Both India and Bangladesh face exceedingly high tariffs from the US – 27% and 37%, respectively – which led some to hope the South Asian giants would band together and strengthen their trade ties. Instead, the relationship is souring, potentially disrupting trade and shipping routes in the entire region.

On 13 April, Bangladesh stopped all land imports of yarn from India, ostensibly to protect domestic producers from foreign competition. The restriction effectively acts as an expensive tariff for Indian imports, as all yarn must now travel via sea or air routes, which is far more costly and may lead to delays as sea routes become backed up due to the excess traffic. 

After the restriction was announced, India withdrew transshipment facilities for Bangladesh on 8 April, citing “congestion”. Since 2020, Bangladesh had been transporting goods, especially clothing, to India by road and using Indian ports, stations, and airports to get them to their final destination in Europe or the US. 

This made exporting much faster for Bangladeshi producers, cutting down transit times from eight weeks to one. Bangladeshi shipment hubs are not equipped to handle the massive volumes of exports that local producers send abroad; shipping routes are made more dangerous by piracy incidents, which have been on the rise since last year. 

At the moment, the effects of the reciprocal restrictions seem to be limited: trade relations between the two countries “are still underway and form a significant part of our bilateral commerce,” said Sudhanshu Das, a regional minister in Tripura, an Indian region on the border with Bangladesh. 

The relationship between India and Bangladesh, marred by a turbulent partition in 1947, has improved significantly over the past decade, with the resolution of long-standing border disputes and the establishment of treaties and credit lines. When Bangladeshi Prime Minister Sheikh Hasina was forced to resign after months of unrest, she took refuge in India; the new Bangladeshi government demanded her extradition, which the Indian government is refusing while accusing Bangladesh of “systematically persecuting” Hindu minorities.

India and Bangladesh are important trade partners. India is Bangladesh’s second-largest source of imports, responsible for 17% of all imports; most of Bangladesh’s exports go to the US and Europe, in large part because of the country’s second-largest clothing export industry. Bangladesh is India’s biggest trading partner in the subcontinent, but the trade balance is heavily in India’s favour, with a £6.93 billion trade surplus for the Asian giant. 

The restrictions and likely disruption they will cause serve as a powerful example of the way internal politics and even relatively minor diplomatic spats can have a broad-ranging effect on global trade. This is also a sign that the weaponisation of trade is becoming normalised across the world, and that its tools have expanded beyond tariffs to affect trade routes, deep-tier supply chains, and long-standing trade agreements. 

The post India and Bangladesh impose trade restrictions as global trade war escalates appeared first on Trade Finance Global.

On Wednesday night, the US Treasury announced the US and Ukraine had reached an agreement on US preferential access to Ukraine’s mineral, oil, and gas resources. 

The agreement, signed by US Treasury Secretary Scott Bessent and Ukraine’s Minister of Economy Yulia Svyrydenko, provides for a “reconstruction investment fund” that will invest in the extraction of Ukraine’s natural resources and its related infrastructure, with profits shared between the two countries after the first 10 years. The document still needs to be approved by the Ukrainian parliament before going into effect.

The deal had been long in the making and has been repeatedly brought up by Trump as a way for Ukraine to “pay back” the US for its extensive military aid. The finalized agreement does not include any requirements for Ukraine to directly reimburse the US for past or future defense aid. 

Instead, the two countries will invest in resource mining; the profits will go into post-war reconstruction for the first 10 years, after which they will be shared between the US and Ukraine. Although the two countries will “jointly manage” the investment fund, Ukraine will retain “full control” over its natural resources, and determine “where and what to extract,” said Svyrydenko. 

Ukraine has extensive deposits of natural resources: it ranks 51st in terms of the world’s largest oil reserves and holds much of the world’s uranium, iron, and natural gas resources. The country is also a crucial source of rare earth metals, a group of elements used in everything from microprocessors for cellphones, to medical technology, cancer drugs, and military guidance systems. 

Right now, the biggest exporters of rare earth minerals are China, Russia, and Malaysia, with most Western countries lacking their own extraction and refinery facilities and thus relying on imports. The EU imports around 40% of its rare earth metals from China, while the US is reliant on China for 70% of its imports, which form the vast majority of its total resources: the US only has one functioning mine and no refineries. 

