The major trade story this week has been the state visit of HM King Charles III to the US, which achieved a tariff reduction in at least one area and made the current White House occupant much happier.
The big picture: The soft power of the British royals was on full display this week, as King Charles III visited the US. President Donald Trump, a noted fan of the royal family, appeared genuinely pleased to see the king, while US Congress gave a rare bipartisan standing ovation to the King and applauded many of the one-liners in his address.
This appears to have had some effect. US trade representative Jamieson Greer announced that whiskey would receive preferential access to the US. Although this was agreed under the UK-US Economic Prosperity Deal, Trump claimed “the King and Queen got me to do something that nobody else was able to do, without hardly even asking!”
Both the UK and Scottish governments have been lobbying for the 10% to be removed. Scotch whisky remains a major export product and the US is one of its top markets.
It remains to be seen, however, how long this good mood will last with the notoriously tempestuous Trump. UK prime minister Sir Keir Starmer remains under pressure for his appointment of Lord Peter Mandelson as UK ambassador to the US, and the White House and its allies have been critical of Downing Street over the past few weeks for its lack of support for the US military campaign in the Middle East.
Good week/bad week: The EU is celebrating a trade win. Today (1 May) the EU-Mercosur deal finally comes into effect, at least provisionally, after a 25-year negotiation marathon.
The European Commission (EC) claims the deal, with Brazil, Argentina, Paraguay and Uruguay, will create the world’s largest free trade zone of 700 million people, with tariff reductions on a number of different products and hopes for a 39% increase in the EU’s annual exports.
However, that might not be the end of the story. A challenge before the European Court of Justice is pending, with Poland joining MEPs in challenging the EU’s approval of the trade pact. While the deal applies ‘provisionally’ for now, it could be suspended if Europe’s top court rules against the EC.
Bad news for a pair of UN institutions. Politico reports that a last-ditch attempt at the WTO to agree institutional reforms and extend the e-commerce moratorium has failed.
At the same time, the International Maritime Organization (IMO) remains locked in negotiations over the Net-Zero Framework, amid reports that the US and Saudi Arabia are trying to delay the framework at a bi-annual meeting.
While nothing has yet been confirmed, some observers at the IMO think there is enough of a working majority to get the sustainability framework over the line.
How’s stat? US$25bn. The amount the US has spent on its war with Iran. Pentagon official Jules Hurst provided the first official estimate to US Congress on Wednesday (29 April), although this did not include the cost of rebuilding and repairing base infrastructure.
According to Reuters, this is equivalent to NASA’s entire budget for the year.
Quote of the week: “As Oscar Wilde said, ‘We have really everything in common with America nowadays except, of course, language’.
King Charles III to the US congress during his state visit, the first since his mother the late Queen Elizabeth II in 1991.
The week in customs: The Trade Remedies Authority published its three-year plan this week (30 April), setting out how it will prevent UK businesses being harmed by unfair international competition.
Among key objectives is a speedier roll-out of defence measures in 2026, greater access to guidance for SMEs and embedding trade remedies in UK industrial strategy.
What else we covered: A Chartered Institute sanctions expert offered insight on compliance best practice, after saying that the Middle East conflict is creating a “challenging environment” for export controls professionals.
Both China and the UK shared harsh words about the EU’s ‘Made in Europe’ scheme this week, with Beijing warning it could retaliate against the EC’s domestic production push.
Global Trade Today reviewed the trade stories behind the Welsh and Scottish elections taking place next week.
The UAE’s decision to leave the Organization of the Petroleum Exporting Countries (OPEC) this week could reshape the energy market for decades to come, according to oil watchers.
True facts: With Scottish Whisky, or ‘scotch’ as it is also known, making the headlines, it’s a good time to look back at the sometimes contentious history of the popular drink.
During the 16th and 17th century, illegal exports from the Scottish highland formed a significant part of the local economy. Many illegal stills were in operation due to taxation introduced by Scotland’s parliament decades earlier. Illicit trade only started to come to an end when the Excise Act 1823 eased restrictions on legal stills.
There was also the Whiskey Rebellion that took place in the US in 1791, lasting until 1794. This followed the imposition of taxes on whiskey production by the newly-formed federal government. Following the American Revolutionary War, the government tried to generate revenue to pay off its war debt and tried to tax whiskey, prompting a rebellion in rural Western Pennsylvania.
The first US President, George Washington, had to spend a considerable amount of his first term dealing with the rebellion, which saw only one ‘battle’ at Bower Hill and resulted in the deaths of several Pennsylvania rebels.
Following a military crackdown, the rebellion faded away. Only two men were convicted of treason for the rebellion. Both were later pardoned.
