The week begins with the fallout from US-Canada trade talks breaking down over the weekend, despite promise that a long-term arrangement could be agreed.
There’s also an update on a key negotiating strand of the EU-UK ‘reset’ talks and Icelanders make a decision on whether to begin talks on EU membership.
Canada-US trade war
The week begins with the acrimonious break down of trade talks between US and Canada, with Canadian prime minister Mark Carney stating the countries are locked into a trade war.
Having suspended threatened 50% tariffs on Canada last Wednesday (22 August) in order to try and secure a trade deal, Carney said that last-minute changes to the deal by the US made accepting the terms untenable.
In a televised address to Canadians on Saturday (22 August), he declared “you’re at war when you’re attacked, and we got attacked”.In a televised address to Canadians on Saturday he declared “you’re at war when you’re attacked, and we got attacked”.
“We cannot accept what they’ve offered and we will not give what they’ve asked.”
US President Donald Trump claimed in a Truth Social post that Canada wanted “the benefits of being a State, without being one!!!”, – a possible reference to his comments that Canada would become “the 51st state” which inflamed bilateral tensions earlier in his second term.
US tariffs will be applied to US$20bn-worth of Canadian goods, in addition to existing tariffs on cars, lumber, and steel and aluminium – which Canada was attempting to reduce during the talks.
Carney claim the US was seeking exclusive access to the country’s critical minerals, while Politico reports that the attempted tariff reduction on steel, aluminium and cars was too much for the US administration, with sources suggesting US Commerce Secretary Howard Lutnick may have been involved in a veto.
US officials’ late requests by the Canadian team to reduce tariffs on heavy-duty trucks, introduced under Section 232 of the Trade Expansion Act 1962 were responsible. Both sides deny the claims.
Carney has vowed to match the US measures “dollar-for-dollar”, with Canadian tariffs on products including electronic goods, appliance, steel and dairy products set to be introduced on 8 September .
Youth mobility returns in EU-UK talks
The questions of concessions on EU student numbers and tuition fees has once again entered EU-UK ‘reset’ talks, with iNews reporting that Andy Burnham has offered Brussels reduced costs on EU student fees.
International student fees, which EU students must pay post-Brexit, can reach £60,000, according to Politico, with Burnham offering to cut this as part of the ‘reset’.
His predecessor Sir Keir Starmer had been planning to give home fees (£9,750) to 100,000 EU citizens. This was in order to avoid UK companies being cut out of European supply chains under its new ‘Made in Europe’ procurement drive, and subject to reduced tariff-free quotas and tariff rates on steel.
Labour MP Andrew Lewin, chair of the cross-party UK Trade and Business Commission, urged Burnham to strike an agreement on lowered EU tuition fees.
“I hope the PM makes it a priority to finalise a UK-EU youth mobility deal, so we can make good on the promise of allowing 18-30 year olds to travel freely across the EU.
“The Treasury will recognise that a youth mobility scheme will be a pro-growth measure and with overall migration sharply down, there is no reason at all for the Home Office to object.”
However, the proposals on reduced EU tuition fees have gone down poorly with universities, which argue this would significantly strain their budgets, which have already been cut by frozen home student fees.
Iceland EU membership referendum
Icelanders will have the opportunity on Saturday (29 August) to vote on whether or not the country should pursue EU membership.
Security concerns in the wake of Trump’s threats towards Greenland is the key issues around which joiners coalesce, while questions of sovereignty and retaining control of lucrative resources like fishing rights and critical mineral resources lead the “no” voters, according to AP.
The vote will establish whether Iceland resumes talks, with a second referendum necessary to decide whether Iceland joins. Icelandic PM Kristrún Frostadóttir told the country’s parliament earlier this year:
“It is quite clear that this vote is about getting a mandate to negotiate… The people will have the first say in this and they will have the last say in this.”
The vote is expected to be close, with EuroNews reporting that one July poll found 53% of voters approving joining, while another tied both sides at 46%, with 1 in 12 voters undecided.
The country’s previous attempts to join were disrupted following the financial crisis in 2009, and then again in 2015 after a new centre-right government came to power.
Iceland is currently a Nato member and has access to the EU single market via European Economic Area.
Elsewhere in the headlines
- Burnham will head to Ukraine this week, amid the country’s independence celebrations, bringing with him blueprints for long-range missiles
- Chinese e-commerce retailer Shein prepares to list on Hong Kong’s stock exchange, following reduced earnings reports attributed to the removal of the US’ ‘de minimis’ duty exemption on low-value goods
Other dates in the diary
- Monday: Ukraine President Volodymyr Zelenskyy’s speech to mark independence from the then-Soviet Union
- Tuesday: US and China trade figures released
- Wednesday: Ofgem announces quarterly price cap changes
- Thursday: UK employment data on those ‘Not in Education, Employment, or Training’ NEET
- Friday: US Federal Reserve chair Kevin Warsh keynote address to central bank policymakers
- Saturday: 60th Notting Hill Carnival
- Sunday: US Open begins
