While yesterday (10 December) brought news that the US’ tariff deal with Indonesia was at risk, today (11 December) negotiations are ongoing for a fresh deal with India, after it was hit with heavy tariffs over Russian oil purchases earlier this year.
Elsewhere, there is a spotlight on the European economy, which may have weathered tariffs better than expected.
US-India trade talks
India has talked up the possibility of a bilateral trade deal with the US following a meeting with the US deputy trade representative.
India’s Department of Commerce posted on X yesterday to say that commerce secretary, Rajesh Agrawal, had met with Rick Switzer to exchange views on US-India trade. The two sides will seek a “mutually beneficial bilateral trade agreement”, the post added.
Switzer is taking part in a two-day visit to India to discuss tariffs imposed by the US over India’s purchases of Russian oil. Indian exports to the US fell 9% year-on-year in October, down to US$6.31bn for the month.
Washington has been keen to secure concessions on India’s tariff and non-tariff trade barriers to US exports as part of the negotiations.
ECB optimism
The president of the European Central Bank, Christine Lagarde, has said that she expects the bank to revise up its expectations for European growth at the publication of its forecasts next week.
Lagarde said the European economy had weathered US tariffs better than expected, while the euro had largely held its value and employment remained strong in the EU.
“In the last projection exercises, we have upgraded our projections. My suspicion is that we might do that again in December.
“With a track record of around 2% inflation and a medium-term projection at 2%, I would say again, that we are in a good place.”
More broadly, she said, the European economy is “quite close to [its] potential”.
Brexit and customs union in spotlight
Leader of the opposition, Kemi Badenoch, has cited Brexit as among the “shocks” faced by the UK economy in recent years.
The remarks, delivered at a speech in London yesterday, built on previous comments from the Conservative Party leader that the Tories had moved to “leave the EU before we had a plan for growth outside the EU” while in government.
It also came as prime minister, Sir Keir Starmer, again ruled out joining an EU customs union, a manifesto commitment at the 2024 election, following a vote by 100 MPs in favour of a bill requiring negotiations to be opened on a bespoke union.
The PM argued that joining a new customs union would jeopardise the tariff deal struck with the US earlier this year, and built upon recently with a further agreement to avoid new duties on UK pharmaceutical exports to the US. It could also have implications for the free trade agreement agreed this year with India, Starmer suggested.
Chancellor Rachel Reeves also spoke to a treasury select committee yesterday, where she said “I reserve the right to take action” on the public finances “at any point” should she deem it necessary to make changes to taxation or spending.
Reeves said it was “the right thing” to change the government’s taxation policies to create additional headroom against its fiscal rules at the recent Autumn Budget.
Elsewhere in the headlines
- The Department for Business and Trade’s Business Growth Toolkit offers support and training for SMEs looking to expand
- A Venezuelan oil tanker has been seized by the US, which Washington said was transporting sanctioned oil
- BMW’s chief executive, Oliver Zipse, has said planned ‘Made in Europe’ requirements within the EU are “very dangerous” and could “cut [Europe] out of the [global] innovation race”
Yesterday in trade
- The US’ tariff deal with Indonesia is at risk over the Asian nation’s reluctance to implement measures lowering non-tariff trade barriers and commitments on digital trade, according to reports
- US president Donald Trump accused European leaders of being “weak” on Russia and domestic issues
- US Trade Representative Jamieson Greer warned US trade policy would not “go back to how it was before”
