News / Trade is 'fundamentally changing' amid the global tangle of tariffs

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“The fabric of trade is fundamentally changing” as global negotiations begin to cement, and the EU readies countermeasures for a possible ‘no deal’ on 1 August.  

Yesterday, the EC published a 257-page document outlining retaliatory duty rates for US imports should a suitable deal not be negotiated before next Friday, 1 August.  

They include 10%-30% import tariffs on US steel and aluminium, automotive, consumer and industrial products, textiles and apparel and dairy, meat and agricultural goods, and are set to be implemented between 7 August and 7 February 2026.  

Whilst these rates are conditional, The Guardian reports today that the US and EU are likely to reach an impasse on the US’s 50% tariff on EU steel imports. 

But some more are optimistic. Braemar noted in its Weekly Container Market Development Report that European stocks hit a six-week high on Thursday following a report in the Financial Times that the US and EU were “closing in on a 15% tariff deal” to avoid the steeper 30% tariff President Trump threatened could come into force on 1 August. 

Meanwhile, following the 25th summit between the EU and China, EU president Ursula von der Leyen said the trade deficit between the two had reached “a clear inflection point”. 

“The EU accounts for an impressive 14.5% of China’s total exports, yet China only represents 8% of our exports… The EU’s trade deficit with China has doubled in the last decade, reaching more than €300bn… For trade to remain mutually beneficial, it must become more balanced,” she said.  

“We are ready to enhance bilateral cooperation… The next 50 years of EU-China relations will be shaped by the choices we make today,” added Ms von der Leyen.  

Meanwhile, the UK and India sealed a £4.8bn ($6.45bn) trade deal yesterday. Tariffs on more than 90% of British exports to India will be cut, including cosmetics, clothes, food and drink, believed to the boost that trade by some 60% by 2040.  

Hugo Pakula, CEO of automated customs compliance company Tru Identity, told The Loadstar “the fabric of trade is fundamentally changing”, adding: “Almost forever, [duties] were just based on what commodity you were moving, and so you could gain efficiency by reclassifying.

“I think it was Converse that added a strip of wool around the base of a shoe, and as soon as the wool content of the base was above 20%, it was considered a slipper. So, by adding that [strip of wool], they saved 12% on duty.” 

Mr Pakula noted that while this so called ‘tariff engineering’ had been used for years, “it’s quite literally the country you source from that dictates most of the cost”.  

He explained: “That’s only true when tariff rates are high. When we’re talking Brazil getting a 50% tariff rate, I mean, that’s a huge, huge change.”

He added that this shift had led to “definite interest” and an uptick in re-sourcing. 

“People are getting ahead of two years from now, where de minimis goes away and trade agreements or tariffs are very high based on country, and are re-locating to low-tariff countries,” he explained.  

But Mr Pakula warned businesses considering alternative sourcing that “just because it’s low-tariff, other costs can be higher”, and that they would need to calculate overall costs based on their specific vertical.