31 October 2025 Trade Talking Points | Latest insights from EY's Trade Strategy team (October 2025)
Introduction of Section 232 Trade Expansion Act 1962 tariffs on timber, lumber and derivative products On 29 September 2025, the Trump Administration announced tariffs to be applied to the import of softwood timber and lumber; upholstered wooden products; and kitchen cabinets and vanities. Tariffs on these products will become applicable for goods entered for consumption, or withdrawn from warehouse for consumption, on and after 12:01 eastern daylight time on 14 October 2025:
A product-by-product breakdown (unique to HTSUS code) is available in Annex I of the Proclamation. To align with the General Terms for the United States of America and the United Kingdom of Great Britain and Northern Ireland Economic Prosperity Deal (8 May 2025), the Trump Administration will work to adopt a structured, negotiated approach to addressing the national security threat in the wood-products industry. For wood products originating from the EU and Japan, tariffs will not exceed the negotiated 15% ceiling. Businesses with potential exposure to the new tariffs should assess their existing HTSUS codes against the Annex I list and confirm product origin prior to importation into the US. (For details, see EY Global Tax Alert, US President announces new Section 232 tariffs on imports of timber, lumber and their derivative products, dated 2025-1963.) During a meeting with the Deputy Prime Minister of Cambodia, Sun Chanthol on 10 October 2025, USTR Jamieson Greer announced advancements in the US-Cambodia Agreement on Reciprocal Trade. The meeting reflected ongoing efforts to reinforce bilateral trade relations between the two nations. Outcomes from the meeting emphasized the importance of ensuring a level playing field for American workers and businesses, while overcoming the US trade deficit. Ambassador Greer also noted that the initial discussions with Cambodia have led to commitments that should minimize longstanding trade barriers and tariffs. Ambassador Greer stated that the progress made will open new export and business opportunities for American farmers, ranchers and workers, while also safeguarding US producers who supply domestic US markets. A finalized deal remains outstanding, and there is no further information on whether Cambodia's current 19% Reciprocal tariff rate will be reduced. On 10 October 2025, the USTR announced modifications to the April 2025 Section 301 Trade Act 1974 investigation into alleged unfair trade practices affecting the American shipbuilding industry. The modifications provide next steps, and reflect input received during the initial public consultation periods in April and June 2025.
The USTR has proposed further modifications, which are open to public consultation until 12 November 2025.
On 30 October 2025, US President Trump and China's President Xi met in South Korea to discuss the existing trade and investment relationship between both countries. Details from the meeting remain vague, and no official joint statement or executive order has been released.
On 24 October 2025, USTR Jamieson Greer announced the initiation of a Section 301 investigation into China's implementation of the Economic and Trade Agreement, (Phase One Agreement). The Phase One Agreement, reached on 13 December 2019, aimed to address several trade issues, including correcting distortive practices and making substantial additional purchases of US goods and services. However, five years after its implementation, concerns have arisen regarding China's adherence to its commitments, particularly in relation to non-tariff barriers and market access. The USTR will examine whether China has fully implemented its commitments under the Phase One Agreement, which includes structural changes in areas such as intellectual property, technology transfer, agriculture and financial services. The investigation will also assess the burden or restrictions placed on US commerce due to any non-implementation by China. The USTR has invited public comments and will hold a hearing related to this investigation on 16 December 2025. On 17 October 2025, President Donald Trump issued a proclamation addressing the national security implications of imports of medium and heavy-duty vehicles (MHDVs), certain MHD vehicle parts (MHDVPs), and buses into the US. The proclamation follows an investigation conducted under Section 232 of the Trade Expansion Act 1962, which identified that MHDVs, MHDVPs and buses were being imported into the US in quantities and circumstances that threaten to impair national security. The investigation noted a significant increase in import penetration, with foreign assemblers representing 43% of Class 4 through 8 MHDVs sold in the US, and 50% for Class 8 MHDVs. Following the investigation, the Secretary of Commerce recommended, and the President has implemented, the following actions to adjust the imports of MHDVs, MHDVPs and buses:
