’s chief executive, Sarah Cardell, described the outcome as “important first steps”, however competition lawyers warned these measures don’t go far enough. Speaking to the FT, a former CMA director, Tom Smith, said this first announcement was “so lightweight that it barely exists” and criticised the measure not being legally binding.
EU set for ‘biggest change’ to customs for 50 years
The removal of the EU’s de minimis threshold, below which imported goods aren’t subject to customs charges, is a seismic shift in the bloc’s trade policy.
That’s according to Gorden Wright, CT strategies European operations director, who spoke on the latest instalment of Chartered Institute of Export & International Trade’s Global Trade Live webinar programme yesterday.
Insights into how the EU’s rule change aligns with broader trends in global trade and what it means for small businesses were also discussed.
Elsewhere in the headlines
· HMRC have released new information about an upcoming duty on vaping products
· The chief executive of Tata Steel urged the government to take strong measures when reviewing the UK’s steel safeguards, due to expire in two months, in order to prevent an influx of cheap imports
Yesterday in Trade
· Experts have warned that UK firms need to consider compliance more carefully in light of recent Russia sanctions breaches
· EU members grappled with their inability to decouple for US tech firms
· UK MPs began debating the content of its trade deal with India in parliament, ahead of formal implementation
