President Donald Trump promised that a wave of emergency tariffs on nearly every nation would restore “fair” trade and jump-start the economy. Eight months later, half of U.S. imports are avoiding those tariffs. “To all of the foreign presidents, prime ministers, kings, queens, ambassadors, and everyone else who will soon be calling to ask for exemptions from these tariffs,” Trump said in April when he rolled out global tariffs based on the United States’ trade deficits with other countries, “I say, terminate your own tariffs, drop your barriers, don’t manipulate your currencies.” But in the time since the president gave that Rose Garden speech announcing the highest tariffs in a century, enormous holes have appeared. Carveouts for specific products, trade deals with major allies and conflicting import duties have let more than half of all imports escape his sweeping emergency tariffs. Some $1.6 trillion in annual imports are subject to the tariffs, while at least $1.7 trillion are excluded, either because they are duty-free or subject to another tariff, according to a POLITICO analysis based on last year’s import data. The exemptions on thousands of goods could undercut Trump’s effort to protect American manufacturing, shrink the trade deficit and raise new revenue to fund his domestic agenda. In September, the White House exempted hundreds of goods, including critical minerals and industrial materials, totaling nearly $280 billion worth of annual imports. Then in November, the administration exempted $252 billion worth of mostly agricultural imports like beef, coffee and bananas, some of which are not widely produced in the U.S. — just after cost-of-living issues became a major talking point out of Democratic electoral victories — on top of the hundreds of other carveouts. “The administration, for most of this year, spent a lot of time saying tariffs are a way to offload taxes onto foreigners,” said Ed Gresser, a former assistant U.S. trade representative under Democratic and Republican administrations, including Trump’s first term, who now works at the Progressive Policy Institute, a D.C.-based think tank. “I think that becomes very hard to continue arguing when you then say, ‘But we are going to get rid of tariffs on coffee and beef, and that will bring prices down.’ … It’s a big retreat in principle.” The Trump administration has argued that higher tariffs would rebalance the United States’ trade deficits with many of its major trading partners, which Trump blames for the “hollowing out” of U.S. manufacturing in what he evoked as a “national emergency.” Before the Supreme Court, the administration is defending the president’s use of the 1977 International Emergency Economic Powers Act to enact the tariffs, and Trump has said that a potential court-ordered end to the emergency tariffs would be “country-threatening.” In an interview with POLITICO on Monday, Trump said he was open to adding even more exemptions to tariffs. He downplayed the existing carveouts as “very small” and “not a big deal,” and said he plans to pair them with tariff increases elsewhere. Responding to POLITICO’s analysis, White House spokesperson Kush Desai said, “The Trump administration is implementing a nuanced and nimble tariff agenda to address our historic trade deficit and safeguard our national security. This agenda has already resulted in trillions in investments to make and hire in America along with over a dozen trade deals with some of America’s most important trade partners.” To date, the majority of exemptions to the “reciprocal” tariffs — the minimum 10 percent levies on most countries — have been for reasons other than new trade deals, according to POLITICO’s analysis. The White House also pushed back against the notion that November’s cuts were made in an effort to reduce food prices, saying that the exemptions were first outlined in the September order. The U.S. granted subsequent blanket exemptions, regardless of the status of countries’ trade negotiations with the Trump administration, after announcing several trade deals. Following the exemptions on agricultural tariffs, Trump announced on Monday a $12 billion relief aid package for farmers hurt by tariffs and rising production costs. The money will come from an Agriculture Department fund, though the president said it was paid for by revenue from tariffs (by law, Congress would need to approve spending the money that tariffs bring in). In addition to the exemptions from Trump’s reciprocal tariffs, more than $300 billion of imports are also exempted as part of trade deals the administration has negotiated in recent months, including with the European Union, the United Kingdom, Japan and more recently, Malaysia, Cambodia and Brazil. The deal with Brazil removed a range of products from a cumulative tariff of 50 percent, making two-thirds of imports from the country free from emergency tariffs. For Canadian and Mexican goods, Trump imposed tariffs under a separate emergency justification over fentanyl trafficking and undocumented migrants. But about half of imports from Mexico and nearly 40 percent of those from Canada will not face tariffs because of the U.S.-Mexico-Canada free trade agreement that Trump negotiated in his first term. Last year, importers claimed USMCA exemptions on $405 billion in goods; that value is expected to increase, given that the two countries are facing high tariffs for the first time in several years. The Trump administration has also exempted several products — including autos, steel and aluminum — from the emergency reciprocal tariffs because they already face duties under Section 232 of the U.S. Trade Expansion Act of 1962. The imports covered by those tariffs could total up to $900 billion annually, some of which may also be exempt under USMCA. The White House is considering using the law to justify further tariffs on pharmaceuticals, semiconductors and several other industries. For now, the emergency tariffs remain in place as the Supreme Court weighs whether Trump exceeded his authority in imposing them. In May, the U.S. Court of International Trade ruled that Trump’s use of emergency authority was unlawful — a decision the U.S. Court of Appeals upheld in August. During oral arguments on Nov. 5, several Supreme Court justices expressed skepticism that the emergency statute authorizes a president to levy tariffs, a power constitutionally assigned to Congress. As the rates of tariffs and their subsequent exemptions are quickly added and amended, businesses are struggling to keep pace, said Sabine Altendorf, an economist with the Food and Agriculture Organization of the United Nations. “When there’s uncertainty and rapid changes, it makes operations very difficult,” Altendorf said. “Especially for agricultural products where growing times and planting times are involved, it’s very important for market actors to be able to plan ahead.” ABOUT THE DATA Trump’s trade policy is not a straightforward, one-size-fits-all approach, despite the blanket tariffs on most countries of the world. POLITICO used 2024 import data to estimate the value of goods subject to each tariff, accounting for the stacking rules outlined below. Under Trump’s current system, some tariffs can “stack” — meaning a product can face more than one tariff if multiple trade actions apply to it. Section 232 tariffs cover automobiles, automobile parts, products made of steel and aluminum, copper and lumber — and are applied in that order of priority. Section 232 tariffs as a whole then take priority over other emergency tariffs. We applied this stacking priority order to all imports to ensure no double-counting. To calculate the total exclusions, we did not count the value of products containing steel, aluminum and copper, since the tariff would apply only to the known portion of the import’s metal contentand not the total import value of all products containing them. This makes the $1.7 trillion in exclusions a minimum estimate. Goods from Canada and Mexico imported under USMCA face no tariffs. Some of these products fall under a Section 232 category and may be charged applicable tariffs for the non-USMCA portion of the import. To claim exemptions under USMCA, importers must indicate the percentage of the product made or assembled in Canada or Mexico. Because detailed commodity-level data on which imports qualify for USMCA is not available, POLITICO’s analysis estimated the amount that would be excluded from tariffs on Mexican and Canadian imports by applying each country’s USMCA-exempt share to its non-Section 232 import value. For instance, 38 percent of Canada’s total imports qualified for USMCA. The non-Section 232 imports from Canada totaled around $320 billion, so we used only $121 billion towards our calculation of total goods excluded from Trump’s emergency tariffs. Exemptions from trade deals included those with the European Union, the United Kingdom, Japan, Brazil, Cambodia and Malaysia. They do not include “frameworks” for agreements announced by the administration. Exemptions were calculated in chronological order of when the deals were announced. Imports already exempted in previous orders were not counted again, even if they appeared on subsequent exemption lists.

