Andrea Carlo is a British-Italian researcher and journalist living in Rome. His
work has been published in various outlets, including TIME, Euronews and the
Independent.
Last month, UNESCO designated Italian cuisine part of the world’s “intangible
cultural heritage.”
This wasn’t the first time such an honor was bestowed upon food in some form —
French haute cuisine and Korean kimchi fermentation, among others, have been
similarly recognized. But it was the first time a nation’s cuisine in its
entirety made the list.
So, as the U.N. agency acknowledged the country’s “biocultural diversity” and
its “blend of culinary traditions […] associated with the use of raw materials
and artisanal food preparation techniques,” Italian Prime Minister Giorgia
Meloni reacted with expected pride.
This is “a victory for Italy,” she said.
And prestige aside — Italy already tops UNESCO’s list of World Heritage Sites —
it isn’t hard to see the potential benefits this designation might entail. One
study even suggests the UNESCO nod alone could boost Italian tourism by up to 8
percent. But behind this evident soft power win also lies a political agenda,
which has turned “Italian cuisine” into a powerful weapon for the country’s
right-wing government.
For Meloni’s government, food is all the rage. It permeates every aspect of
political life. From promoting “Made in Italy” products to blocking EU nutrition
labelling scores and banning lab-grown meat, Rome has been doing its utmost to
regulate what’s on Italian plates. In fact, during Gaza protests in Rome in
September, Meloni was sat in front of the Colosseum for a “Sunday lunch” as part
of her government’s long-running campaign to make the coveted list.
Clearly, the prime minister has made Italian cuisine one of the main courses of
her political menu. And all of this can be pinpointed to a phenomenon political
scientists call “gastronationalism,” whereby food and its production are used to
fuel identitarian narratives — a trend the Italian far right has latched onto
with particular gusto.
There are two main principles involving Italian gastronationalism: The notion
that the country’s culinary traditions must be protected from “foreign
contamination,” and that its recipes must be enshrined to prevent any
“tinkering.” And the effects of this gastronationalism now stretch from
political realm all the way to the world of social media “rage-bait,” with a
deluge of TikTok and Instagram content lambasting “culinary sins” like adding
cream to carbonara or putting pineapple on pizza.
At the crux of this gastronationalism, though, lies the willful disregard of two
fundamental truths: First, foreign influence has contributed mightily to what
Italian cuisine is today; and second, what is considered to be “Italian cuisine”
is neither as old nor as set in stone as gastronationalists would like to admit.
Europe, as a continent, is historically poor in its selection of indigenous
produce — and Italy is no exception. The remarkable variety of the country’s
cuisine isn’t due to some geographic anomaly, rather, it is the byproduct of
centuries of foreign influence combined with a largely favorable climate: Citrus
fruits imported by Arab settlers in the Middle Ages, basil from the Indian
subcontinent through ancient Greek trading routes, pasta-making traditions from
East Asia, and tomatoes from the Americas.
Lying at the crossroads of the Mediterranean and home to major trading outposts,
Italy was a sponge for cultural cross-pollination, which enriched its culinary
heritage. To speak of the “purity” of Italian food is inherently ahistorical.
This wasn’t the first time such an honor was bestowed upon food in some form —
French haute cuisine and Korean kimchi fermentation, among others, have been
similarly recognized. | Anthony Wallace/AFP via Getty Images
But even more controversial is acknowledging that the concept of “Italian
cuisine” is a relatively recent construct — one largely borne from post-World
War II efforts to both unite a culturally and politically fragmented country,
and to market its international appeal.
From north to south, not only is Italy’s cuisine remarkably diverse, but most of
its iconic dishes today would have been alien to those living hardly a century
ago. Back then, Italy was an agrarian society that largely fed itself with
legume-rich foods. Take my great-grandmother from Lake Como — raised on a diet
of polenta and lake fish — who had never heard of pizza prior to the 1960s.
“The mythology [of gastronationalism] has made complex recipes — recipes which
would have bewildered our grandmothers — into an exercise of national
pride-building,” said Laura Leuzzi, an Italian historian at Glasgow’s Robert
Gordon University. Food historian Alberto Grandi took that argument a step
forward, titling his latest book — released to much furor — “Italian cuisine
does not exist.”
From carbonara to tiramisù, many beloved Italian classics are relatively recent
creations, not much older than the culinary “blasphemies” from across the pond,
like chicken parmesan or Hawaiian pizza. Even more surprising is the extent of
U.S. influence on contemporary Italian food itself. Pizza, for instance, only
earned its red stripes when American pizza-makers began adding tomato sauce to
the dough, in turn influencing pizzaioli back in Italy.