In a social media post on 25 October 2025, the Ronald Reagan Foundation alleged that Ontario, Canada had misused material featuring former President Ronald Reagan in an advertisement. The foundation asserted that the Canadian advertisement took the late-president's words out of context. President Trump asserted that the advertisement was designed to interfere with ongoing decisions by the US Supreme Court and other judicial bodies concerning tariff regulations. Further, he announced on social media the immediate termination of all trade negotiations with Canada. There is currently no official guidance to support the announcement. Malaysia: On 26 October 2025, the US and Malaysia signed a trade agreement. The agreement sets the framework from which Malaysia will implement specified customs duties and treatment on US-originating goods. A 19% tariff will continue to be levied on Malaysian-originating goods that are not subject to exemptions. Malaysian-led concessions under the agreement include the prohibition of quantitative restrictions on US-originating goods, the implementation of nondiscriminatory import licensing practices and the removal of technical barriers to trade. The agreement states that Malaysia will implement processes to ensure fair market access for US agricultural products and uphold intellectual property protections. Cambodia: On 26 October 2025, the United States and the Kingdom of Cambodia signed a trade agreement. Similar in structure to the Malaysian agreement, this agreement addresses tariffs and non-tariff barriers, with Cambodia committing to apply specified customs duties on US-originating goods as outlined in Schedule 1 of the agreement, and the US revising its treatment of Cambodian-originating imports as detailed in Schedule 2. A 19% tariff will continue to be levied on Cambodia-originating goods that are not subject to existing product-by-product exemptions. Cambodia has committed to eliminate tariffs on 100% of US-originating goods exported to Cambodia. Cambodia will not impose quotas on US-originating goods unless otherwise agreed. Further concessions include the prohibition of import licensing that restricts US goods, nondiscriminatory treatment for US products and removal of technical barriers to trade. Cambodia will also provide nondiscriminatory market access for US agricultural goods and uphold intellectual property protections, including effective enforcement of copyright and trademark infringement laws. Thailand: On 26 October 2025, the US and the Kingdom of Thailand issued a Framework for a US-Thailand Agreement on Reciprocal Trade. Similar in structure to the Cambodian and Malaysian agreements, the agreement establishes a framework from which both counties will work to addresses tariffs and non-tariff barriers. A 19% tariff will continue to be levied on Thai-originating goods that are not subject to product-by-product exemptions. The agreement does not contain the same level of detail as the Cambodian agreement, nor does it specify timelines for implementation like the Malaysian agreement. As a baseline, Thailand has committed to eliminate tariffs on 99% of US-originating goods exported to Thailand, and both parties will work to address Thailand's non-tariff barriers that affect bilateral automotive, agricultural, medical device, pharmaceutical and fuel trade. Vietnam: On 26 October 2025, the US and the Socialist Republic of Vietnam announced a Framework for an Agreement on Reciprocal, Fair, and Balanced Trade. Terms of the Agreement include Vietnam's providing preferential market access for substantially all US industrial and agricultural exports. A 19% tariff will continue to be levied on Vietnam-originating goods that are not subject to exemptions. Vietnam agreed to accept vehicles built to US safety and emissions standards and fully implement obligations under international intellectual property treaties. A 23 September 2025 letter from the European Commission (EC) to the Chair of the European Parliament's committee on environment, public health and food safety (ENVI) proposed that application of the EU Deforestation Regulation (EUDR) be delayed for one year. EUDR application is scheduled for 30 December 2025. The proposed delay is due to concerns over the readiness of the information technology (IT) system that underpins the regulation. The system will be essential for managing due diligence statements and facilitating interactions between economic operators and EU authorities. Recent assessments revealed that the expected volume of operations and data exchanges is significantly higher than initially projected.