LONDON — The British government is working to give its trade chief new powers to move faster in imposing higher tariffs on imports, as it faces pressure from Brussels and Washington to combat Chinese industrial overcapacity. Under new rules drawn up by British officials, Trade Secretary Peter Kyle will have the power to direct the Trade Remedies Authority (TRA) to launch investigations and give ministers options to set higher duty levels to protect domestic businesses. The trade watchdog will be required to set out the results of anti-dumping and anti-subsidy investigations within a year, better monitor trade distortions and streamline processes for businesses to prompt trade probes. The U.K. is in negotiations with the U.S. and the EU to forge a steel alliance to counter Chinese overcapacity as the bloc works to introduce its own updated safeguards regime. The EU is the U.K.’s largest market and Brussels is creating a new steel protection regime that is set to slash Britain’s tariff-free export quotas and place 50 percent duties on any in excess. The government said its directive to the TRA will align the U.K. with similar powers in the EU and Australia, and follow World Trade Organization rules. It is set out in a Strategic Steer to the watchdog and will be introduced as part of the finance bill due to be wrapped up in the spring. “We are strengthening the U.K.’s system for tackling unfair trade to give our producers and manufacturers — especially SMEs who have less capacity and capability — the backing they need to grow and compete,” Business and Trade Secretary Peter Kyle said in a statement. “By streamlining processes and aligning our framework with international peers, we are ensuring U.K. industry has the tools to protect jobs, attract investment and thrive in a changing global economy,” Kyle added. These moves come after the government said on Wednesday that its Steel Strategy, which plots the future of the industry in Britain and new trade protections for the sector, will be delayed until next year. The Trump administration has been concerned about the U.K.’s steps to counter China’s steel overcapacity and refused to lower further a 25 percent tariff carve-out for Britain’s steel and aluminum exports from the White House’s 50 percent global duties on the metals. Trade Secretary Kyle discussed lowering the Trump administration’s tariffs on U.K. steel with senior U.S. Cabinet members in Washington on Wednesday.  “We are very much on the case of trying to sort out precisely where we land with the EU safeguard,” Trade Minister Chris Bryant told parliament Thursday, after meeting with EU Trade Commissioner Maroš Šefčovič on Wednesday for negotiations. “We will do everything we can to make sure that we have a strong and prosperous steel sector across the whole of the U.K.,” Bryant said. The TRA has also launched a new public-facing Import Trends Monitor tool to help firms detect surges in imports that could harm their business and provide evidence that could prompt an investigation by the watchdog. “We welcome the government’s strategic steer, which marks a significant milestone in our shared goal to make the U.K.’s trade remedies regime more agile, accessible and assertive, as well as providing greater accountability,” said the TRA’s Co-Chief Executives Jessica Blakely and Carmen Suarez. Sophie Inge and Jon Stone contributed reporting.

The European Commission has lost access to its control panel for buying and tracking ads on Elon Musk’s X — after fining the social media platform €120 million for violating EU transparency rules. “Your ad account has been terminated,” X’s head of product, Nikita Bier, wrote on the platform early Sunday. Bier accused the EU executive of trying to amplify its own social media post about the fine on X by trying “to take advantage of an exploit in our Ad Composer — to post a link that deceives users into thinking it’s a video and to artificially increase its reach.” The Commission fined X on Thursday for breaching the EU’s rules under the Digital Services Act (DSA), which aims to limit the spread of illegal content. The breaches included a lack of transparency around X’s advertising library and the company’s decision to change its trademark blue checkmark from a means of verification to a “deceptive” paid feature. “The irony of your announcement,” Bier said. “X believes everyone should have an equal voice on our platform. However, it seems you believe that the rules should not apply to your account.” Trump administration has criticized the DSA and the Digital Markets Act, which prevent large online platforms, such as Google, Amazon and Meta, from overextending their online empires. The White House has accused the rules of discriminating against U.S. companies, and the fine will likely amplify transatlantic trade tensions. U.S. Secretary of Commerce Howard Lutnick has already threatened to keep 50 percent tariffs on European exports of steel and aluminum unless the EU loosens its digital rules. U.S. Vice President JD Vance blasted Brussels’ action, describing the fine as a response for “not engaging in censorship” — a notion the Commission has dismissed. “The DSA is having not to do with censorship,” said the EU’s tech czar, Henna Virkkunen, told reporters on Thursday. “This decision is about the transparency of X.”

