As the weather cools and the summer draws to a close, the major headlines this week have been grabbed by US and Canada’s to-the-wire trade talks.
In bad news for global shipping, the Panama Canal Authority announced a reduction in the number of ships that could transit the waterway, and the UK received bad news on the budget, but positive indicators on economic expansion from the latest Purchasing Managers’ Index (PMI).
The big picture: The week began with the prospect of another tariff announcement, as the deadline for Canada to reach an agreement with the US approached.
US President Donald Trump had given the US’ northern neighbour a month to address what he deemed unfair trade practices towards US imports of goods, including dairy products, cars and alcohol. A 50% tariff would have been applied to approximately US$20bn in Canadian goods from Wednesday (19 August), if Ottawa failed to take action.
At the last moment, the White House announced a three-day grace period, with subsequent reports alleging that an agreement was close.
The deal could include a reduction of tariffs on Canadian steel imports from 50% to 25%, along with concessions to get US alcohol back in Canadian retailers following bans by some provinces, plus concessions on dairy licences.
There’s also been talk of renewing a transnational oil pipeline rejected by previous Democrat presidents.
Politico reports that several figures on both sides of the negotiations have said that rather than a case of so-called “Trump Always Chickens Out”, the “maximalist negotiation” tactic paid off for the US.
Canadian Senator Peter Boehm, chair of the Senate Committee on Foreign Affairs and International Trade, told the publication that “there was always a sense that there have to be talks, but invoking [the tariffs] did provide the leverage to do that, at 50%.”
Good week/bad week: The latest flash UK Purchasing Manager’s Index (PMI) found that the UK economy expanded by its fast pace since April.
Driven by the services sector, the composite PMI hit 52.5, a 4-month high. Anything above a reading of 50 indicates economic expansion, and, overall, the private sector expanded at the highest rate in four months as consumer demand rose.
However, the PMIs also found that inflationary pressures remained while export sales were weak. Chancellor John Healey’s challenge for his first budget remains, after the government borrowed £2.3bn more than expected last month.
Bad news for global shipping as the Panama Canal Authority (ACP) announce it would cut the number of vessels that can transit through the waterway from September, owing to El Niño weather patterns.
Yesterday (21 August), the ACP announced that from September 15 the number of ships given a slot to transit would fall from 36 to 32 per day. The reduction will be phased in from 3 September.
Slots are highly coveted. Earlier this month one ship reportedly bid US$4m to jump the queue and secure an earlier slot, double the average bid.
El Niño effects are anticipated to be more pronounced this year – exacerbated by climate change – with lower rainfall in Panama making transits less tenable.
Similar measures were taken in 2023 as a result of low water levels, with the number of vessels permitted to transit falling from 38 to 22.
How’s stat? 100 hours. That’s the target for the Ultra-Long Duration Energy Storage Challenge, launched by a pair of government departments yesterday (20 August).
The Department for Business, Innovation, Science and Trade and the Department for Energy Security and Net Zero jointly launched the competition, which will see grants offered to research projects on new technology to store energy, as the government tries to improve the reliability of renewable power sources.
Quote of the week: “Businesses need to help the government with their feedback to create a policy that will deliver transparency and traceability without further cost and complexity stacking.”
Imports Advisory Practice lead Ilona Kawka on the government's digital product records consultation.
The government is calling on traders to share their experience of using records like the EU’s Digital Product Passports, as it reviews the introduction of similar digital documentation.
The week in export controls: Austria's security and intelligence department foiled an international sanctions-evasion network using shell companies and forged end-user certificates to supply over €3.3m in controlled industrial goods to Russia.
In the US, the proposed Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 was passed introduced into the US House of Representatives, having previously passed the Senate. The act enables the US to impose tariffs of up to 100% on imports from countries that are major purchasers of Russian oil and gas.
This could potentially hit India – a country that was previously levied with one of the highest US tariffs rates (50%) as a result of Russian oil purchase.
What else we covered: Traders can learn more about the Customs Intermediary Standard through our webinar write-up. Experts including HMRC’s head of customs intermediary policy and strategy Mark McGuire and the Chartered Institute’s technical director Anna Doherty discussed what the standard will mean for traders in practice, while also highlighting the opportunity to contribute to the government’s call for evidence on customs modernisation.
The Chartered Institute announced the line-up for its first panel session at this year’s Empowering Global Trade Conference. Early-bird tickets are still available here.
With the government roles and responsibilities under Andy Burnham’s new administration now almost set out, Chartered Institute public affairs lead Grace Thompson, technical director Anna Doherty and corporate affairs director Chris Martin explained who’s who in key trade roles.
True facts: Following Nintendo’s tariff refund windfall, reported earlier this month, US retailer Target has become the recipient of one of the biggest single payouts, as it was reimbursed to the tune of US$994m.
