It’s been another significant week for US trade, as it agreed to slash tariffs on Indian goods in return for a promise on Russian oil purchases. It has also struck a new ‘partnership’ agreement with the UK following talks in Washington DC on critical minerals.
Elsewhere, the UK’s services sector had a strong January, and the contribution of the country’s export finance agency was highlighted in a new report.
The big picture: The US and India struck a tariff deal to bring US duties on Indian goods down to 18%, following an agreement by India to halt purchases of Russian oil.
Indian prime minister Narendra Modi said he was “delighted” by the decision from US President Donald Trump, stating:
“When two large economies and the world's largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation.”
The news follows the announcement of a free trade agreement (FTA) between India and the EU last week, with the latter also poised to strike a new agreement with Australia, according to reports this week.
Good week/bad week: A good week for those looking for support to manage this period of geopolitical uncertainty for trade, as the Chartered Institute of Export & International Trade launched a suite of nine new Advisory Services. To learn more about how the services can help you, read this explainer for Global Trade Today written by our Export Controls Practice lead Daniela Turiccki.
It's been a less positive week for the Russian economy though. We covered how it continues to grapple with rising inflation and import-export challenges in our Russia and Central Asia Trade Digest, which featured more promising developments for Kazakhstan and Georgia.
There was also an interesting insight in yesterday’s (5 February) Guardian on the Russian situation from EU sanctions envoy David O’Sullivan, who argued that while sanctions were not a “silver bullet”, they are putting significant pressure on Vladimir Putin’s nation.
How’s stat: US$660bn – the volume of spending planned by Big Tech firms this year, sparking investor anxiety that has wiped $900bn off the stock market value of Google, Microsoft and Amazon.
Quote of the week: “This is an important step in safeguarding long‑term economic growth at home and protecting the UK’s interests around the world.”
Foreign Office minister Seema Malhotra on a new critical minerals partnership between the UK and US, after talks in Washington DC between the two, alongside the EU, Japan and others. Trump also announced plans for ‘Project Vault’, a $12bn critical minerals reserve, this week, as his administration seeks to diversify supplies away from China.
The week in customs: The UK government is seeking industry views on the Border Target Operating Model (BTOM), with stakeholders from across the supply chain invited to email BTOMresearch@ecorys.com by 20 February to take part.
Number 10 also rebuffed overtures from the EU on a new customs union between the UK and the bloc, according to Telegraph reporting. The EU’s economy minister, Valdis Dombrovskis, said the bloc was “open-minded” about the idea in a recent interview.
Other headlines this week: Our latest Trade Insights deep-dive feature explored what looming midterm elections in the US could mean for Trump’s tariff programme, with hints that he could dial back the programme in response to cost of living concerns.
Our public affairs lead, Grace Thompson, was also in attendance at this week’s UK Trade and Export Finance Forum, where she noted remarks from business and trade secretary Peter Kyle promising “support [for] businesses on a constant basis”. The event coincided with the launch of a new report from Oxford Economics which found that UK Export Finance (UKEF) has supported exporters that have contributed £23bn to the economy over the last five years.
Also yesterday was the news that, in January, UK services achieved their highest S&P PMI figure since August, posting a rate of 54 in part due to increased export orders – though employment numbers were less promising.
True facts: Today is Ronald Reagan’s birthday. In an address in 1987, Reagan made one of the most direct defences of free trade by a US president, stating that “the way to prosperity for all nations is rejecting protectionist legislation”.