BRUSSELS — U. S. Vice President JD Vance has hit out at the EU’s digital rules enforcement, saying the EU should not be “attacking American companies over garbage.” “Rumors swirling that the EU commission will fine X hundreds of millions of dollars for not engaging in censorship. The EU should be supporting free speech not attacking American companies over garbage,” Vance wrote on X overnight. X owner Elon Musk immediately thanked the U.S. official, commenting, “Much appreciated.”  The European Commission opened formal proceedings against X under its Digital Services Act in December 2023, roughly a year after Musk bought Twitter and rebranded it as X. But the EU has yet to finalize its probe, after accusing X of breaching its obligations around transparency and blue checkmarks in preliminary findings in July 2024. A decision could come as early as Friday, according to media reports Thursday. Under the EU rules, companies can be fined up to 6 percent of their annual global turnover. French President Emmanuel Macron last week voiced concerns about the slow pace of Brussels’ probes into American tech giants, adding to a growing chorus of criticism that the bloc has been too slow to enforce its flagship Digital Services Act amid U.S. pressure. Washington has repeatedly asked the EU to roll back its digital rule book as part of trade negotiations, and last week U.S. Secretary of Commerce Howard Lutnick put this on the table again as an explicit exchange for scrapping tariffs on steel and aluminum in ongoing talks. Asked earlier Thursday how she feels about a looming diplomatic showdown if she slaps a fine on a U.S. tech giant, Commission digital chief Henna Virkkunen told POLITICO: “I’m quite calm in different situations. I’m not surprised about anything. I’m protecting our laws. But at the same time we are going to make Europe faster and simpler and easier for businesses.” Asked if she’s afraid of the U.S.’s reaction to a fine under the DSA, Virkkunen responded with a single word: “No.”

BRUSSELS — Europe’s most energy-intensive industries are worried the European Union’s carbon border tax will go too soft on heavily polluting goods imported from China, Brazil and the United States — undermining the whole purpose of the measure. From the start of next year, Brussels will charge a fee on goods like cement, iron, steel, aluminum and fertilizer imported from countries with weaker emissions standards than the EU’s. The point of the law, known as the Carbon Border Adjustment Mechanism, is to make sure dirtier imports don’t have an unfair advantage over EU-made products, which are charged around €80 for every ton of carbon dioxide they emit. One of the main conundrums for the EU is how to calculate the carbon footprint of imports when the producers don’t give precise emissions data. According to draft EU laws obtained by POLITICO, the European Commission is considering using default formulas that EU companies say are far too generous. Two documents in particular have raised eyebrows. One contains draft benchmarks to assess the carbon footprint of imported CBAM goods, while the second — an Excel sheet seen by POLITICO — shows default CO2 emissions values for the production of these products in foreign countries. These documents are still subject to change. National experts from EU countries discussed the controversial texts last Wednesday during a closed-door meeting, and asked the Commission to rework them before they can be adopted. That’s expected to happen over the next few weeks, according to two people with knowledge of the talks. Multiple industry representatives told POLITICO that the proposed estimated carbon footprint values are too low for a number of countries, which risks undermining the efficiency of the CBAM. For example, some steel products from China, Brazil and the United States have much lower assumed emissions than equivalent products made in the EU, according to the tables. Ola Hansén, public affairs director of the green steel manufacturer Stegra, said he had been “surprised” by the draft default values that have been circulating, because they suggest that CO2 emissions for some steel production routes in the EU were higher than in China, which seemed “odd.” “Our recommendation would be [to] adjust the values, but go ahead with the [CBAM] framework and then improve it over time,” he said. Antoine Hoxha, director general of industry association Fertilizers Europe, also said he found the proposed default values “quite low” for certain elements, like urea, used to manufacture fertilizers. “The result is not exactly what we would have thought,” he said, adding there is “room for improvement.” But he also noted that the Commission is trying “to do a good job but they are extremely overwhelmed … It’s a lot of work in a very short period of time.” Multiple industry representatives told POLITICO that the proposed estimated carbon footprint values are too low for a number of countries, which risks undermining the efficiency of the CBAM. | Photo by VCG via Getty Images While a weak CBAM would be bad for many emissions-intensive, trade-exposed industries in the EU, it’s likely to please sectors relying on cheap imports of CBAM goods — such as European farmers that import fertilizer — as well as EU trade partners that have complained the measure is a barrier to global free trade. The European Commission declined to comment. DEFAULT VERSUS REAL EMISSIONS Getting this data right is crucial to ensure the mechanism works and encourages companies to lower their emissions to pay a lower CBAM fee. “Inconsistencies in the figures of default values and benchmarks would dilute the incentive for cleaner production processes and allow high-emission imports to enter the EU market with insufficient carbon costs,” said one CBAM industry representative, granted anonymity to discuss the sensitive talks. “This could result in a CBAM that is not only significantly less effective but most likely counterproductive.” The default values for CO2 emissions are like a stick. When the legislation was designed, they were expected to be set quite high to “punish importers that are not providing real emission data,” and encourage companies to report their actual emissions to pay a lower CBAM fee, said Leon de Graaf, acting president of the Business for CBAM Coalition. But if these default values are too low then importers no longer have any incentive to provide their real emissions data. They risk making the CBAM less effective because it allows imported goods to appear cleaner than they really are, he said. The Commission is under pressure to adopt these EU acts quickly as they’re needed to set the last technical details for the implementation of the CBAM, which applies from Jan. 1. However, de Graaf warned against rushing that process. On the one hand, importers “needed clarity yesterday” because they are currently agreeing import deals for next year and at the moment “cannot calculate what their CBAM cost will be,” he said. But European importers are worried too, because once adopted the default emission values will apply for the next two years, the draft documents suggest. The CBAM regulation states that the default values “shall be revised periodically.” “It means that if they are wrong now … they will hurt certain EU producers for at least two years,” de Graaf said.