And yet, some Italian politicians, like Minister of Agriculture Francesco
Lollobrigida, have called for investigations into brands promoting supposedly
misleadingly “Italian sounding” products, such as carbonara sauces using
“inauthentic” ingredients like pancetta. Lollobrigida would do well to revisit
the original written recipe of carbonara, published in a 1954 cookbook, which
actually called for the use of pancetta and Gruyère cheese — quite unlike its
current pecorino, guanciale and egg yolk-based sauce.
Simply put, Italian cuisine wasn’t just exported by the diaspora — it is also
the product of the diaspora.
One study even suggests the UNESCO nod alone could boost Italian tourism by up
to 8 percent. | Michael Nguyen/NurPhoto via Getty Images
What makes it so rich and beloved is that it has continued to evolve through
time and place, becoming a source of intergenerational cohesion, as noted by
UNESCO. Static “sacredness” is fundamentally antithetical to a cuisine that’s
constantly reinventing itself, both at home and abroad.
The profound ignorance underpinning Italian gastronationalism could be
considered almost comedic if it weren’t so perfidious — a seemingly innocuous
tool in a broader arsenal of weaponry, deployed to score cheap political points.
Most crucially, it appeals directly to emotion in a country where food has been
unwittingly dragged into a culture war.
“They’re coming for nonna’s lasagna” content regularly makes the rounds on
Facebook, inflaming millions against minorities, foreigners, vegans, the left
and more. And the real kicker? Every nonna makes her lasagna differently.
Hopefully, UNESCO’s recognition can serve as a moment of reflection in a country
where food has increasingly been turned into a source of division. Italian
cuisine certainly merits recognition and faces genuine threats — the impact of
organized crime and the effects of climate change on crop growth biggest among
them. But it shouldn’t become an unwitting participant in an ideological agenda
that runs counter to its very spirit.
For now, perhaps it’s best if our government kept politics off the dinner table.
Tag - agriculture and food
Faced with an ageing population and rising chronic disease rates, Europe wants
to make its citizens healthier.
It also needs to keep its most powerful industries happy. In the basket of
health policies that EU lawmakers rushed to get across the line before
Christmas, industry was the big winner: The pharmaceutical, food and drink
sectors walked away with a set of major policy wins — and (potentially)
healthier profits.
While the pharma industry previously feared losing some of its monopoly rights
on new drugs, the Commission this month offered it an extra year of patent
protection for novel biotech drugs — among the most expensive treatments in the
world. The food and drink sectors, meanwhile, successfully pushed back against
proposals to tax ultra-processed foods and alcopops, for now.
On Dec. 16 the Commission published its Biotech Act and Safe Hearts Plan, which
landed just days after a long-awaited update of the pharmaceutical legislation.
Taken together, they seek to incentivize industries to innovate and do business
in Europe, improve access to medicines, and tackle the burden of cardiovascular
disease.
The pharma industry broadly celebrated the biotech proposal.
The Biotech Act “reflects priorities we’ve intensively advocated to keep Europe
globally competitive in life sciences,” Ognjenka Manojlovic, head of policy at
European pharmaceutical company Sanofi, told POLITICO. That includes
accelerating clinical trials, boosting intellectual property, and strengthening
financing for Europe’s biotech ecosystem, Manojlovic said.
The pharmaceutical sector had pushed for longer monopoly rights in the pharma
legislation. In the end they were kept at the current standard eight years —
instead of being cut by two years as the European Commission had initially
proposed.
For Europe’s public health insurers, who pay for drugs, the decisions taken to
maintain and then extend market protections for medicines are hard to square.
“We are puzzled by the Commission’s intentions,” said Yannis Natsis, director of
the European Social Insurance Platform, a network of Europe’s social insurance
organizations, warning that taxpayers will have to pick up the bill.
Meanwhile, health campaigners are also unhappy at the Commission’s “missed
opportunity” to tackle obesity and heart disease with junk food taxes — as
proposed in an earlier draft of the Safe Hearts Plan.
Samuele Tonello, at consumer organization BEUC, said the Safe Hearts Plan “lacks
teeth” to better protect consumers from unhealthy foods, and flagged the
“urgency of [cardiovascular diseases].”
A MAN ON A MISSION
Health Commissioner Olivér Várhelyi has made no secret of his support for
industry, and has championed the Commission’s competitiveness mantra since
taking office in late 2024.