As the US and China remain locked in a trade war, tariffs and Chinese export restrictions imposed last month will make it harder for the US to source the critical metals. This deal could secure long-term access to natural resources for the US and strengthen US-Ukraine trade despite the past months’ diplomatic difficulties. 

The post Ukraine and US sign minerals deal, establish reconstruction investment fund appeared first on Trade Finance Global.

• Climate-related risks are growing more severe as disasters grow more frequent.
• The Allianz Trade Sustainability Handbook outlines the company’s reasons for and strategies towards the goal of net zero by 2050.
• The problem is worst in emerging markets, meaning investors and underwriters have more trouble funding sustainable projects there.

Allianz Trade, the global trade credit insurance provider, released its first trade sustainability handbook yesterday, detailing its progress in reaching its environmental, social, and governance (ESG) objectives and the company’s approach to sustainability going forward. 

Trade is responsible for 23% of emissions globally, a number that grows every year. However, research by the World Bank suggests that the solution to climate change also lies in trade – while reducing imports would raise emissions globally, trade efficiently redistributes production to the least emissions-intensive country. 

As a result, global trade enablers like Allianz Trade are in a unique position to drive the transition to net zero. As risks related to climate change grow each year – from extreme weather events disrupting trade to global warming-related electricity outages – companies must be aware of the impact of climate change and become adaptable and resilient to it. 

An all-around ESG strategy

Companies which are wide awake to the impact of climate change have been making sustainability a top priority. “Climate change and new societal expectations are reshaping our role as insurer, employer, and corporate citizen,” said Florence Lecoutre, Board Member in charge of Sustainability at Allianz Trade. 

Allianz Trade’s Sustainability Handbook outlines the firms’ sustainability vision, its impact so far, and the road ahead. As part of Allianz Group’s goal of reaching net zero by 2050, Allianz Trade has committed to massively lowering its carbon footprint in the next few years – and has already come a long way, reaching 100% renewable electricity usage in 2023 and reducing greenhouse gas emissions per employee by 60%. 

Allianz Trade is also on the way to achieving a fully ESG-aligned portfolio, by supporting low-carbon and net zero projects and refusing new contracts with high-emission clients like oil and gas companies. This diverts funding from emission-intensive firms and towards projects which align with ESG criteria, accelerating the transition away from fossil fuels. “At Allianz Trade, sustainability is not just an ambition – It is a responsibility embedded in the way we operate,” said Aylin Somersan Coqui, CEO of Allianz Trade.

Transitions through partnerships

As part of its mission to support the green transition, Allianz Trade launched two new products – Specialty Credit and Surety Green2Green – aimed at supporting companies undertaking low-carbon or green energy tech projects. A prospective client’s project is assessed to see if it aligns with Allianz Trade’s sustainability goals; then, “If it meets our criteria, the premiums we earn from this transaction are […] held as investments in certified green bonds,” said Soenke Schottmayer, Head of Commercial – Global Surety. 

Allianz Trade is also collaborating with multilateral organisations to provide insurance to sustainable development programmes. A recent project to provide electric buses to the Baltic region, underwritten by the firm, reduced greenhouse gas emissions by 15% and cut carbon dioxide (CO2) emissions by over two tonnes. 

Meanwhile, a recent partnership between Allianz Trade and the International Finance Corporation (IFC) – the major global development institution providing finance to firms in developing countries – is enabling sustainable growth in emerging markets. 

A £150 million contribution to the IFC’s managed co-lending portfolio programme is helping the IFC expand access to financing for SMEs, women-led businesses, and climate-focused projects.

Emerging economies, and especially their SMEs, are often the hardest hit by the trade finance gap as a lack of collateral and low levels of capital make it difficult to get insurance or access financing. This makes it even harder to find investors and underwriters for green energy projects, which are often vulnerable to political risk and fast-shifting regulations. 

Insuring net zero

While much is said about the global trade finance gap, estimated at £1.87 trillion, the massive underinsurance of trade and assets is just as urgent an issue. An estimated £122 billion globally is underinsured, with the vast majority of it in developing countries, especially in the areas that are most vulnerable to climate-related risks.