BRUSSELS — Europe’s antitrust chief Teresa Ribera has unleashed a blistering attack on the Trump administration, accusing Washington of using “blackmail” to strong-arm the EU into watering down its tech rulebook. Commerce Secretary Howard Lutnick said on Monday in Brussels that the U.S. could modify its approach on steel and aluminum tariffs if the EU reconsidered its digital rules. European officials interpreted his remarks as an attack against the EU’s flagship tech regulations, including the Digital Markets Act (DMA). “It is blackmail,” the Spanish commissioner told POLITICO in an interview on Wednesday. “[This] being their intention does not mean that we accept that kind of blackmail.” Ribera — who as executive vice president of the Commission ranks second to President Ursula von der Leyen — said the EU’s digital rulebook should have nothing to do with trade negotiations. Donald Trump’s team is seeking to overhaul the framework trade agreement he struck with von der Leyen at his Scottish golf resort in July. The intervention lands at a sensitive time in ongoing trade talks. Washington views the DMA as discriminatory because the large technology platforms it regulates — like Microsoft, Google or Amazon — are nearly all American. It also takes exception to the Digital Services Act, which seeks to curb illegal online speech, seeing it as designed to restrict social networks like Elon Musk’s X. Ribera said the rules were a matter of sovereignty and should not be brought into the scope of a trade negotiation. “We respect the rules, whatever rules, they’ve got for their market: digital market, health sector, steel, whatever … cars, standards,” she said referring to the U.S. “It is their problem. It is their regulation and their sovereignty. So it is the case here.”  Ribera, along with EU tech chief Henna Virkkunen, oversees the DMA, which polices the behavior of large digital platforms and seeks to uphold fair competition. She weighed in forcefully on comments Lutnick made after he met EU officials and ministers on Monday, saying “the European digital rulebook is not up for negotiation.” Virkkunen echoed that view on Tuesday. On Monday she presented the EU’s simplification package, including the digital omnibus proposal, to her American counterparts. The package has been presented as an EU-centric push to reduce red tape, but interpreted by some as an attempt to address the concerns of U.S. Big Tech around regulation. Commerce Secretary Howard Lutnick said on Monday in Brussels that the U.S. could modify its approach on steel and aluminum tariffs if the EU reconsidered its digital rules. | Nicolas Tucat/Getty Images Asked why she had made such a strong statement, Ribera answered that Lutnick’s remarks were “a direct attack against the DMA.” She added: “It is under my responsibility to defend a well-functioning digital market in Europe.”  CRACKS ARE SHOWING Despite the uncompromising response from Ribera, solidarity over the DMA is starting to show subtle cracks among EU countries.  Lutnick said after Monday’s meeting that some EU trade ministers weren’t as resistant as the Commission to the idea of reviewing the bloc’s digital rules. “I see a lot of ministers … some are more open-minded than others,” he told Bloomberg TV, saying that if Europe wants U.S. investment it should change its regulatory model. At least one European participant appeared to agree. Germany’s Katherina Reiche, speaking on the sidelines of the meeting, told reporters that she was in favor of a further loosening of the EU’s digital rules.  “Germany has made it clear that we want opportunities to play a part in the digital world,” said Reiche, specifically citing the Digital Markets Act and the Digital Services Act. Washington’s lobbying effort to weaken the EU’s digital rulebook comes amid a broader global push by the U.S. to weaken digital laws in foreign jurisdictions.  This month, South Korea caved to lobbying efforts by the Trump administration and walked back its own proposed digital competition regime.  The U.S. Trade Representative is preparing its 2026 report and launching another round of consultations in the coming weeks. Meanwhile, the Commission is trudging forward with an assessment of the rules under its “Digital Fairness Fitness Check” and the ongoing DMA review. But with Washington lobbing grenades and EU countries breaking ranks, the question isn’t just what the review says — it’s whether the DMA can survive the trade war.

BRUSSELS — The EU’s push for the U.S. to scrap its tariffs on steel and aluminum has opened the door to an old demand from Washington: Loosen your digital rulebook, and we’ll meet you halfway. Brussels raised its concerns over Washington’s expanded list of goods covered by high steel and aluminum tariffs at meetings on Monday between Trade Commissioner Maroš Šefčovič and EU trade ministers and, from the U.S. side, Secretary of Commerce Howard Lutnick and Trade Representative Jamieson Greer. The Commerce Department in August subjected over 400 products containing steel and aluminum to a 50 percent tariff — a list the EU feels is so broad it goes against the spirit of a framework trade deal struck in July. That trade deal, which President Donald Trump and European Commission President Ursula von der Leyen clinched at Trump’s Turnberry golf resort in Scotland, sets a baseline tariff of 15 percent on most EU imports to the U.S., while the EU committed to cutting most of its own tariffs to zero. At the time, the EU and the U.S. pledged to work together to reduce tariffs on steel and aluminum — but remained vague on the details. After the Europeans raised the steel tariffs on Monday, Lutnick responded by calling on the EU to “analyze their digital rules, trying to come away with a balance … not put them away, but find a balanced approach that works with us.” “And if they can come up with that balanced approach, which I think they can, then we will, together with them, handle the steel and aluminum issues and bring that on together,” he added. Lutnick’s remarks signal a departure from the previous U.S. position, which threatened to retaliate against the bloc’s digital laws, while advocating for light-touch artificial intelligence regulation.  