The power of six
To celebrate Import Export Support’s sixth anniversary, I’ve been looking back at the events which have had a big effect on our line of work – it’s been a tumultuous six years!
2014
July: Oil prices crash.
What goes up can come down. At the beginning of the month oil costs over $100 a barrel but after OPEC stops supporting the price, it drops to $50 or less and there is a glut of cheap oil. Prices remain well below 2014 levels.
August: Ebola declared an international health emergency
Trade and economic activity across West Africa is affected by the “largest, most severe and most complex Ebola epidemic” in history, according to the World Health Organization. 28,000 people are infected and 11,000 people die.
1st September: Launch of Import Export Support
I take a deep breath and launch IES, with the objective of offering professional expertise to importers and exporters in East Anglia.
2015
August: China devalues the Renminbi
Beijing sends shock waves through global financial markets when it devalues the Renminbi or yuan against the dollar and investors take it as a sign that the Chinese economy is in trouble. The Shanghai stock market plunges, China reports lower than expected growth of ‘only’ 6.9 percent and economic growth around the world slows. In the UK, importers worry that trade with China may never return and start to review their sourcing strategies
October: TPP finally gets done.
After seven years of negotiations, the US, Canada, Australia and nine other countries finally agree the Trans-Pacific Partnership, the largest regional trade deal in history. However, in 2017 new US President Donald Trump takes the US out of the agreement. Undeterred, the eleven other countries negotiate their own deal which incorporates most of the old TPP but excludes the US.
2016
May: The EU launch the Union Customs Code
In a major change for UK businesses who trade in the EU, the UCC is the result of years of planning to streamline and simplify trade across the single market. By bringing most of the EU’s customs legislation into one package and clarifying rules of application, it is designed to make trade between EU based businesses simpler, quicker and less of a burden.
June: The EU referendum
Treat poll results with a grain of salt. That’s the lesson of Britain’s referendum on leaving the EU. Despite the predicted victory for Remain, Britons vote 52 to 48 percent for Leave. The vote highlights Britain’s fundamental divisions, ends the career of David Cameron and throws our political system into turmoil. Theresa May emerges from the resulting Conservative Party scrum to become the new prime minister.
In East Anglia, importers and exporters look on with either leaver’s optimism or remainer’s pessimism at an unexpected future outside the EU.
2017
March: Britain triggers Article 50
Prime Minister May signs Article 50 of the Lisbon Treaty. The move “from which there can be no turning back” gives Britain two years to negotiate the terms of its departure.
June: Theresa May tries to shore up a weak negotiating position by calling a snap election. Her decision backfires, the Conservatives lose 13 seats and May now has to manage a hung parliament.
December: Britain and the EU reach agreement to a payment of up to £60b to settle Britain’s debt to the EU. The two sides now focus on negotiating their future relationship. For importers and exporters the possibility of a hard Brexit is increasing. The clock is ticking.
October: Global growth picks up
Ten years after the Great Recession the IMF reports global economic growth is hitting record highs. “The outlook is strengthening… The Eurozone growth was at a ten-year high… The U.S. economy grew 3.3 percent in the third quarter… China beat its target of 6.5 percent growth.”
2018
January: Trump starts a trade war.
“I want tariffs,” Donald Trump tells his advisers and he gets his wish. In January the US administration imposes import tariffs on washing machines and solar panels, in March on steel and aluminium, and in July on $250 billion worth of Chinese imports.
However, despite the President tweeting that “Trade wars are good, and easy to win,” US tariffs hurt more than help Americans. Trump has second thoughts about just how easy trade wars are and in July, the US strikes a deal with the EU to stop any further tariffs and start trade talks. In November, a trade truce is agreed with China.
2019
March: Brexit upends British politics.
As the March deadline for leaving the EU looms, Prime Minister Theresa May can’t persuade the House of Commons to approve the deal she has struck with the EU. The sticking point is the so-called backstop, designed to avoid a customs barrier in the Irish Sea. May delays Brexit until October 31, and after MPs vote down her deal for the third time, she resigns.
July: The Conservative Party elect Boris Johnson to be prime minister. He strikes a new deal with the EU that includes a customs barrier between Northern Ireland and the rest of the UK. Saddled with May’s hung parliament he employs controversial tactics to push the deal through, without success. Johnson, forced to extend the withdrawal deadline to January 2020, calls a snap election. British voters reward him, the Conservatives win their biggest majority in three decades, and, finally on December 20, MPs approve a deal to exit the EU.
May: The US – China trade war reignites
Further negotiations between the US and China are interspersed with tit-for-tat tariffs until in October a tentative agreement is reached. Both sides claim victory, however major disagreements between the two economic superpowers remain unresolved.
2020
31 January, a red letter day for business in Britain
The European Council lowers the Union Jack, signalling that Britain is no longer a member state. Britain’s importers and exporters, having had a three year roller-coaster ride through many trade scenarios, can now look forward with more certainty, and there are signs that confidence is rising in Britain’s business community.
Ominously, 31 January is also the day when the BBC reports “Two people have tested positive for coronavirus in the UK”. As we now know, Britain’s first COVID19 cases forewarn us of a situation where, for importers and exporters, the events of the previous six years pale into insignificance.