Extreme weather events, global warming, and rising sea levels expose global trade to a range of risks, which are only set to rise in the next few years. Allianz Trade is incorporating climate and sustainability factors into its risk-assessment processes, for example, by introducing ESG criteria in country risk analyses. This will both provide a clearer, more accurate picture of the risks associated with projects and investments and encourage prospective clients to work on improving their ESG commitments. 

Starting this year, Allianz Trade will refuse new contracts and stop renewing existing policies with large oil and gas companies without a net zero commitment by 2050, as well as firms involved in the coal, oil sands, and methane exploration industries. 

—

Trade credit insurance, which protects exporters and importers from the risks inherent to trade like delays and non-payment, is a crucial facilitator of the global economy. By decarbonising their portfolio, insurers can force markets to keep up with the transition to net zero and incorporate sustainability into their practices. 

Pushed by regulations and stakeholders who are becoming more and more aware of the opportunities of sustainability and the dangers of climate change, insurers and finance providers worldwide will follow Allianz Trade’s lead and incorporate ESG into their investment decisions. Net zero is for the benefit of profit incentives, the environment, and the future.

The post How trade credit insurance can drive net zero: The Allianz Sustainability Handbook appeared first on Trade Finance Global.

A massive electrical outage swept through Spain and regions of Portugal and France yesterday, leaving millions without access to electricity, mobile, and internet services. 

While most areas regained power late on Monday night, the blackout laid bare the vulnerability of payments systems.

Many banks in Spain halted access to point-of-sale terminals, leaving shops and restaurants without ways to accept card or online payments from customers. The European Central Bank (ECB) extended its delivery versus payments deadline by an hour in a rare move, almost certainly prompted by the outage, as banks’ central securities depositories struggled to reconcile payments made during the day. 

The blackout, which affected Spain as well as the Basque regions of France and much of Portugal, including Lisbon and Porto, was due to an electrical failure in Spain’s power grid, which in turn affected the connections with its neighbors; overall, an estimated 50 million people were affected. 

The cause of the blackout is believed to be a “rare atmospheric event” that caused extreme temperature variations in Spain, leading to an imbalance in the frequency of the national power grid that had knock-on effects on all surrounding regions. Extreme temperature variations, an effect of climate change and global warming, are expected to sweep through most of Europe this week, with the UK experiencing temperatures as high as 27°C in some areas. 

The outage has had little if any economic impact, as critical infrastructure like hospitals stayed mostly unaffected and many businesses stayed open. The Spanish stock exchange remained functioning throughout the outage, opening this morning with a slight gain. However, the widespread, immediate halt in online payments highlighted the fragility of the international payments system and its reliance on underlying infrastructure. 

Spain’s central bank said that by 15:30 local time – four hours after the beginning of the blackout – its national and cross-border payments system was back to normal. However, bank branches, merchants, and individual businesses experienced problems throughout the day as card readers ran out of batteries and ATMs remained inactive. The ECB postponed the start of the delivery versus payment cut-off by an hour.

Spain is one of the most cash-dependent countries in Europe, despite efforts by the governments to encourage more uptake of online and card payments to decrease corruption. If the blackout had occurred elsewhere, the effect may have been even more pronounced, grinding national economies to a halt: the UK, for example, only has 6% of payments made in cash, compared to Spain’s 57%.

The post Spain blackout highlights fragility of payments systems appeared first on Trade Finance Global.

Aterian, a London-listed metals-focused exploration and development firm, said on Wednesday, 23 April, that it had secured a trade finance agreement with a “global commodity trading and financial house” to fund mineral consignments in Africa.

The five-year trade finance facility is expected to help Aterian transition from an exploration-focused company to an operational trading entity, reducing its reliance on equity financing and accelerating expansion in its African operations. The trading facility will be used to fund tantalum, niobium, and cassiterite mining in Rwanda and its surrounding areas. 

Tantalum and niobium are critical raw materials known for their highly corrosion-resistant properties and used in electronics and metal alloys, while cassiterite is the principal source for tin metal. 

Aterian has been expanding its metals and minerals mining operations throughout Africa, with projects in Rwanda, Morocco, and Botswana. Its mission to remain scalable and grow sustainably has seen it prioritise partnerships: a joint venture with Rio Tinto to explore Rwandan lithium mining, established in 2023, is expected to produce results soon and may lead to the development of a combined lithium, tantalum, niobium, and tin mining operation in the country.

