This article is an on-site version of our Trade Secrets newsletter. Sign up here to get the newsletter sent straight to your inbox every MondayMe again. The WTO ministerial that finished last weekend has already pretty much disappeared in the rear-view mirror, the main topic of debate now being what the WTO can actually do now that it finds it so hard to negotiate. It can certainly still arbitrate, at least for countries that co-operate with its dispute settlement process. As I noted last week, that’s where a lot of the environment-related trade issues (see here for the EU making a tactical retreat on its controversial deforestation rules) are going to get addressed. Today’s main pieces are on trade in the US presidential election and the UK’s unconvincing attempts to pretend it will have an independent policy on carbon border tariffs. Charted Waters is on US uranium production.Get in touch. Email me at [email protected] puts on a showJoe Biden’s State of the Union speech last week was great for sheer entertainment value, especially watching the badly concealed disappointment of those expecting it to reveal decrepitude rather than vim on the part of the president.For our mundane purposes, however, the speech didn’t have much detail on trade and even on China. In nearly 6,500 words, Biden mentioned China in just a few sentences, saying that he had stood up to Beijing’s unfair economic practices, that the bilateral trade deficit was at its lowest point in a decade and that he had done more than Donald Trump to keep sensitive US technologies out of Chinese hands. (The last of these is probably true, though whether that’s going to work in the long run is a different matter.)Apart from that, no mentions of trade policy (worker-centred or otherwise), no mentions of the international economy, no mention of breaking with a previous consensus on managing globalisation. Surprising? Not necessarily. Despite Trump’s trade war with China (and in fact with more or less everybody) during his first term, it wasn’t a big issue in the following 2020 election. Going further back, you might have thought it played a pivotal role in the 2016 election, given Hillary Clinton’s position as paid-up member of the globalist elite, but she sought to neutralise that by backing away from the Trans-Pacific Partnership deal that she had herself helped to negotiate.In reality, American voters’ response to trade issues isn’t straightforward. The standard view is, of course, that Trump won in 2016 by appealing to the left-behind in America’s heartland, who had suffered from the famous “China shock” in the form of competition from Chinese imports: see here for the famous academic paper on the subject. But there’s some evidence that this was true more in a symbolic than a substantive way. The China shock did turn some voters to Trump, but more via cultural attitudes such as a perceived threat to American dominance — or to racial dominance within America — than via actual economic impact.More recently, an intriguing paper by the three authors (plus another one) of the original China shock study argues that Trump’s tariff war on China didn’t actually help the economy in the locales he protected with tariffs, but did increase the Republican vote there. It seems that performatively putting up a fight is more important than winning it. Hence, of course, the Biden administration’s obsessive targeting of trade policy on the steel industry, which is strong in the Midwest swing states. It’s almost beside the point whether protectionism actually helps steel production. It very likely won’t. The point is that Biden has to be seen to be trying.Britain sidles towards the EU’s camp on carbonSpeaking of governments desperate to display results from trade policy ahead of an election, let’s pop our heads round the UK’s door and check how that whole “pretending not to be an EU economic satellite” thing is going.As noted in the links below, Britain’s trade deal with India looks like it’s off for a while, if not indefinitely. Barring a couple of deals with countries literally as far away on the planet as you could get, a regional agreement which adds pitifully little to UK GDP and some meaningless (see Section 11 here) pieces of paper signed with US states, the Brexit benefits cupboard looks pretty bare.In the meantime, the UK may not be interested in EU trade policy, but EU trade policy is certainly interested in the UK. Britain is right on the frontline of Brussels’ carbon border adjustment mechanism (CBAM). Companies are already having to report the emissions embedded in imports to the bloc ahead of duties being levied in 2026.The UK is currently saying it will bring in its own CBAM, which, whether the government wants to admit it or not, is clearly a response to the EU version. (You can imagine the reaction if cheap emissions-intensive Indian steel is priced out of the EU and floods into the UK, putting British steelmakers out of business.) But it insists the UK CBAM won’t be the same as the EU version, because we say so, and to prove the point will be brought in a year later in 2027, so there.It’s hard to imagine this pose is going to survive after the forthcoming general election, whoever wins it, and certainly not if it’s a Labour government with less of a neurotic urge to diverge than the Conservatives. As this research paper from the excellent House of Commons Library points out, being outside the EU CBAM will mean paying tariffs if the UK and EU carbon prices are different — it will be a tricky sell to the British public that their exports should be taxed to fill Brussels’ coffers — and will create potentially awkward bureaucracy even if they’re the same. It will also cause all sorts of difficulties with Northern Ireland.The gravitational pull of the continent is strong. By the time an EU CBAM starts collecting duties I’d be surprised if the UK hasn’t at least aligned its carbon price with the Brussels version if not actually relinked to the EU emissions trading system altogether. Still, sovereignty.Charted watersDemand for many minerals is rising at a time of increased concerns over security of supply, and mothballed mines are accordingly being reopened around the world. One of the latest to see a surge of interest is uranium. As the FT explains, US uranium facilities that closed after Japan’s Fukushima nuclear accident in 2011 are restarting production because of rising uranium prices and an aversion to dependence on imports from Russia.Trade linksIndia has signed another of its lightweight trade deals, this one with the European Free Trade Association countries (Iceland, Liechtenstein, Norway and Switzerland), which excludes a bunch of things that either side has a strong competitive advantage in, including and especially the sensitive bits of agriculture such as dairy. Meanwhile, it looks like the UK won’t get the (to be fair more substantial) bilateral with India it seeks this side of India’s forthcoming general election.HERESY ALERT. Angus Deaton, legendary development economist and Nobel Prize winner in economics, has changed his mind on several issues including the merits of open trade and high immigration for the US.The Dutch government is worrying that the EU is too heavy-handed in its green trade policy towards lower-income countries.Chinese trade rebounds with increases in electronics exports and sales to Russia, while the US tries to get its allies to tighten controls on selling chipmaking kit to China.The FT editorial board opines on Javier Milei’s ambitious plans to drag Argentina away from its status as a perennial basket case.The Wall Street Journal looks at the shipping problems in the Suez and Panama canals.Trade Secrets is edited by Jonathan MoulesRecommended newsletters for youBritain after Brexit — Keep up to date with the latest developments as the UK economy adjusts to life outside the EU. Sign up hereFree Lunch — Your guide to the global economic policy debate. Sign up here More