Lutnick sold the loosening of the bloc’s digital rules as an “opportunity” for the EU, offering U.S. investment in return, mainly through data centers that could power artificial intelligence.   “If the European Union can find a way to have a balanced digital set of rules, I think the European Union can see $1 trillion of investment,” he said. PUSHING BACK — SORT OF In response, Šefčovič reiterated the bloc’s commitment to its regulatory autonomy and its belief that its rules are not — contrary to what Washington asserts — discriminatory.  The EU side, he added, “explained how our legislation is working, we explained that this is not discriminatory. It’s not aimed at American companies. And I think that we just simply need to do more of the explanation in that regard.”  A Commission official, speaking on condition of anonymity, was more direct: “Steel and digital are completely unrelated. Steel has always been part of the discussions with the U.S. and has been formalized in the joint statement. Our sovereign digital legislation is not up for negotiations.” The EU’s digital rules are a major concern for the Donald Trump administration, and U.S. Commerce Secretary Howard Lutnick raised the matter on a visit to Brussels. | Pool photo by Aaron Schwartz/EPA The EU executive has already moved to simplify its tech rules through a digital omnibus presented last week, an effort that the EU’s tech chief, Henna Virkkunen, raised with Lutnick and Greer at an earlier meeting that day. That omnibus brought major changes to the EU’s GDPR data protection regulation, and also proposed to pause the rollout of a key part of the EU’s Artificial Intelligence Act — a controversial move championed by U.S. Big Tech companies and lobby groups.  European lawmakers and civil society groups have expressed concerns in recent weeks that the Commission’s digital simplification push is meant to placate Washington, a claim the Commission has vehemently denied.   Lawmakers are due to discuss the digital simplification package with the Commission on Tuesday. Last week, the Commission also kicked off a process to review all of its tech rulebooks, which could lead to further simplification efforts.  STEEL TALKS  Washington’s earlier decision to widen the list of steel products facing the 50 percent tariff caused uproar in Brussels, with some European lawmakers arguing that the EU should refrain from lowering its own tariffs on steel until the issue is resolved. In a bid to cozy up to the White House, the EU side on Monday pushed the idea that Brussels and Washington should jointly face up to a common enemy — China — rather than dwelling on their differences.  Danish Foreign Minister Lars Løkke Rasmussen said the two sides had addressed “some of the challenges we are facing together,” such as “overcapacity” and “China’s role in the global economy.” Asked about joint work on overcapacity, Lutnick said such issues are “easy for us to work together, and those don’t take up a lot of time when we’re talking, because when everybody just agrees right away, it’s not very difficult.” Behind closed doors, however, the U.S. stressed to its European counterparts that cooperation on China didn’t mean they would simply give the EU a pass on steel and aluminum tariffs. Šefčovič said a team from Brussels would travel to Washington in the coming weeks to address these issues.

In a luxury Saudi hotel some 3,000 miles away from her economic woes, Britain’s Chancellor Rachel Reeves delivered a plucky pitch to some of the wealthiest people on the planet. “I believe that countries are successful when they are open and trading — I think that’s good for productivity because competition spurs productivity, growth,” she told business leaders at the Fortune Global Forum last month. “And in a small and open economy like Britain’s … we want our businesses to be able to access global markets.” With this in mind, the chancellor said, Britain was striking trade deals with the EU, the U.S., as well as fast-growing economies like India, as she teased “big opportunities” from an upcoming free trade agreement with Gulf countries. With a difficult budget looming, the chancellor has increasingly turned her gaze overseas in her elusive search for economic growth. And with the Office for Budget Responsibility expected to downgrade the U.K.’s productivity outlook before the budget, Reeves is urging the fiscal watchdog to positively “score” new trade deals according to how much growth they might deliver. But her efforts may be in vain. Far from being the magic bullet that will reinvigorate the economy, the benefits of trade deals may take years to materialize — and some government claims appear to be overstated, experts have told POLITICO. EU ‘RESET’ HOPES By the government’s estimation, its plans to “reset” its relationship with the European Union will add nearly £9 billion to the U.K. economy by 2040, equivalent to a GDP boost of 0.3 percent. Key elements include deals on agrifood, energy trading, and a youth mobility scheme.  Separate analysis by John Springford, an associate fellow at the Centre for European Reform in London, is more optimistic, predicting a GDP boost of between 0.3 and 0.7 percent over ten years as a result of the agreement. The biggest uplifts, he claims, would come from a youth mobility deal.  But negotiations on key elements of the deal have only just begun, and Springford admits details are still “a bit sketchy.” As a result, he says, it would be difficult for the OBR to accept Reeves’ ask to score these deals, which would also take a long time to play out. Even if the government’s estimates are met, he added, the deal will do little to reverse the overall damage caused by Brexit, which the OBR estimates will reduce the U.K.’s long-run productivity by 4 percent. “The damage caused by Brexit can never be significantly repaired without getting rid of one or all of the government’s ‘red lines’,” he continued, in reference to Labour’s refusal to rejoin the single market or customs union.  