Aterian was established in 2011 to find and develop mineral mining opportunities across Africa and support ethical supply chains to support the transition to sustainable energy production. In January 2024, shortly after the Rio Tinto deal, the firm acquired a majority stake in Atlantis Metals, which holds mineral prospecting licenses for silver, copper, and lithium brine in Botswana. 

The firm’s stock on the London Stock Exchange has fallen by 28% over the past year, hitting a one-year low this month. Concerns over its supply chains and its reliance on Chinese imports have worried investors, especially in light of the US’s recent trade war with China and US President Donald Trump’s threats to impose further tariffs on rare minerals. 

The trade finance agreement comes as mineral exploration and trading are becoming global priorities. Trump has repeatedly framed military aid to Ukraine in terms of mineral mining, and the two countries are reportedly in the process of negotiating a deal on rare earth mineral licenses in exchange for further US support. 

Minerals and critical raw materials like lithium, tantalum, and niobium are becoming more and more crucial to the global economy as they are used in the production of microprocessors, quantum processors, and EV batteries. 

The mining and trade of these critical minerals will become increasingly important as new technology, especially quantum computing and AI, continues to grow; they will also be crucial to enabling renewable energy to expand at scale. 

However, their exploration and mining are fraught with geopolitical difficulties: several mineral-rich countries are embroiled in conflict, and many mineral mining companies are vulnerable to child labour and modern slavery accusations due to their complex, hard-to-monitor supply chains. 

Investment in mineral exploration firms, including through trade finance facilities, will become more and more important to supporting sustainable mining as the world’s economy becomes increasingly reliant on minerals’ potential. 

The post Mineral exploration firm Aterian signs £3.4m trade finance deal to expand African operations appeared first on Trade Finance Global.

The WTO’s Global Trade Outlook for April 2025, published on Wednesday, 16 April, presents a grim view of international trade, one marred by reciprocal tariffs and fears of a worldwide trade war.

In its first report since Trump’s broad-ranging tariffs came into effect, the WTO revised its estimates of global trade volumes, forecasting they would fall by 0.2% in 2025 and pick up slightly in 2026, rising by 2.5%. In the October report, trade volumes were predicted to rise by 3% in 2025 after a strong 2.7% growth in 2024.

A forecasted 1.7% reduction in North American trade is largely responsible for the shift, while merchandise trade is expected to keep rising, albeit less than previous estimates, in the rest of the world. The most marked decrease is expected to be in Asian trade, now forecasted to only grow by 0.6% compared to the impressive 7.4% growth projected in the October report. 

This comes as tariffs imposed by the Trump administration come into effect all over the world; while many of the headline-making country-specific tariffs have been halted for 90 days, the 10% baseline tariff remains for all exports to the US. Nevertheless, the trade uncertainty caused by the tariff announcements and fears of further tariffs on specific industries, like pharmaceuticals or metals, is responsible for the “significant reversal” in estimates, said the WTO. 

US tariffs on China, the only ones not subject to the 90-day delay, currently stand at 145%, with a 125% reciprocal tariff levied by China on US goods. This is expected to lead to a sharp fall in US imports from China, creating opportunities for suppliers from emerging economies to fill the gap. Similarly, Chinese exports to all regions except North America are expected to rise by as much as 9% as goods are redirected outside the US.

If the currently suspended tariffs were to come into effect, they would lead to a further reduction of 0.6% in global trade, with emerging economies bearing the brunt of the effect. A rise in trade policy uncertainty, for example if more countries enacted reciprocal tariffs against the US, could lead to a further 0.8% decline, for a total of -1.5% trade growth in 2025.

The report marks the first time the WTO measures trade in services, a growing but oft-overlooked sector in global trade. Services trade is expected to grow significantly in 2025, but tariff-related uncertainty and a decrease in global trade will see it rise by just 4%, more than a percentage point below pre-tariff estimates. 

The post Global trade “deteriorated sharply,” will shrink 0.2% in 2025, said WTO in Global Trade Outlook appeared first on Trade Finance Global.

The web-based solution, called Global Trade Konnect (GTK), was conceived as a combination of Komgo’s most successful products over the past six years and will function as a full-stack solution for corporates looking to take control of their trade finance operations. 

