01 May 2025 Trade Talking Points | Latest insights from EY's Trade Strategy team (April 2025)
During April 2025, President Trump announced a series of amendments to the US tariff schedule impacting global supply chains and markets. These include:
In response to these developments, trade partners have adjusted their approaches to countermeasures:
As new tariffs and exemptions continue to be announced at pace, businesses must monitor the landscape and understand their trade flows to consider any direct or indirect exposure to the tariffs in their short-term and long-term strategic decision making. Businesses trading to and from the US should ensure their product classification and origin determinations are accurate, before identifying suitable mitigation measures. On 24 March 2025, Canada initiated a WTO dispute against China's additional duties on agricultural and food products, including rapeseed oil and pork, claiming that these measures violate China's obligations under various provisions of the General Agreement on Tariffs and Trade (GATT) and the Dispute Settlement Understanding. China had introduced retaliatory duties on agricultural food products on 8 March 2025 in response to Canada's levies on Chinese-made electric vehicles, steel and aluminum in October 2024. Additionally, over the last months, Canada and China participated in WTO disputes with the US, responding to US President Trump's recent tariff actions. In early March 2025, Canada initiated a WTO dispute against the US steel and aluminum duties, and China requested additional WTO dispute consultations with the US that support its earlier request on 4 February 2025 regarding the extra 10% ad valorem duties imposed on all imports from China. On 25 March 2025, the European Commission reinforced its safeguard measure for steel, which has been in force since 2019, to protect the industry from rising imports. By dropping the liberation rate of tariff rate quotas from 1% to 0.1%, the European Commission has limited the amount of steel that can be imported into the EU tariff free. Additionally, countries will no longer be able to carry over the entire volumes of unused quotas from other countries, including those of Russia and Belarus. The carryover mechanism, which enabled countries to transfer any unused quotas to the next quarter, has also been removed for categories with high import pressure and low consumption. The decision was made following 13 EU Member States' request to review existing measures, as industry expressed concerns about increasing pressure arising from growing global capacity, exports from China and trade barriers in markets such as the US, alongside decreased demand. Additionally, on 26 March 2025, the UK Trade Remedies Authority (TRA) announced the expansion of the scope of its steel safeguard review following additional evidence provided by the domestic industry. The industry submission flagged changes in circumstances affecting the UK steel market, including a decline in global demand. The UK Government announced that the sixth round of negotiations with Switzerland to modernize the existing goods-focused FTA took place from 3 to 10 March 2025. During this negotiation round, progress was reportedly made in areas such as financial services and digital trade, including data sharing, source code and cryptography. The negotiations for the modernized agreement are focusing on enhancing the trade relationship in services, investment and digital trade, aiming to establish facilitated market access between the countries, enabling the sharing of data and ideas between the two countries, and provide long-term security for UK business travel to Switzerland. On 27-28 March 2025, European Commissioner Maros Sefcovic met with Chinese officials in Beijing to discuss improving EU-China trade relations, addressing systemic issues, and focusing on market access and electric vehicle supply chain investments. They agreed to maintain regular contact and established a working group on agri-food market access. This visit marked the first by a European Commission member under the new administration, coinciding with the 50th anniversary of EU-China diplomatic relations. Additionally, European Commission President Ursula von der Leyen was scheduled to attend the EU-Central Asia Summit in Samarkand, Uzbekistan, on 4 April 2025. The goal of the visit was to deepen trade ties and cooperation in transport, critical raw materials, digital connectivity, water and energy supported by a new Global Gateway investment package. The Summit also aimed to enhance connectivity, particularly through the Trans-Caspian Transport Corridor, and explore security cooperation. On 1 April 2025, the European Parliament approved the "Stop-the-clock" Directive1 to delay the timeline of sustainability reporting and due diligence requirements under the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). The "Stop-the-clock" Directive delays by two years, to 2027, the