Health Commissioner Olivér Várhelyi has made no secret of his support for
industry, and has championed the Commission’s competitiveness mantra since
taking office in late 2024. | Thierry Monasse/Getty Images
The standout feature of his end-of-year bonanza was the 12-month patent
extension in the Biotech Act I — legislation that was split in two late in the
day, allowing Várhelyi to meet his end-of-year deadline for the pharma
component.
The proposal came just a week after the Commission, countries and MEPs clinched
a deal to reform Europe’s pharmaceutical laws, in which IP rights were among the
last issues to be settled.
Updates to the pharma laws were a legacy of the last Commission, whereas the
Biotech Act became something of a personal mission for Várhelyi.
He repeatedly stressed that there was “no time to lose” in delivering a targeted
policy aimed at revitalizing Europe’s flagging biotech industry, which risks
being overtaken by competition from China and the U.S. Few commissioners are
more vocal than Várhelyi about the premium they place on the competitiveness of
European industry.
Industry insiders had heard whispers of his plans to expand IP incentives for
the biotech sector, even if Council representatives were dismayed not to have
been informed in advance — especially with the ink barely dry on the Pharma
Package.
That’s not to say pharma is happy with its lot. Industry lobby group the
European Federation of Pharmaceutical Industries and Associations (EFPIA)
tempered its praise of the Biotech Act, lamenting that the extra year of
monopoly rights would only apply to a “limited subset of products.”
The extra year of protection is tied to the Commission’s efforts to locate more
pharma research and manufacturing in Europe. It would apply only to new
products, tested and at least partially made in Europe.
But the generics sector, which makes cheaper, off-patent drugs to compete with
branded medicines, sees the Biotech Act as a further sweetening of what is
already one of the world’s most generous IP systems. Lobby group Medicines for
Europe claims each year of delayed competition for the top three biologic drugs
would cost countries €7.7 billion.
Longer IP “will have a dramatic impact on healthcare budgets and delayed
patients’ access to essential medicines,” said Adrian van den Hoven, head of the
lobby.
These kinds of estimates would normally be included in an impact assessment
published alongside the proposal, but in its haste to get the Biotech Act out
the Commission didn’t do one.
POLITICO asked the Commission for an estimate of what the extra year of patent
protection would cost. A Commission spokesperson would not give a figure but
said they had used the impact assessment for the pharma legislation as a
reference.
“It is also important to stress that the number of products eligible for an
additional year of SPC will be limited to only those that are truly innovative
and tested and manufactured in the EU. The approach is deliberately targeted to
incentivise genuinely innovative therapies that deliver a clear added value for
patients and support European innovation,” the spokesperson said.
LUCKY ESCAPE FOR UPFS
The big food and drink sectors are on shakier ground with Várhelyi. The
commissioner has repeatedly made known his distaste for ultra-processed food,
and an early leaked version of the Safe Hearts Plan included new taxes on
unhealthy highly processed foods and alcopops.
But the final proposal showed the Commission had undertaken a significant
climbdown. Concrete targets to tax unhealthy food and drink in 2026 were gone,
replaced with a much woollier commitment to “work towards” such a levy. Alcopops
were excluded altogether.
Industry lobby FoodDrinkEurope took a far more measured tone on the final plan
than its explosive reactions to the earlier leaks, but that may well ramp up
again if and when health tax proposals emerge. The text suggests the soft drinks
industry may be the Commission’s first target if it does decide to pursue new
levies, while UPFs remain in Várhelyi’s sights.
“In the next couple of years, we will need to tackle the issue of
ultra-processed food much more,” he told MEPs in December.
For now, though, the plan seems to have let industry off easy. Health NGOs saw
it as a disappointment, given its lack of hard-hitting policies to reduce
consumption of UPFs and other unhealthy products.
While the pharma legislation is all wrapped up, the Biotech Act still needs to
win the approval of EU countries and the European Parliament.
For the food and pharma sectors, the proposals set out this month are
confirmation they have allies in the Berlaymont.
BRUSSELS — When cocoa farmer Leticia Yankey came to Brussels last October, she
had a simple message for the EU: Think about the mess your simplification agenda
is creating for companies and communities.
It was just weeks after the European Commission said it might delay the EU’s
anti-deforestation law, which requires companies to prove the goods they import
into the region are not produced on deforested land, for the second time.
But in Yankey’s Ghana, cocoa farmers were ready for the rules, known as the EU
Deforestation Regulation or EUDR, to kick in. “How are we going to be taken
serious the next time we move to our communities, our farmers, and even the
[Licensed Buying Companies] to tell them that EUDR is … coming back?”