In recent months the chancellor has talked about the impact of Brexit on the economy, but has suggested this impact can be offset by the reset deal, as well as by trade deals with non-EU countries. “There is no doubting that the impact of Brexit is severe and long lasting,” she said in an interview with Sky News in October, “and that is why we are trying to do trade deals around the world, with the U.S., India, but most importantly with the EU, so that our exporters here in Britain have a chance to sell things made here all around the world.” Guests at the Fortune Global Forum 2025 Gala Dinner. | Cedric Ribeiro/Getty Images for Fortune Media But Ahmet Kaya, principal economist at the National Institute of Economic and Social Research, said the EU deal was “more symbolic than transformative.”  “It slightly eases checks on agri-food products, which should help certain sectors, but the macroeconomic effect is minimal considering that the government’s impact estimate is just £9 billion — which is cumulative gain over time — relative to the size of the £3.6 trillion economy.” INDIA FREE TRADE AGREEMENT Reeves will also be pinning her growth hopes on the U.K.’s recently completed free trade agreement with India, which the government predicts will boost U.K. GDP by 0.13 percent, worth £4.8 billion a year.  The deal will ultimately see India remove tariffs on up to 90 percent of U.K. exports and cut India’s average effective tariffs on U.K. goods from roughly 15 percent to 3 percent, with significant benefits for Britain’s automotive and Scotch whisky exports. But Sophie Hale, principal economist at the Resolution Foundation, said it could take 10 to 15 years for the full effects of the deal to be felt, partly because many tariff reductions will be introduced gradually and are subject to quotas. “Given the OBR is looking over a five-year window, we really aren’t going to expect a big impact,” she said. “Even if it was spread evenly, you’re maybe getting less than half of that by the end of the forecast, because it has to actually be implemented.” The deal is “definitely worth having,” Hale added. “But in terms of … OBR productivity growth forecasts or shifting the dial on U.K. growth, it’s pretty small and a lot of those impacts are going to be delayed.”  TARIFF TERRORS Reeves will also be hoping that the U.K.’s Economic Prosperity Deal with the U.S. — announced with much fanfare in May — will have gone some way in cushioning the impact of President Donald Trump’s punitive tariff regime. The deal saw the U.K. hit with 10 percent baseline tariffs on most goods, with reduced duties for automotives, steel and aluminum, and increased market access for agricultural exports.  While this gave Britain a comparative advantage over most other countries, it has still left the U.K. in a weaker trade position with the U.S. than a year ago. According to NIESR’s latest forecast, U.S. tariffs have reduced U.K. growth by around 0.1 percentage points this year and 0.2 percentage points next year.  “That’s a smaller drag than expected in March, reflecting the more moderate global spill-overs from tariffs, but the overall impact remains negative,” said Kaya. But even this remains uncertain. Like the EU deal agreed earlier this year, much of the EPD remains under negotiation, including pharmaceutical tariffs, which makes it difficult to “score” in terms of its economic impact. MAKING TRADE DEALS WORK Even when trade deals are fully agreed and implemented, their economic impacts are not guaranteed, and it is sometimes an uphill struggle to get businesses to actually make use of them.  “Trade deals have the potential to support economic growth, but their impact does not appear overnight and needs time and support to make it happen,” noted George Riddell, managing director of the Goyder trade consultancy.  “Businesses need to make connections with local customers, understand local regulatory requirements and establish partnerships to help with relevant legal, tax and customs procedures.” In the government’s trade strategy, published over the summer, the Department for Business and Trade committed to overhauling how it supports U.K. businesses and provides export advice through a “one-stop-shop.”  “While the new website is a substantial improvement on what was there before, more needs to be done to get businesses using it,” said Riddell.  Britain’s Chancellor of the Exchequer Rachel Reeves will be hoping that the U.K.’s Economic Prosperity Deal with the U.S. will have gone some way in cushioning the impact of President Donald Trump’s punitive tariff regime. | Pool photo by Jordan Pettitt/AFP via Getty Images Trade Minister Chris Bryant acknowledged this issue in a recent speech, telling businesses the estimates of the economic impact of trade deals could only be realized “if businesses are ambitious enough to exploit these opportunities.”  “It’s not just about signing free trade agreements,” he said at a pitching event for exporters earlier this month. “We can sign FTAs, we can do all that negotiating … But it’s exploiting those FTAs once they’ve been signed that is really important and will actually drive growth.” Looking back at the U.K.’s first post-Brexit trade deals, David Henig, director of the UK Trade Policy Project at the European Centre for International Political Economy think tank, says there is little sign of material impact. “There is currently no evidence that the new trade deals with Australia and New Zealand have affected the U.K. economy in any meaningful sense,” he said, adding there was “nothing that indicates any permanent increase in trade so far.” ‘BEATING THE FORECASTS’ As the budget approaches, Reeves’ growth ambitions look increasingly uncertain. The OBR has downgraded the U.K.’s productivity outlook, potentially increasing government borrowing by £14 billion and £20 billion. Just last week, figures from the Office for National Statistics show that U.K. GDP fell unexpectedly by 0.1 percent in September. Publicly, at least, the chancellor has remained upbeat. “My job as chancellor is to try and beat those forecasts,” she said last month, “and what we’re doing with those trade deals with India, the U.S. and the EU, the investments that we’ve secured, including from big tech companies in the U.K., shows that we have a huge amount to offer as a place to grow a business, to start and scale a business.  “We’ll continue to secure those investments in all parts of Britain, to create those good jobs, paying wages and to boost our productivity, which means that we will start to see those numbers coming through in economic growth and prosperity for working people.” James Fitzgerald contributed to this report.