application of CSRD for large companies that have not yet started reporting, as well as listed for small and medium enterprises. It further delays by one year, to 2028, the transposition deadline and the first phase of the application of the CSDDD. The Directive is part of the European Commission's Omnibus I package, aimed at easing the sustainability and reporting burden on companies. On 13 April 2025, the UK announced a temporary two-year suspension, until July 2027, of import tariffs on 89 products, including pasta, fruit juices, spices, plastics and gardening supplies. The full list of products that will have tariffs temporarily removed can be found here. There will be further opportunities to apply for tariff suspensions in due course. Further information, including dates of the application window, details of previous windows, guidance, and methods to apply, can be found here. In light of increasing barriers to trade with the US, the UK and EU have progressed bilateral talks with other trade partners: The UK held a fourth round of trade deal negotiations with South Korea in late March, focusing on three main topics: (1) rules of origin and product-specific rules, (2) digital trade and (3) new cooperation commitments on environment, gender and supply chains. The fifth round of negotiations is expected to occur in summer 2025. The UK signed a memorandum of understanding with the US state of Illinois on 8 April, prioritizing cooperation across a range of industries, including renewable energy, digital, life sciences and fintech. The EU has agreed to launch negotiations on an FTA with the United Arab Emirates (UAE), which is expected to support ties between the EU and the Gulf Cooperation Council, of which the UAE is a member. The fifth round of trade deal negotiations with Thailand took place on 4 April. Progress was made across policy areas, with the next round expected in June 2025. Additionally, several bilateral discussions were held between European Commission President Ursula von der Leyen and country leaders from Canada, New Zealand, China, Norway, UK and Singapore. The UK and the EU have taken steps to support their domestic industries as tariff hikes and increasing uncertainty impact businesses across sectors and markets. The UK announced a £20b increase in government-backed financing, enabling UK Export Finance (UKEF) to expand its financing support for British businesses. Additionally, small businesses will be able to access loans of up to £2m through the British Business Bank's Growth Guarantee Scheme. UKEF will also provide partial loan guarantees to mitigate the impact of tariffs, with £10b allocated for businesses facing immediate challenges. The UK government has enacted emergency legislation to take over a steel plant, securing raw materials and direct operations. The EU held a range of dialogues with industry, including pharmaceuticals, automotive and steel and metals, to address the implications of US tariffs. Across all sectors, there was a consensus on the need for a coordinated EU response to the tariffs, with strong concerns about trade diversion and the impact on integrated supply chains. Participants advocated for lowering tariffs and reducing non-tariff barriers to enhance competitiveness. The US announced its intent to withdraw from the 2019 anti-dumping suspension agreement on Mexican tomatoes. From 14 July 2025 onward, most imports of Mexican tomatoes will be subject to an anti-dumping duty of 20.91%. The US initiated an antidumping and countervailing investigation into Chinese fiberglass door panels and polypropylene corrugated boxes from China and Vietnam on 10 and 8 April, respectively. Additionally, preliminary affirmative determinations were published on the import of corrosion-resistant steel products from Australia, Brazil, Canada, Mexico, the Netherlands, South Africa, Taiwan, Turkiye, the UAE and Vietnam. The duties reach between 2.31% for certain Canadian exporters to 88.12% for most Vietnamese exporters. The EU extended its 39.7% anti-dumping tariff on imports of monosodium glutamate (MSG) from China to imports from Malaysia following an anti-circumvention investigation. The investigation found that exports of Malaysian MSG to the EU had increased significantly since the imposition of anti-dumping measures on Chinese imports. Additionally, the EU has reopened an investigation into countervailing duties imposed on Turkish rainbow trout on 14 April 2025, following a General Court ruling that the EU had made an error in how the duty was calculated. Affected businesses are invited to register and submit evidence. The UK Trade Remedies Authority published provisional anti-dumping duties on certain engine oils and hydraulic fluids originating from Lithuania and the United Arab Emirates. The duties range from 11.6% to 59.4%. Businesses are invited to comment and provide further evidence via the Trade Remedies Service.
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