As international tensions rise and fears of a global recession come closer and closer to reality, companies are rushing to strengthen their risk strategies. Trade finance can play a crucial role in increasing resilience and optimisation – but challenges like information misalignment, inefficiency, and fragmentation can make processes much slower and more complicated than they need to be.

This means having the correct tools to handle internal processes and overcome these challenges is becoming more and more important. Through GTK, Komgo proposes a scalable, smart, and connected solution to simplify daily trade finance operations through digital management. 

GTK is intended as a combination of a series of Komgo products covering all aspects of the trade finance pipeline and its instruments, from standby letters of credit to corporate guarantees and contracts. Capabilities from @Globaltrade, the platform Komgo acquired with GTC, will be combined with the secure communication channel and longtime Komgo staple Konsole APIs, digital document layer Trakk, and AWS’s advanced cloud capabilities.

Through streamlined and secure communication channels, companies will be able to replace emails, paper documents, and wet-ink signatures with a single digital workflow. This will enable them to manage the entire life cycle of thousands of trade instruments all in one place, which will be integrated with a range of communication channels to enable connectivity with all financial institutions. 

Advanced AI integration will drastically increase efficiency, accelerating manual processes by at least 50%. Automatic letter of credit drafting and checking, fee calculation, and bank guarantee issuance will streamline processes, while accurate and timely notifications will make it possible for even non-automated steps to be completed more quickly.

GTK’s reporting capabilities will make it easier to generate operational reports and analytics, and the data it generates will give companies the power to make accurate forecasts and improve their decision-making. 

Through GTK, Komgo has harnessed the power of the most exciting technological advancements – document digitisation, interconnectivity, and AI – to produce a copilot for corporates looking for a way to manage their trade finance activities. In today’s highly fragmented, fast-moving world, companies must be flexible and resilient. GTK promises to bring the best of Komgo to help them navigate this.

The post Komgo launches Global Trade Konnect, next-generation all-in-one trade finance solution appeared first on Trade Finance Global.

Corporate lending and trade finance are undergoing a transformation – that much, everyone can agree on. Digitisation, AI, and a market that is in constant motion make the industry one of the most exciting sides of finance, ripe with opportunities as much as challenges. 

However, how to overcome these challenges – especially in a complicated geopolitical landscape – and evolve with the opportunities remains a hot topic.

Finastra, a global provider of financial software applications, hosted its annual Europe Corporate Banking Day along with sponsors Microsoft and Tech Mahindra to discuss just that.  In London, senior executives from across the banking, technology and sustainability sectors came together to discuss the key market and technological trends in the industry: here are 5 of their main insights.

​​1. The market is shifting

Institutional investors and private credit are increasingly dominating the market, with growing appetite for direct lending as borrowers seek the best financing options. However, the lending industry still faces many challenges related to transparency, interconnectivity, inefficiencies and balancing regulation with innovation. 

Global political and economic fluctuations are also creating new trade corridors, requiring institutions to be agile and flexible and driving a shift from payables to receivables finance. 

2. Corporates expect seamless services, but digitisation remains a challenge

Corporates demand banking services that are personalised, digital, instant, and both local and global. However, an audience poll identified digitisation as the biggest challenge and opportunity, cited by 44% of institutions. Across the industry, data remains largely in paper form, creating significant barriers. 

Banks must invest in customer-centricity by implementing truly digital customer journeys, straight-through processing and automation and reduce loan approval time. Technologies such as cloud, microservices, APIs, digital ecosystems, and agentic AI will play an important role in banking’s evolution.

3. Industry expertise is declining 

As the next generation enters the workforce, institutions must capture knowledge from experienced workers before they retire, storing it in a structured database. More admin-focused roles must be migrated, upskilled, and digitized to attract younger talent. An audience poll revealed that talent attraction and retention were the biggest challenge and opportunity for almost a quarter of respondents.

4. AI is here to stay

When implemented correctly, AI can augment human capabilities, deliver automation and increase efficiency and speed in ways that would have been unthinkable just a few years ago. Large language models serve as a valuable resource for information, bridging knowledge gaps and facilitating faster decision-making. With AI, institutions can, for example, issue more letters of credit and digital trade agreements and better track, report, and fulfill sustainability commitments. 