President Donald Trump has yet to follow through on his threat to impose an additional 10 percent tariff on Canadian imports, four weeks after he halted “all trade negotiations” over an anti-tariff ad the province of Ontario ran during the Major League Baseball World Series. “Because of their serious misrepresentation of the facts, and hostile act, I am increasing the Tariff on Canada by 10% over and above what they are paying now,” Trump wrote on Truth Social on Oct. 25, after announcing two days earlier that he was terminating trade talks over the the ”egregious” ad. Trump’s announcement had Canadian exporters preparing for a worst-case scenario: a sweeping levy layered on top of existing double-digit duties, which would have been particularly painful for industries like autos, where components cross the border multiple times before reaching their final form. But to date, the Trump administration hasn’t sent any official documentation ordering U.S. Customs and Border Protection to enforce the new, higher duty, and U.S. importers have not received any new regulatory guidance. “We monitor the federal registry and follow executive order activity on a regular basis and haven’t seen any changes,” said Flavio Volpe, the president of Canada’s Automotive Parts Manufacturers’ Association, which controls over 90 percent of independent parts production in Canada. The White House did not say whether it still plans to impose the tariff when asked for comment. But a separate U.S. official suggested the Trump administration had opted to hold off on additional duties — which would have sent tariffs on Canadian goods to 45 percent — and instead continue to dangle the threat as the two sides gear up for future talks. “The Canadians know what’s on the table,” said the official, granted anonymity to discuss private conversations. Volpe said a personal intervention by Carney in Asia last month may have helped matters, too. “We understand that the prime minister spoke with the president directly about the ads, it may very well be that they settled the matter between them,” he said. Trump told reporters he had “a very nice” conversation with Carney while the two leaders were in Gyeongju, South Korea, in late October for the Asia-Pacific Economic Cooperation summit, and that Carney “apologized for what they did with the commercial.” Carney later confirmed the apology and said he had told Ontario Premier Doug Ford not to air the ad, in the first place. The spot, which the province spent about $53 million to air during the Toronto Blue Jays’ playoff run, stitched together portions of a 1987 Reagan radio address about the harms of tariffs — a move the Trump administration has seized on to argue the ad misrepresented the former president’s stance. “Canada was caught, red handed, putting up a fraudulent advertisement on Ronald Reagan’s Speech on Tariffs,” Trump complained in the Oct. 25 post. “Their Advertisement was to be taken down, IMMEDIATELY, but they let it run last night during the World Series, knowing that it was a FRAUD.” The Ontario government stopped airing the ad soon after. Speaking to Canadian business leaders in Ottawa on Wednesday, U.S. Ambassador to Canada Pete Hoekstra continued to blast the Ontario ad. “You do not come into America and start running political ads, government-funded political ads, and expect no consequences or reaction from the United States of America and the Trump administration,” Hoekstra said during remarks at the 2025 National Manufacturing Conference. Hoekstra said trade talks with Canada will restart eventually, but warned “it’s not going to be easy.” He did not mention the additional 10 percent tariff and whether it was still in the works. One Canadian official told POLITICO they have not received any documentation from the administration related to the additional tariff. The U.S. and Canada have a free trade agreement under a deal Trump negotiated during his first term. But the president still hiked tariffs on Canadian imports earlier this year, citing the country’s supposed role in the flow of fentanyl into the United States, and also hit the North American neighbor and other countries with double-digit duties on various sectors including steel, aluminum, autos and lumber. The administration, however, has exempted shipments that meet the terms of the United States-Mexico-Canada Agreement — the trade deal the president negotiated in his first term — which covers the vast majority of goods now being exported from Canada to the U.S. Carney and Trump projected optimism about the state of talks to lower those duties when the prime minister visited the White House in October. But administration officials have privately complained that Carney’s government is slow-walking the negotiations and refusing to make concessions. The White House has taken particular umbrage at Canadian efforts to secure exemptions from the U.S. steel and aluminum tariffs. Canada U.S. Trade Minister Dominic LeBlanc told reporters in Montreal last week he’s willing to go back to the negotiating table when Trump is ready, in order to get a deal that’s good for both Canadian and American workers. “We remain ready and willing to do that work, but we’re not going to wait around and look at our phones and turn up the notifications to make sure we don’t miss a ding because somebody sent us a text message at 9:30 at night,” LeBlanc said.

Businesses from Wall Street to main street are struggling to comply with President Donald Trump’s byzantine tariff regime, driving up costs and counteracting, for some, the benefits of the corporate tax cuts Republicans passed earlier this year. Trump has ripped up the U.S. tariff code over the past year, replacing a decades-old system that imposed the same tariffs on imports from all but a few countries with a vastly more complicated system of many different tariff rates depending on the origin of imported goods. To give an example, an industrial product that faced a mostly uniform 5 percent tariff rate in the past could now be taxed at 15 percent if it comes from the EU or Japan, 20 percent from Norway and many African countries, 24 to 25 percent from countries in Southeast Asia and upwards of 50 percent from India, Brazil or China. “This has been an exhausting year, I’d say, for most CEOs in the country,” said Gary Shapiro, CEO and vice chair of the Consumer Technology Association, an industry group whose 1,300 member companies include major brands like Amazon, Walmart and AMD, as well as many small businesses and startups. “The level of executive time that’s been put in this has been enormous. So instead of focusing on innovation, they’re focusing on how they deal with the tariffs.” Upping the pressure, the Justice Department has announced that it intends to make the prosecution of customs fraud one of its top priorities. The proliferation of trade regulations and threat of intensified enforcement has driven many companies to beef up their staff and spend what could add up to tens of millions of dollars to ensure they are not running afoul of Trump’s requirements. The time and expense involved, combined with the tens of billions of dollars in higher tariffs that companies are paying each month to import goods, amount to a massive burden that is weighing down industries traditionally reliant on imported products. And it’s denting, for some, the impact of the hundreds of billions of dollars of tax cuts that companies will receive over the next decade via the One Big Beautiful Bill Act championed by the White House. “Every CEO survey says this is their biggest issue,” said Shapiro. A recent survey by KPMG, a professional services firm, found 89 percent of CEOs said they expect tariffs to significantly impact their business’ performance and operations over the next three years, with 86 percent saying they expect to respond by increasing prices for their goods and services as needed. Maytee Pereira, managing director for customs and international trade at PriceWaterhouseCoopers, another professional services firm, has seen a similar trend. “Many of our clients have been spending easily 30 to 60 percent of their time having tariff conversations across the