Yankey asked.
Since then, the Commission has kept making changes to the plan. First by
floating the delay, then backtracking but proposing tweaks to the law — only for
EU governments and lawmakers to reinstate the postponement,
pile on additional carve-outs and then leave open the door for further
changes in the spring. All within three months.
It’s not just smaller companies and remote communities that are rankled by the
EU’s will-they-won’t-they approach to lawmaking.
Bart Vandewaetere, a VP for government relations and ESG engagement at Nestlé,
says that when he reports on European legislative developments to the company
board, they “[look] a little bit at me like: ‘Okay, what’s next? Will
you come next week with something else, or do we need to implement it this
way, or we wait?’”
Since the start of Ursula von der Leyen’s second term as European Commission
President, the EU has been rolling back dozens of rules in a bid to make it
easier for businesses to make money and create jobs.
Encouraged by EU leaders to hack back regulations quickly and without fuss, the
Commission presented 10 simplification packages last year — on top of its
plan to loosen the anti-deforestation law — to water down rules in the
agricultural, environment, tech, defense and automotive sectors as well as
on access to EU funding.
COMPLICATION AGENDA
Brussels says it is answering the wishes of business for less paperwork and
fewer legislative constraints, which companies claim prevent them from competing
with their U.S. and Chinese rivals. It also promises billions in savings as a
result.
“We will accelerate the work, as a matter of utmost priority, on all proposals
with a simplification and competitiveness dimension,” the EU
institutions wrote this month in a joint declaration of priorities for the year
ahead.
The ones who got ready to implement the laws already even go as far as to say
the EU is losing one of its key appeals: being a regulatory powerhouse with
policies that encourage companies to transition towards more sustainable
business models. | Nicolas Economou/NurPhoto via Getty Images
But for many businesses, the frequent introduction, pausing and rewriting of EU
rules is, just making life more complicated.
“What we constantly hear from clients is that regulatory uncertainty makes it
difficult to plan ahead,” said Thomas Delille, a partner at global law firm
Squire Patton Boggs, even though they generally support the simplification
agenda.
The ones who got ready to implement the laws already even go as far as to say
the EU is losing one of its key appeals: being a regulatory powerhouse with
policies that encourage companies to transition towards more sustainable
business models.
“The European Union unfortunately has lost some trust in the boardrooms by
making simplifications that are maybe undermining predictability,” said Nestlé’s
Vandewaetere.
The risk is that the EU will shoot itself in the foot by making it harder for
companies to invest in the region, which is essential for competitiveness.
“This approach rewards the laggards,” said Tsvetelina Kuzmanova, senior project
manager as the Cambridge Institute for Sustainability Leadership, adding that it
“lowers expectations at the very moment when companies need clarity and policy
stability to invest.”
INEVITABLE TURBULENCE
Many of Europe’s decision-makers are convinced that undoing business rules is a
necessary step in boosting economic growth.
The simplification measures “were needed and they are needed,” said Danish
Environment Minister Magnus Heunicke, confirming that he believes the EU
regulatory environment is clearer now for businesses than it was a
year ago. Denmark, which held the rotating presidency of the Council of the EU
for the last six months, had led much of the negotiations on the simplification
packages, or “omnibuses” in Brussels parlance.
Brussels is also receiving as many calls from businesses to speed up its
deregulation drive as those urging caution.
For example, European agriculture and food chain lobbies like Copa-Cogeca and
FoodDrink Europe said in a joint appeal that the EU should “address the
regulatory, administrative, legal, practical and reporting burdens that
agri-food operators are facing.” These, they added, are major obstacles to
investing in sustainability and productivity. Successive omnibus packages
should, meanwhile, be “proposed whenever necessary.”
But undoing laws requires as much work and time as drafting them. Over the past
year, lawmakers and EU governments have been enthralled in deeply political
negotiations over these packages. Entire teams of diplomats, elected officials,
assistants, translators and legal experts have been mobilized to argue over
technical detail that many were engaged in drafting just a couple of years
earlier.
Of the 10 omnibus proposals, three have already been finalized. The EU has also
paused the implementation of the rules it’s currently reviewing so that
companies don’t have to comply while the process is ongoing.
“If you look at this from an industry perspective, there will be some turbulence
before there is simplification, it’s inevitable,” said Gerard McElwee,
another partner at Squire Patton Boggs.
Ironically, the EU has also faced criticism for making cuts too quickly —
particularly to rules on environmental protection — and without properly
studying the effect they would have on Europe’s economy and communities.
