News Summary 16 January 17

The Channel Group News Summary

A summary of the most important trade news stories from the past week. This summary is emailed to our subscribers every Monday morning, along with the latest comment and analysis from The Channel Group. If you would like to receive this direct to your inbox, you can sign up at the bottom of this article or click here.

UK heading for ‘swift and clean’ Brexit

After last week’s to-ing and fro-ing over the UK’s membership of the single market, Theresa May will set out her Brexit stance more clearly (we hope) on Tuesday. In the meantime, an indication of her stance has emerged. Senior sources have said that Mrs May will announce plans for a ‘swift and clean’ Brexit deal that will see the UK leave the single market and the customs union. Lord Lawson has called for such a move this week.

However, Chancellor Philip Hammond has suggested that the UK could cut taxes to compete more aggressively with the EU, if it was not to be granted access to the customs union. Speaking to Die Welt, he said; “The British people are not going to lie down and say, ‘too bad, we’ve been wounded’”.

New Zealand trade deal

Theresa May met the New Zealand Prime Minister, Bill English. At a press conference both PM’s reiterated their joint commitment to free trade.

English said that New Zealand was the “ideal partner for UK to demonstate it can negotiate high-quality trade deals”. Both English and May said that they hoped a deal could be negotiated “as soon as possible”.

Re-connect with the Commonwealth

The Free Enterprise Group of MPs has called for a reconnection with the Commonwealth following Brexit. Co-author of the report James Cleverly MP said, “A market of 2.3 billion people and some of the fastest growing economies in the world is too big an opportunity to ignore”. You can read the full report here.

🇺🇸 Trump Trade Policy


by Toby Illingworth

In the week where we will see the inauguration of the 45th President of the United States of America, The Channel Group has been investigating what sort of trade policy will emanate from the new administration.

It is becoming clearer that Donald Trump is keen to purvey the image of an administration with its foreign policy firmly rooted in Reaganism. To this end, the President-Elect has indicated his desire to replicate the negotiations between Ronald Reagan and Mikhail Gorbachev when meeting with Vladimir Putin for the first time. Trump is keen that the first meeting of the two Presidents takes place on ‘neutral territory’ such as Reykjavik, where the two titans of the Cold War met in 1986.

In addition to this, Trump has also nominated Robert Lighthizer to the position of US Trade Representative. Lighthizer served as deputy trade representative to President Reagan. His nominee for Secretary of State, the former Chairman and CEO of ExxonMobil, Rex Tillerson, has often been seen as an advocate of restoring relations with Russia. He has been awarded the Russian Order of Friendship and strongly opposed sanctions against Russia in 2014. This indicates that there will be a thawing of relations between the US and Russia, potentially leading to the opening up of new trading links between the two countries.

Friday’s inauguration will begin the premiership of the 45th President, but we are still unsure what this means for US relations with Mexico, China and Europe. NATO members have at least been partially reassured that they can count on US assistance, but if America really embarks on a protectionist revolution, we could see the world becoming more insular and therefore less stable.

Trump’s planned trade policies:

  • Withdraw from TPP
  • Renegotiate or withdraw from NAFTA
  • Label China a currency-manipulator
  • Direct ‘all appropriate agencies to use every tool under American and international law’ to stop violations of trade agreements that harm US workers

Trump strategy threatens US competitiveness

The outgoing US trade tsar, Mike Froman, has warned that President-elect Trump’s promise force impose tariffs on goods manufactures overseas and imported into the US. He also warned that the move could drive US allies into China’s embrace.

“When 95 per cent of consumers, 80 per cent of purchasing power and the fastest-growing markets for our products are outside the United States there is a risk that if other countries followed suit we’d actually see an outflow of manufacturing from the US”, Mr Froman said.

Davos

Global leaders from more than 70 countries will meet in Davos for the World Economic Forum, which runs from 17-20 January. This year’s meeting will focus on “strengthening global collaboration, revitalizing economic growth, reforming capitalism and preparing for the Fourth Industrial Revolution”.

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Thomas Dempster

Thomas has a background in politics, having worked in Parliament for a number of years. He worked alongside a wide range of stakeholders from business, local and supra-national government, and charities on various projects.

Before this, he worked for GlaxoSmithKline and as a theatre producer. Thomas enjoys playing cricket, cycling, and reading.

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