The letter acknowledges that without sufficient upgrades, the system risks severe slowdowns or disruptions, potentially preventing operators from complying with EUDR requirements and affecting trade flows. On 23 September 2025, the EU and Indonesia announced the conclusion of negotiations for a Comprehensive Economic Partnership Agreement (CEPA) and an Investment Protection Agreement (IPA). Once implemented, CEPA is expected to enhance market access capabilities for EU businesses by:
On 17 September 2025, the EU proposed a new strategic agenda to enhance bilateral relations with India, focusing on trade, investment and security cooperation. The initiative aims to finalize the Free Trade Agreement by the end of 2025, and increase collaboration on emerging technologies, climate change and defense. The strategy reflects the EU's commitment to reliable partnerships and addresses global challenges, illustrating the importance of EU-India relations in the current geopolitical landscape. On 7 October 2025, the EC released a proposed safeguard strategy to protect the EU steel sector from global overcapacity and ensure ongoing stability. The strategy aligns closely to the March 2030 EU Steel Action Plan that was introduced to strengthen the sector's competitiveness. The proposed strategy recognizes the need to maintain open steel trade while increasing cooperation with global partners to address overcapacity from key markets.
This proposal will replace the existing EU steel safeguard measure, which is set to expire in June 2026, and responds to requests from EU workers, industry stakeholders and Member States for increased protection of the steel sector. According to EU data, the EU steel industry is the world's third-largest producer — employing approximately 300,000 people directly and supporting approximately 2.5m jobs indirectly. The global overcapacity for steel currently exceeds the EU's annual steel consumption by more than five times. The EC claims that this overcapacity, combined with rising imports and trade-restrictive measures from third countries, has affected the EU's competitiveness investment in decarbonization. Next steps involve the ordinary legislative procedure, requiring agreement from the European Parliament and the Council. The EC aims to ensure uninterrupted protection for the EU steel sector, reinforcing its commitment to a sustainable and competitive steel industry in the EU. The European Parliament and the Council formally adopted the Carbon Border Adjustment Mechanism (CBAM) Omnibus Regulation on 8 October 2025; the new Regulation entered into force on 20 October 2025 and introduces targeted simplifications to the CBAM ahead of its definitive phase starting 1 January 2026. Key changes include a new mass-based exemption threshold of 50 tons per year for certain imports, the postponement of certificate-surrender obligations to 2027 and the removal of the €150 value threshold for exemptions, simplifying compliance for importers. Businesses must assess their exposure under the new rules, particularly regarding the requirement to register as authorized CBAM declarants if import volumes exceed the threshold and prepare for the financial implications of CBAM costs starting from 1 January 2026. Companies should collaborate with non-EU suppliers to ensure accurate documentation of embedded emissions and establish financial provisions for the costs associated with CBAM certificates, while aligning compliance processes with existing customs and VAT systems. (For more information, see EY Global Tax Alert, EU adopts CBAM Omnibus Regulation, dated 22 October 2025.) On 22 October 2025, the EU and Egypt convened an event on investments, competitiveness and innovation in Brussels. The event was organized under the leadership of EC President Ursula von der Leyen and Egyptian President Abdel Fattah El-Sisi. The points discussed included economic cooperation between Egypt and the EU, with an emphasis on Egypt's reform momentum and its role as a gateway to regional markets. The panels also addressed strengthening industrial competitiveness by promoting sustainable "value chains"; promoting public-private cooperation; and expanding the Terra-MED (T-MED) initiative to attract greater investment into renewable energy across the Mediterranean. Additionally, the discussions covered Egypt's association to Horizon Europe, a funding program for research and innovation. On 16 September 2025, Chancellor of the Exchequer Rachel Reeves met with US Treasury Secretary Scott Bessent to establish the Transatlantic Taskforce for Markets of the Future. The initiative aims to explore collaborative opportunities in digital assets and ensure appropriate legislation and partnership structures exist to support innovation across wholesale digital markets. The taskforce will also work to increase collaboration between UK and US capital markets, focusing on facilitating growth and competitiveness in both jurisdictions. A key objective will be alleviating the regulatory burden for firms operating in either market when raising capital. The Taskforce is expected to deliver its report within 180 days and will be chaired by officials from the UK Treasury and US Treasury, with participation from relevant representatives of UK and US regulators responsible for capital markets and digital assets regulation. On 9 October 2025, UK Prime Minister Keir Starmer concluded his official visit to India. The visit follows Indian Prime Minister Narendra Modi's trip to the UK in July, during which both nations signed the India-UK Comprehensive Economic and Trade Agreement (CETA) and established the India-UK Vision 2035. During the visit, both Prime Ministers addressed the Global Fintech Fest in Mumbai and discussed the progress of the India-UK partnership, including mutual interests in various global and regional issues.