Yankey, the cocoa farmer, said she understands the Commission’s quandary. “They
just want to listen to both sides,” she said. “Somebody is ready, somebody is
not ready.” But her community will need more EU support to help understand and
adapt to legislative tweaks that impact them.
The constant changes do not “help us to build confidence in the rules or the
game that we are playing,” she said.
BRUSSELS — The European Commission has unconditionally approved Mars’ $36
billion acquisition of Kellanova following an in-depth review of the
transaction.
The Commission said it had concluded that the deal — which combines Mars’
confectionery and pet food brands with Kellanova’s snacks and cereals — would
not significantly increase the merged entity’s bargaining power vis-à-vis
retailers.
The EU executive referred the deal, which was originally announced in Aug. 2024,
for an in-depth review in June.
“We looked very carefully at this deal to make sure that Mars would not gain
extra power over retailers,” said Teresa Ribera, the executive vice president of
the Commission responsible for competition. “Our review found no evidence that
this risk exists.”
The Commission’s probe focused on whether the expanded portfolio would allow
Mars to extract higher prices from supermarkets by leveraging a so-called
“basket effect” — but determined that there was insufficient evidence to support
this theory.
Following its review, the Commission determined that, because products like
Pringles and chocolate bars are typically “impulsive and infrequent purchases,”
consumers are unlikely to change supermarkets based on their availability.
Paul McCartney has joined forces with U.K. MPs who are urging Brussels to scrap
any plans to ban the use of meat-related names such as “burger” and
“sausage” for plant-based products.
The proposed EU ban, if passed into law, would prohibit food producers from
using designations such as “veggie burger” or “vegan sausage” for plant-based
and lab-grown dishes.
“To stipulate that burgers and sausages are ‘plant-based,’ ‘vegetarian’ or
‘vegan’ should be enough for sensible people to understand what they are
eating,” the former Beatles star, who became a vegetarian in 1975, told The
Times of London. “This also encourages attitudes essential to our health and
that of the planet.”
The proposed EU ban “could increase confusion” and “undermine economic growth,
sustainability goals, and the EU’s own simplification agenda,” eight British
MPs, including Jeremy Corbyn, wrote in a letter to Brussels.
The Times reported the contents of the letter Saturday evening. The missive
includes the support of the McCartney family, which owns a business selling
vegetarian food and recipes.
The looming ban stems from an amendment that French center-right MEP Céline
Imart introduced into legislation that aims to reform EU farming rules. These
proposed reforms include how farmers sign contracts with buyers alongside other
technical provisions.
The bill is now subject to legislative negotiations with the Council of the EU,
which represents EU governments.
The proposed rules will become law if and when MEPs and the Council agree on a
final version of the legislation to become EU law. MPs in the U.K. fear that the
ban, if it survives, would also impact British supermarkets, as markets and
companies across the continent are so closely intertwined.
Imart’s burger-busting tweaks were supposed to be a gesture of respect toward
the French farmers that she represents — but they have divided MEPs within her
own European People’s Party.
“A steak is not just a shape,” Imart told POLITICO in an interview last month.
“People have eaten meat since the Neolithic. These names carry heritage. They
belong to farmers.”
Limiting labels for vegetarian producers will also help shoppers understand the
difference between a real burger and a plant-based patty, according to Imart,
despite years of EU surveys showing consumers largely understand the difference.
U.K. MPs also cite research in their letter, stating that European shoppers
“overwhelmingly understand and support current naming conventions” such as
“veggie burger.”
President Donald Trump has changed his position on more than a few things over
the years, but in at least one area he’s been consistent: tariffs. The president
is a tariff man, as he’s fond of saying. And the man behind the man in this
instance is U.S. Trade Representative Jamieson Greer.
A longtime trade lawyer who served in the first Trump administration, Greer is
now working to help revamp the global trading system at the president’s behest —
and he rejects the widespread criticism that Trump’s sweeping tariff regime has
been rolled out haphazardly.
“Yes, there’s a strategy,” Greer said in a new interview with The Conversation.
“First of all, you don’t change 70 years of trade policy overnight. And second
of all, when some people say, ‘Oh, well, this is chaos. What’s your strategy?’,
what they really want to know is can we go back to how it was before? And that’s
not going to happen.”
Much of the president’s tariff agenda is currently at risk amid a seemingly
skeptical Supreme Court, though Greer professed confidence and said the White
House had backup options if need be.