AI can speed up document processing, compliance checking, and contract approval times. In the future, we may see autonomous supply chains and transaction processing as well as augmented smart contracts with instant settlement, all thanks to AI’s constant evolution.

5. Tokenisation experiments in trade finance 

Although it has been discussed for many years, banks today are increasingly experimenting with tokenisation. Innovations such as smart contracts and stable and risk coins can drive greater efficiencies in trade settlement and post-trade processing, improve risk management, and provide more effective access to capital. With routers, multiple use cases can be created.

However, despite the opportunities, the lack of industry standards remains a challenge. On the other hand, some argue that standards can stifle innovation and therefore should only be established once market connectivity is achieved.  

The event speakers included leaders from Finastra’s Lending business unit, such as Andrew Bateman, Lekshmi Nair, Robert Downs, Anastasia McAlpine, Sandrine Markham, Elena Sankova and Julian Lee. Other speakers represented institutions such as Microsoft, Tech Mahindra, ING, Loan Market Association, ITFA, Crédit Agricole CIB, Norddeutsche Landesbank Girozentrale and CredAble.

The post 5 takeaways from Finastra Europe Corporate Banking Day: AI, digitisation, and a changing industry appeared first on Trade Finance Global.

With more details being released by the US and some countries already releasing significant retaliatory tariffs, a clearer picture is emerging – one of a global economy which will be, at least for a short while, deeply affected by the sweeping tariff regime. Changes and adjustments resulting from this are expected to have far-reaching effects on the global trade industry, diverting trade flows and transforming supply chains. 

When Asian markets opened this morning, it was clear their adjustment to Trump’s tariffs was far from over. Japan’s Nikkei lost 7.8% and China’s main index, the Shanghai composite, lost 7.3%, the biggest fall since the 2020 pandemic. Hong Kong’s Hang Sei index had the biggest one-day drop in 28 years, closing at -13.2%. On the other hand, Asian currencies may see a resurgence as investors move away from the dollar and towards “safe havens” like the Japanese yen, Swiss franc, and Euro, all of which have risen in the past few days. 

Many Asian countries have been among the hardest-hit by Trump’s tariffs, with China subject to a staggering total 54% tariff. The US is by far China’s biggest trading partner, and the recently announced 34% retaliatory tariff is expected to hit US exporters hard when it goes into effect on 10 April. 

The two most important Indian stock indexes fell by around 5% on opening, likely in response to the 26% tariffs imposed by the US. This was in part driven by Tata motors, one of the largest Indian auto companies, which fell by over 10%. Jaguar Land Rover, one of its subsidiaries, was the first major company to announce it would halt shipments of its UK-made cars to the US due to the tariffs levied on the global auto industry. 

Amid fears of a US recession – which analysts like Goldman Sachs are now forecasting with near-certainty if all the tariffs go into effect as announced – oil prices have also dropped to a 4-year low. Brent crude, the benchmail oil marker, has continued its fall started on Friday, now costing $63.49 a barrel compared to last year’s average of about $80. 

European markets, which opened just a few hours ago, are experiencing similar shockwaves. While the UK has been widely seen as avoiding the worst of the tariffs, only being subject to the baseline 10% tariff levied against all countries (even uninhabited Antarctic islands), London’s FTSE 100 lost 4.9%. The German stock exchange fell by 10% when markets opened but has now recovered to just -5.9%, while the French Cac 40 fell by 5.7%.

This is as EU members grapple with high tariffs of 20% as well as a 25% tariff on foreign cars set to go into effect soon, which is expected to affect the already struggling German auto industry. Companies with complex supply chains, like car manufacturers, could see an exponential effect of tariffs, especially if an intermediate step of the manufacturing process happens in the US. 

The agricultural industry, too, could experience significant turbulency, as some of the countries most affected by the tariffs, such as Vietnam and Taiwan, are also among the world’s biggest coffee, cocoa, and crop exporters. This could have a ripple effect both in consumer purchasing power and in global supply chains – for example, strengthening trade between the US and Brazil, another big coffee producer that has been hit less by the tariffs. 