organization,” Pereira said. That’s forced CEOs to get involved in import-sourcing decisions to an unprecedented degree and intensified competition for personnel trained in customs matters. “There’s a real dearth of trade professionals,” Pereira said. “There isn’t a day that I don’t speak to a client who has lost people from their trade teams, because there is this renewed need for individuals with those resources, with those skill sets.” But the impact goes far beyond a strain on personnel into reducing the amount of money that companies are willing to spend on purchasing new capital equipment or making other investments to boost their long-term growth. “People are saying they can’t put money into R&D,” said one industry official, who was granted anonymity because of the risk of antagonizing the Trump administration. “They can’t put money into siting new factories in the United States. They don’t have the certainty they need to make decisions.” A White House spokesperson did not respond to a request for comment. However, the administration has previously defended tariffs as key to boosting domestic manufacturing, along with their overall economic agenda of tax cuts and reduced regulation. They’ve also touted commitments from companies and other countries for massive new investments in the U.S. in order to avoid tariffs, although they’ve acknowledged it will take time for the benefits to reach workers and consumers. “Look, I would have loved to be able to snap my fingers, have these facilities going. It takes time,” Treasury Secretary Scott Bessent said in an interview this week on Fox News. “I think 2026 is going to be a blockbuster year.” For some companies, however, any benefit they’ve received from Trump’s push to lower taxes and reduce regulations has been substantially eroded by the new burden of complying with his complicated tariff system, said a second industry official, who was also granted anonymity for the same reason. “It is incredibly complex,” that second industry official said. “And it keeps changing, too.” Matthew Aleshire, director of the Milken Institute’s Geo-Economics Initiative, said he did not know of any studies yet that estimate the overall cost, both in time and money, for American businesses to comply with Trump’s new trade regulations. But it appears substantial. “I think for some firms and investors, it may be on par with the challenges experienced in the early days of Covid. For others, maybe a little less so. And for others, it may be even more complex. But it’s absolutely eating up or taking a lot of time and bandwidth,” Aleshire said. The nonpartisan think tank’s new report, “Unintended Consequences: Trade and Supply Chain Leaders Respond to Recent Turmoil,” is the first in a new series exploring how companies are navigating the evolving trade landscape, he said. One of the main findings is that it has become very difficult for companies to make decisions, “given the high degree of uncertainty” around tariff policy, Aleshire said. Trump’s “reciprocal” tariffs — imposed on most countries under a 1977 emergency powers act that is now being challenged in court — start at a baseline level of 10 percent that applies to roughly 100 trading partners. He’s set higher rates, ranging from 15 to 41 percent, on nearly 100 others, including the 27-member European Union. Those duties stack on top of the longstanding U.S. “most-favored nation” tariffs. Two notable exceptions are the EU and Japan, which received special treatment in their deals with Trump. Companies also could get hit with a 40 percent penalty tariff if the Trump administration determines an item from a high-tariffed country has been illegally shipped through a third country — or assembled there — to obtain a lower tariff rate. However, businesses are still waiting for more details on how that so-called transshipment provision, which the Trump administration outlined in a summer executive order, will work. The president also has hit China, Canada and Mexico with a separate set of tariffs under the 1977 emergency law to pressure those countries to do more to stop shipments of fentanyl and precursor chemicals from entering the United States. Imports from Canada and Mexico are exempt from the fentanyl duties, however, if they comply with the terms of the U.S.-Mexico-Canada Agreement, a trade pact Trump brokered in his first term. That has spared most goods the U.S. imports from its North American neighbors, but also has forced many more companies to spend time filling out paperwork to document their compliance. Trump’s increasingly baroque tariff regime also includes the “national security” duties he has imposed on steel, aluminum, autos, auto parts, copper, lumber, furniture and heavy trucks under a separate trade law. But the administration has provided a partial exemption for the 25 percent tariffs he has imposed on autos and auto parts, and has struck deals with the EU, Japan and South Korea reducing the tariff on their autos to 15 percent. In contrast, Trump has taken a hard line against exemptions from his 50 percent tariffs on steel and aluminum, and recently expanded the duties to cover more than 400 “derivative” products, such as chemicals, plastics and furniture, that contain some amount of steel and aluminum or are shipped in steel and aluminum containers. And the administration is not stopping there, putting out a request in September for further items it can add to the steel and aluminum tariffs. “This is requiring companies that do not even produce steel and aluminum products to keep track of and report what might be in the products that they’re importing, and it’s just gotten incredibly complicated,” one of the industry officials granted anonymity said. That’s because companies need to precisely document the amount of steel or aluminum used in a product to qualify for a tariff rate below 50 percent. “Any wrong step, like any incorrect information, or even delay in providing the information, risks the 50 percent tariff value on the entire product, not just on the metal. So the consequence is really high if you don’t get it right,” the industry official said. The administration has also signaled plans to similarly expand tariffs for other products, such as copper. And the still unknown outcomes of ongoing trade investigations that could lead to additional tariffs on pharmaceuticals, semiconductors, critical minerals, commercial aircraft, polysilicon, unmanned aircraft systems, wind turbines, medical products and robotics and industrial machinery continue to make it difficult for many companies to plan for the future. Small business owners say they feel particularly overwhelmed trying to keep up with all the various tariff rules and rates. “We are no longer investing into product innovation, we’re not investing into new hires, we’re not investing into growth. We’re just spending our money trying to stay afloat through this,” said Cassie Abel, founder and CEO of Wild Rye, an Idaho company which sells outdoor clothing for women, during a virtual press conference with a coalition of other small business owners critical of the tariffs. Company employees have also “spent hundreds and hundreds and hundreds of hours counter-sourcing product, pausing production, restarting production, rushing production, running price analysis, cost analysis, shipping analysis,” Abel said. “I spent zero minutes on tariffs before this administration.” In one sign of the duress small businesses are facing, they have led the charge in the Supreme Court case challenging Trump’s use of the 1977 International Emergency Economic Powers Act to impose both the reciprocal and the fentanyl-related tariffs. Crutchfield Corp., a family-owned electronics retailer based in Charlottesville, Virginia, filed a “friend of the court” brief supporting the litigants in the case, in which the owners detailed its difficulties in coping with Trump’s erratic tariff actions. “If tariffs can be imposed, increased, decreased, suspended or altered … through the changing whim of a single person, then Crutchfield cannot plan for the short term, let alone the long run,” the company wrote in its brief, asking “the Court to quell the chaos.”