Perhaps most worrisome for the administration is the politics of higher prices,
and Greer was eager to bat down charges that tariffs were to blame.
“People are worried about housing, they’re worried about healthcare — things we
don’t import,” he said.
This conversation has been edited for length and clarity.
You have probably the most important portfolio of this administration given just
how big of a priority trade has been for the president. I was at many a Trump
rally when he talked about how “tariff” is his favorite word, now his fifth
favorite word, “God, love, wife,” something else.
Yeah, he had to moderate a little bit on that.
You are a veteran trade lawyer. You served in Trump’s first term as chief of
staff to then-U.S. Trade Representative Robert Lighthizer. What is different
about the approach this time around?
In the first Trump administration, we were charting new waters, right? We were
coming into the so-called Washington consensus that tariffs were bad and we
shouldn’t protect domestic industry and we shouldn’t try to make tough deals
with our friends and foe alike.
Now having laid the groundwork in the first term, showing we could use tariffs
effectively while having a booming economy, the president was able to move to
his true vision, which he’s had for many years, which is to protect the American
economy with tariffs, use them as leverage where needed to get foreign market
access, and otherwise use them for geopolitical issues.
So where we were walking in the first term, now we can run and fly, frankly.
One of the narratives around the tariffs is that the strategy is chaos, that
this has been really unpredictable. I’ve heard from businesses that it’s been a
challenge because they’re just not sure where all of this is going to land, plus
you have all of the legal cases on top of that. So is the strategy chaos? Is
there a strategy?
So yes, there’s a strategy. First of all, you don’t change 70 years of trade
policy overnight. And second of all, when some people say, “Oh, well, this is
chaos. What’s your strategy?”, what they really want to know is can we go back
to how it was before? And that’s not going to happen. A lot of people focus on
April 2 Liberation Day. We announced potentially very, very high tariffs. But I
would focus people more on Aug. 1, and I use that date because that is the date
where the president really set the tariff rates, and where we announced a bunch
of deals. And from there, the structure that has played out demonstrates the
strategy that we have.
If you look at the tariff setup in the world that’s come out of the president’s
program, the highest tariffs are on China. Again, not because we bear China any
ill will, but because we have a giant trade deficit with them and they have a
lot of unfair trading practices. The next set of highest tariffs is Southeast
Asia, India, these other areas that use a lot of Chinese content, Southeast Asia
in particular, and we have giant trade deficits with them, Vietnam, for example.
And then the next highest tariff rates, and these are usually about 15 percent,
folks who are allies but with whom we have big trade issues: Korea, Japan,
Europe, etc. And then the lowest tariff rates are really in the Western
Hemisphere, where we want our supply chains to be, where it’s very secure. So
you can really see almost like concentric rings going out from China, what the
tariff rates are like. We have a couple outliers right now. India has a higher
tariff for some geopolitical reasons. They buy Russian oil. Brazil has some
higher tariffs.
Economy & Education: U.S. trade rep. Greer and teacher’s union head Weingarten |
The ConversationSharePlay Video
We were close to a deal there over the summer and it got derailed. What happened
there?
The president wants deals but he only wants good deals. And so whenever you
present a deal to the president, the question is, am I better off with just
having the tariff? And the assessment of the deal in the summer with India was,
well, I think we’re just better off with the tariff than with the potential
deal. But that has not stopped us from continuing conversations. It’s still
going quite well, I would say, with the Indians. There’s a separate issue where
they were buying Russian oil. They’ve stopped doing that largely now. So I think
we could see some tariff modification at some point for them. But I’m confident
that we’ll get a deal with India at some point in the future, maybe the near
future. It’ll be up to the president and Prime Minister Modi.
Have you been involved at all in talking about a potential future trading
partnership with Russia after the end of the war?
Not very much. Even before the war, we didn’t have a huge trading relationship
with Russia. We would get oil and steel and some fertilizer from them. We’d ship
them cars and some ag products. So it was never a giant trading relationship. If
the war ends then obviously there may be opportunity there. But we’re really
focused on big export markets.
There’s been a ton of debate about the short, medium and long term impact of
these tariffs. The Organization for Economic Cooperation and Development just
released a report saying the world economy has been surprisingly resilient in
the face of Trump’s trade wars, but they added that they expect higher tariffs
to gradually result in higher prices and reduce growth in household consumption
and business investment. How do you respond to that assessment and are you
worried about some economic pain in the short term?