As companies look into diverting their supply chains, smaller players might unexpectedly come at the forefront of global trade. San Marino, a small city-state on the Adriatic coast of Italy, has been eyed as a way for some EU countries to evade US tariffs, which are 20% on the EU but only 10% on San Marino. 

It’s still hard to tell just how much the tariffs will impact the global economy, and how – as seen by the volatile response of markets to the changes. Retaliatory tariffs on the one hand could exacerbate the situation and lead to an all-out global trade war, while negotiation attempts could de-escalate current tensions and lead to a much softer impact on the global economy.

The post Markets react to Liberation Day tariffs as global trade hangs in the balance appeared first on Trade Finance Global.

After months of starts and stops, threats and retreats, Liberation Day is upon us. The Trump administration’s promised wide-ranging regime of tariffs, a cornerstone of his winning presidential campaign, was set for 2 April. Some countries scrambled to negotiate last-minute deals while others are searching for ways to restructure their supply chains – often by moving closer to the US’ s rivals – all in the wake of what is anticipated to be the biggest unilateral tariff escalation since the 1950s Cuban embargo. 

Amidst the confusion and ever-changing policies, the TFG team has compiled a summary of the story thus far and the tariffs as they stand now – updated live every day.

How did we get here?

Throughout the US presidential campaign last year, trade and tariffs have been at the forefront of Republican messaging, forming a core part of Trump’s plan to revive the US economy. While blanket tariffs – of as much as 60% on US rivals like China – were memorably floated during rallies and speeches, more recent declarations by the Trump administration have focused around so-called “reciprocal” tariffs. 

These unilateral import taxes are meant to “make up for” trade barriers that (the President believes) are being unfairly levied against the US, in the form of taxes, subsidies, regulation, and red tape. This seems to suggest that tariffs will vary wildly between countries and even from one industry to the next depending on their importance to US trade and the level of trade barriers. That the tariffs are, at least, in part, targeted towards ending “unfair practices that have been ripping off [the US] for decades” suggests that negotiation is possible, and proposed tariffs may be reduced or lifted if receiving countries make concessions on US exports. 

Tariff timeline

1 February – Trump announces tariffs on Canada and Mexico

In a series of executive orders, Trump imposed a 25% tariff on nearly all goods from Canada and Mexico, scheduled to come into effect on 4 February. Canadian oil and energy imports would have been exempt from this, instead only being taxed at 10%. In the same set of orders, Chinese imports are set to be subject to a 10% tariff on top of currently existing taxes. 

3 February – Trump delays tariffs after retaliation threats

The day before the 25% tariff was set to begin, the Trump administration reached a deal with Canada and Mexico’s leaders to delay them by a month after the two countries threatened strong retaliatory taxes on American exports. 

4 March – Canada and Mexico tariffs really do come into effect

A month after the tariffs were meant to begin, US tariffs against Canada and Mexico came into effect, as did Canada’s retaliatory levies. The White House also announces a doubling of blanket tariffs on Chinese goods, from 10% to 20%, set to start the following day. 

6 March – Trump delays (some) tariffs, again

Just two days after the US–Canada–Mexico tariffs come into effect, the US once again delays tariffs on about half of goods – those covered by the USMCA free trade treaty – by another few weeks. The full set of tariffs are now scheduled to go into effect on 2 April. 

2 April – Liberation Day

Most tariffs on all industries and all areas of the world are expected to be announced, and some even to go into effect, today. This is likely to affect even countries that have already been affected by some tariffs and those who have long-standing trade agreements with the US. It is also the day that the USMCA exemption, which lifted tariffs on many Canadian and Mexican goods, will run out, leaving the US’s two main trading partners facing steep tariffs that may not be delayed again. 

3 April – Auto tariffs

Proposed tariffs specifically targeting passenger cars and trucks from any country, speculated to be as high as 25%, are set to go into effect on 3 April. 

3 May – Deadline for tariffs on auto parts

According to the same executive order that imposed tariffs on cars, a 25% tariff on auto parts will go into effect before 3 May. 

TFG Tariff Tracker

As information about the new tariffs is released throughout the day, the TFG team will keep updating the timeline and publish summaries of which industries and areas are being most affected. 

The post TFG Tariff Tracker: What’s in store for Liberation Day? appeared first on Trade Finance Global.