ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø

Further to the “pause� triggered by the USA a couple of weeks ago after weeks of imposing tariffs against either all products from all countries (“reciprocal tariffs�) or against certain products or sectors (automotives, aluminium and steel), the first results of the negotiations between the USA and most of the countries in the world are starting to be announced.

Two main conclusions can be taken so far: the 10% of baseline reciprocal tariffs seems to remain even for countries without a commercial deficit with the US and having negotiated a deal. The compatibility of the announced “trade deals� with WTO law remains uncertain based on the information disclosed so far.

The EU and the USA have started negotiating with regards to the reciprocal tariffs initiated by the Trump administration and publicly insist on their will to find a "mutually beneficial and balanced solution with the USA" by mid-July (end of the pause of reciprocal tariffs against EU products the US side and end of the pause regarding additional tariffs on certain US products in response to the US tariffs on EU aluminium and steel).

In the meantime,  on Thursday 8^th May, the EU have indeed triggered an investigation for imposing additional duties on certain US products imported into the EU as well as imposing commercial policy measures to certain EU products exported to the USA through two lists:.

• A first list relating to products originating in or from the USA which could be subject to possible commercial policy measures; and
• A second list relating to some EU products exported to the USA which could be subject to possible commercial policy measures.

The first list is quite long (218 pages of customs classification codes) and covers a broad range of industrial (whisky, aircraft, automotive, steel and aluminium products etc) and agricultural products. The importation of such products from the US to the EU is estimated to �95 billion per year.

At this stage, the EU Commission is not disclosing the potential rate(s) of additional duties to be potentially imposed on those products nor a date of implementation (although this could be as early as mid-July).

The second list is much shorter and covers:

• Ferrous wasten and scraper; remelting scrap ingots of iron or steel (7204);
• Aluminium wasten and scrap (7602);
• Toluidines and their derivatives; salts thereof (292143);
• Mixtures of odoriferous substances and mixtures (330210); and
• Enzymes (350790).

This announcement is "only" the launch of a consultation. Operators are asked to send their comments relating to these two lists by the 10th of June.

In addition, the EU have announced their intention to launch a dispute at the World Trade Organisation (WTO) level against both the reciprocal tariffs and the tariffs on automotive.

The same afternoon, the USA and the UK announced having reached a “trade deal�. Although President Trump is describing it as a “major trade deal�, but it is fair to say that it is not and also it is not a Free Trade Agreement.

As of today, only the general terms for the agreement have been published. Those non-binding general terms need to be followed by additional negotiations and publication of a text.

According to both parties, this agreement should reverse or customs of the tariffs the Trump administration has implemented since February.

It should have no impact on reciprocal tariffs imposed against UK products, which will remain 10%.

However, it should reduce the tariff imposed on UK cars. No mention of auto parts but it can be on the deal Today the overall tariffs on UK cars is 25% (plus the historical customs duty rate). Within this agreement, this 25% will be reduced to 10% but only to a maximum of 100,000 UK cars.

It should also eliminate the 25% tariff on aluminium and steel products but it looks like it will be via a system of tariff quota (which was taking place under the Biden administration).

In exchange to those “concessions�, the UK should accept to increase their quota to certain US agricultural products (e.g. beef) and eliminate customs duties on certain US products (e.g. ethanol). However, it seems that the UK have not agreed to change their 2% digital services tax imposed on search engines or marketplaces such as tech giants (Meta, Google, Apple). Instead, the UK government announced that they agreed “to work on a digital trade deal�.

As a summary and based on the few information disclaimed so far, this “deal� seems to be pretty limited and mitigating some of the recent tariffs imposed to the UK by the Trump administration.

US and Chinese top officials have been meeting in Switzerland since Friday last week. On Monday morning, they announced having reached an agreement to de-escalate the current situation on tariffs.

As a reminder, the USA has imposed several types of tariffs against Chinese products for the last few years but there has been an escalation since President Trump came back to power. More specifically, the Trump administration, after imposing tariffs on certain types of products, decided to impose a 34% reciprocal tariff on all Chinese goods on 2^nd April. China decided to respond to the USA and on the 8^th and 9^th April, the USA imposed a 125% tariff (cumulative with some other tariffs already imposed) and China imposed the same duty rate on US products.

Both countries have agreed a “pause� to continue negotiating an agreement for 90 days, starting on Thursday 14^th May.

During this period, the US will impose a 10% reciprocal tariff instead of the current 125%. More specifically, the US will suspend 24% of the original 34% reciprocal tariff and eliminate the 91% imposing on the 8^th and 9^th April. China has agreed to do the same and will therefore also impose 10% on all US products.

China also agreed to “adopt all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the USA since 2^nd April (interdiction of exporting certain Chinese products to the USA).

No communication was originally made on the suppression of “de minimis� for low value shipments (under 800 USD) of products either originating or coming from China.

Since the 2^nd of May, a tariff of 120% has been imposed against postal items of a value lower than USD 800 or a USD 100 per item. However, and further to the joint announcement, the Trump administration has officially reduced this 120% tariff to 54%. The USD 100 remains and will not be increased to USD 200 on 1^st June as originally scheduled. Non postal low value items attract the new 10% tariff (and other imposed tariffs if appropriate) until further notice.

Similarly to the USA-UK announcement, this announcement is far from being a trade deal. Foreign products are still surtaxed in the USA, the rate of reciprocal tariffs is lower than originally announced until mid-July for some and September for China but make no mistake, it is nothing to compare to what it was back to December last year.

In these uncertain and quickly evolving times, it is key for companies to review their current supply chain, identify how they will be impacted and prepare accordingly.