I just look at the data, right? They’re saying we think it’ll lead to lower
growth in the future or higher prices or something, but they’ve been saying that
for a long time. And the data show that last quarter was 3.8 percent [annual]
growth. The Atlanta Fed is projecting 4.2 percent growth next year. We’ve seen
inflation in check. We’ve seen imported goods remain relatively low-priced.
Where we see prices high are things like housing and health care, because
Obamacare is a disaster.
The Supreme Court is weighing whether to narrow the president’s use of the
International Emergency Economic Powers Act — IEEPA — which is the 1970s-era law
that the administration has cited for imposing many of these tariffs. How are
you preparing for the possibility that one of these main tariff authorities
you’ve been using could be constrained?
First of all, we believe the law and the facts are on our side. This Supreme
Court has talked about how important it is to simply analyze the plain text of
the law. And if you look at the plain text, it says the president, if he
determines there’s an emergency, he can regulate imports. And he’s determined
there’s an emergency and he’s regulating imports, which is the tariff.
Now, we’ve been thinking about this plan for five years or longer. Since the
first term. So you can be sure that when we came to the president at the
beginning of the term, we had a lot of different options. IEEPA is the most
appropriate because there is an emergency with the trade deficit and the loss of
manufacturing, and it has the flexibility that you need to respond to the type
of emergency that there is.
My message is tariffs are going to be a part of the policy landscape going
forward. Are there other ways to do it? Courts during this process have actually
cited those different tools. And while we certainly can use those, IEEPA is the
best tool. It fits the situation, and we’re looking forward to hearing back from
the Supreme Court soon.
But you’re prepared for alternative measures if they do decide to constrain
IEEPA?
Well, I’m not going to go into too much detail about that, or else I’ll get in
trouble with my general counsel.
But you’ve got something in your back pocket.
Of course.
Regardless of how the Supreme Court rules on this, the administration’s
reciprocal tariffs could be reversed by a future president. Is there any plan to
go to Congress to try to codify any of this stuff?
Well, if I were Congress, I would codify it. I have heard from a handful of
members of Congress from all over the ideological spectrum, whether left or
right or progressive or conservative, free trader or protectionist — however you
want to characterize it. I’ve heard a lot of interest in this and for a lot of
reasons.
People have seen what I just described, which is that you can implement tariffs
and have growth at the same time. You can protect your supply chains and have
wages increase. You can do all of these things together, especially if you
couple it with good energy policy, etc. I’ve also had members of Congress come
to me, people who maybe weren’t fans of tariffs two years ago, and they said,
“This is actually real money that’s coming in that can be used to pay down the
debt or pay for other things or finance our reindustrialization.”
Who are those members?
Well, I won’t betray their confidences.
You said that some members are telling you, “Hey, I’ve changed my mind on
tariffs.” There are other members that have spoken privately or publicly, saying
“These tariffs are hurting my constituents,” particularly people in farm states.
I’m thinking GOP Sens. Chuck Grassley and Rand Paul and a number of folks that
have come out and said they’re concerned. What do you say to members of Congress
who feel that this is not beneficial for their folks?
Well Sen. Paul is a little bit of a man on an island on this issue.
Well sure, but Rep. Don Bacon —
He [Paul] compared me to a Soviet commissar in some comments.
All right, we’ll leave Rand Paul on the side here, but there are others like
Bacon and Grassley and other folks that have voiced some concerns.
I’ve talked to Sen. Grassley a lot, and he knows a lot about trade. He’s been
around a long time and as a general matter, it sounds to me frequently that he
is quite aligned with the president in terms of wanting to get foreign market
access, particularly for his folks who are trying to sell pork and soybeans
overseas. We have made sure, in addition to securing soybean purchases from
China, who’s a big customer, to open markets in Southeast Asia in particular for
soybeans. Markets that were never open before. Now these countries are taking
down their tariff, they’re taking down their non-tariff barriers. And so on
that, I think we’re aligned.
There’s always concern when you’re changing what’s a 70-year trade policy to
something new, and there can be frictions. But we are careful to listen to these
folks again, from both sides of the aisle, find out what their concerns are and
respond to them.
The president did exempt some agricultural imports from tariffs amid ongoing
concerns about higher prices. Why didn’t he do that from the beginning? How did
that shift come about?
First of all, inflation’s been in check. So let’s just clear the air on that.
Secondly, in early September, the president signaled, he put out an executive
order, and we made a list of all the — whether it’s agricultural goods or
minerals or things that physically can’t be grown in the United States or
extracted from the United States. The rocks aren’t here, or you can’t grow a
banana here, on any scale. So in early September, he put out an executive order.
