The Week in Trade: Trump tariff turmoil, UK growth expectations fall and customs updates

The US has been at the heart of this week’s trade news, as tariffs were threatened, delayed and imposed across the globe by the White House. Elsewhere, there is some worrying news from the Bank of England (BoE) on UK growth as it cut interest rates, a raft of customs news and member-exclusive?Daily Update features.

The big picture: US president Donald Trump’s return has upended the status quo on trade between the superpower and a host of nations this week, after Trump forged ahead with a 10% tariff on China and pulled back from the brink of implementing even higher levies on North American allies.

On Tuesday (4 February), Trump announced a delay in the implementation of 25% levies on goods entering the US from Canada and Mexico after winning concessions from the two countries on combatting the illegal drugs trade. It follows a similar reprieve for Colombia from a tariff threat after Bogota agreed to accept two military planes full of deported migrants.

While Mexican president Claudia Sheinbaum committed 10,000 National Guard troops to fighting the cartels that facilitate the trade in fentanyl, most of Canadian prime minister’s measures on the issue had been previously announced. It remains to be seen how Trump will approach the issue again after the one-month delay.

China has placed a new 10% tariff on US crude oil, agricultural machinery and some cars in response to the tariffs, as well as 15% tariffs on coal and liquefied natural gas imported from the US.

Good week/bad week: Britain enjoyed a boost in its electricity exports to France as a result of the recent Storm Eowyn, the FT reported this week. The high winds caused by the storm meant the UK produced more electricity than it could use, and is an inversion of the situation on nuclear energy, which Britain imports from France.

A less positive week for the UK economy, as the BoE revised down its growth forecast from 1.5% to 0.75% for 2025 as it also cut the interest rate from 4.75% to 4.5%. The BBC reports that Jonathan Haskel, a member of the bank’s Monetary Policy Committee until last year, said there is now a prospect of “stagflation” in the UK economy, adding: “I’m afraid it’s not very pretty.”

How’s stat? 59% – That’s the fall in sales of Tesla cars in Germany last month compared with January 2023. Tesla owner Elon Musk has played an increasingly vocal role in German politics as he has also taken a role at the head of the US’ new so-called Department of Government Efficiency.

The week in customs: More customs updates this week from the Department for Environment, Food & Rural Affairs (Defra), which has issued a series of updates on the import of beef and other meat products from Germany.

Since 10 January, imports of these goods from Germany have been suspended after a confirmed case of Foot and Mouth Disease (FMD). Defra has issued guidance on how to avoid border delays caused by additional checks.

Additionally, the Joint Customs Consultative Committee (JCCC) says it has released new handbooks on customs topics, while also issuing a workaround for a problem affecting goods containing mercury.?

Quote of the week: “This government’s position is simple: the UK and the EU are linked through trade and international organisations like NATO, and even though we voted to leave the EU, our role as key allies and trade partner remains.”

UK’s minister for EU relations, Nick Thomas-Symonds, as part of his speech to a joint forum where he shared the government’s plans for the ‘reset’ between Westminster and Brussels.

What else we covered this week: The EU-Mercosur trade agreement, unveiled in December last year, was a long time in coming. Despite the celebration from Brussels and Latin American nations, opposition still remains in many capitals and politically powerful farming groups have voice discontent with the potential impacts of the deal. We looked at the debate around the agreement as well as what’s next in the approval process.

The latest Member Spotlight featured Martin Morris, managing director of Consulting Nordics AB, who explains how he got to grips with Nordic markets and gives helpful tips to others looking to explore a new one.

Finally, the Daily Update rounded up the latest news from the world of energy. Northern Ireland looks to be stuck in the middle of a dispute between the EU and UK over which version of the Carbon Border Adjustment Mechanism (CBAM) should apply, while prime minister Sir Keir Starmer looks likely to link the UK and EU Emission Trading Schemes.

True facts: It’s 61 years since the ‘British Invasion’ of the US began with the arrival of the Beatles in the country, two days ahead of their famous appearance on the Ed Sullivan Show, which garnered 73m viewers. UK recorded music exports to the US were worth ￡320.9m in 2023.

Posted by: Phillip Adnett and Benjamin Roche