On 18 September 2025, Canadian Prime Minister Mark Carney and President of Mexico Claudia Sheinbaum initiated a new Comprehensive Strategic Partnership to enhance trade ties between the two countries. A key area of cooperation includes enhancing trade and investment opportunities across energy, infrastructure, critical minerals and agriculture. The mission will be led by Dominic LeBlanc, who is responsible for overseeing Canada-US trade. On 9 October 2025, the Chinese Ministry of Commerce (MOFCOM) announced the expansion of its export controls on rare-earth elements and inputs linked to advanced computing, semiconductors and AI through two separate public notices (Notices 61 and 62). Notice 61 states that defined Chinese-originating rare-earth items and associated mining and processing technologies are to be subject to Chinese export controls. The notice states that exports, re-exports and transfers of the following foreign-made products (products produced outside China and containing 0.1% or more by value) now require a license from MOFCOM:
Notice 61 also declares a case-by-case license review process for items with end-uses linked to advanced computing, semiconductors and artificial intelligence that may have military application. Notice 62 establishes additional controls on exports of defined technologies related to rare earths. MOFCOM defines technologies broadly, with a split made between physical technology (completed machinery) used to mine, smelt and manufacture rare-earth minerals, and technology used to assemble, maintain, repair and upgrade existing physical technologies. On 22 September 2025, the Trade Remedies Authority (TRA) proposed an anti-dumping duty on imports of engine oils and hydraulic fluids from Lithuania and the United Arab Emirates (UAE). The proposed duties include rates of up to 84.72% for individual participating businesses, with countrywide rates set at 95.36% for Lithuania and 34.55% for the UAE. The duties will be applicable for up to five years. The investigation as initiated following an application from a UK manufacturer. It covers various products, including passenger car motor oils, heavy-duty commercial vehicle oils and hydraulic oils. The TRA asserts that despite UK sales of engine oils and hydraulic fluids exceeding £285m between April 2023 and March 2024, the UK engine oil industry has experienced material injury due to increased dumping activities from Lithuania and the UAE. The TRA warns that without the implementation of these measures, the industry will continue to face significant challenges. On 23 September 2025, the EC imposed anti-dumping duties on imports of glyoxylic acid from China, ranging from 29.2% to 124.9%. Glyoxylic acid is a crucial chemical used in various sectors, including pharmaceuticals and cosmetics, and the measures aim to protect EU producers from unfair competition. On 23 October 2025, the EC imposed anti-dumping measures on imports of screws without heads originating from China. The anti-dumping duties imposed range from 54.7% to 72.3% and are aimed at re-establishing fair competitive conditions between headless screws imported from China and those produced within the EU. According to the EC, the market for screws without heads is valued at approximately €500m. The anti-dumping duties specifically target screws without heads, which include threaded rods, anchor bolts and U-bolts. Headless screws are critical in numerous final applications, including automotive, renewable energy, electrical appliances, agriculture and the construction sector. Production of screws without heads in the EU is concentrated in several member states, including Belgium, Croatia, the Czech Republic, France, Germany, Hungary, Italy, the Netherlands, Spain and Poland. On 20 October 2025, the EC announced the introduction of anti-dumping measures on imports of steel track shoes originating from China. The anti-dumping duty imposed on these imports is set at 62.5%. Provisional duties have been in effect since 22 April 2025. Steel track shoes are components used in tracked equipment, particularly in the construction and mining sectors. According to the EC, the EU industry producing steel track shoes is primarily located in Italy and is valued at approximately €30m.
Document ID: 2025-2199 | ||||