He said, as I do deals with countries, I will release tariffs on these items.
Why? Because we get them from those countries.
There seems to be a real resistance in the language around tariffs to say that
tariffs are causing higher prices. Nobody wants to really say that. But in
making the exemptions, aren’t you basically acknowledging that tariffs do lead
to higher prices on products?
No.
Okay. Can you explain?
There’s never really a 1-to-1 with a tariff. In the first term, when we put
tariffs on China, inflation actually went down. As we were putting tariffs in
place, inflation went down. We’ve seen a similar effect here. When the president
says, “We’re going to have deals with you folks,” you have to have leverage,
right? And so you keep tariffs on folks for all kinds of things and it becomes a
carrot. So it’s a lot easier for me to go to Ecuador or Indonesia or Vietnam and
say, “Listen, if you do a deal with us and we’ve announced frameworks or full
agreements with all these countries I just mentioned, then at a given time, we
will release these things because obviously we don’t make them.”
When you have a tariff, it doesn’t necessarily go through to the consumer. I
don’t want to get too technical here for you, except I’m kind of nerdy about it.
But sometimes does it?
I mean it can, right?
Like on those things that you mentioned, like coffee and bananas and all of that
stuff?
It depends on what the production economy is like. And when I say production
economy, say bananas, if you have a hundred banana producers overseas, they’re
all going to compete for market share in the U.S. because we’re the biggest
consumer of a lot of these things. And so they will compete to eat the tariff.
Do you see what I’m saying?
I do, but when voters who don’t understand this are going to the grocery store
and seeing that prices haven’t gone down, how do you tackle that with all the
leverage that you’re talking about?
Well, I can’t control the weather in Brazil with a tariff. Coffee prices, for
example, have been going up for two years. Before there was ever a tariff on
coffee for six months or whatever we had. And there are secular pricing trends
in coffee and cocoa that were going on well before. And beef, these kinds of
things.
All that being said, we don’t have to have a tariff on these things. We don’t
make them here. We can have a tariff on them for leverage, which is how the
president used them. It’s how he said he was going to use it. He signaled in
September, these are for leverage to finish the deals. So we were well placed
two months later once we announced the rest of our deals to take the tariff off.
The US-Mexico-Canada agreement — USMCA — that Trump negotiated in his first term
is facing a mandatory review next year. What are the top changes that the
administration is looking to make?
When you think about the U.S., Canada, Mexico agreement, there are a few things
we trade among us in a massive way. One of them is automobiles, another’s
agriculture, another is energy. With respect to the auto trade, the goal is to
make more autos in the United States of America. Mexico has been a huge
beneficiary of NAFTA and then of USMCA. And so the president, earlier in his
second term, imposed tariffs on autos globally, including on Mexico. So there’s
an overlap between those tariffs and our agreement and USMCA. And those tariffs,
which are about 25 percent, are layered over USMCA.
Now all of that being said, we can look at the underlying rules of USMCA. If
something comes in and gets special duty treatment or a lower tariff, there’s
usually a rule of origin associated with it that says a certain amount of this
widget has to come from the region. Otherwise you have to pay a higher tariff.
We can change some of those rules to make them tighter, to have a higher
percentage have to come from the United States. Those are the kinds of things we
can do. There’s also a bunch of stuff in Mexico and Canada where maybe they
discriminate against our companies. It could be telecom companies or it could be
our corn exports. There are a variety of little things like that that may seem
small and don’t lend themselves to sound bites, but they mean a lot for
agricultural producers.
Is there still a scenario where the U.S. could walk away from USMCA or is that
off the table at this point?
I mean that’s always a scenario, right? The president’s view is he only wants
deals that are a good deal. The reason why we built a review period into USMCA
was in case we needed to revise it, review it or exit it. I have heard from a
lot of folks how important USMCA is. Canada and Mexico are huge export markets
for us.
I was in the White House yesterday, and we were talking about USMCA. What about
Mexico? What about Canada? You know, the possibility that we kind of negotiate
separately with them, right? Their economies are subject to it.
Yeah, where’s his head at right now?
Listen, our relationship with the Canadian economy is totally different than our
relationship with the Mexican economy. The labor situation’s different, the
stuff that’s being made is different, the export and import profile is
different. It actually doesn’t make a ton of economic sense why we would marry
those three together. The actual trade between Canada and Mexico is much smaller
than the trade between the U.S. and Canada and U.S. and Mexico. Sometimes you’ll
hear people say, “Oh, well, you know, USMCA, it’s a $31 trillion agreement.”
It’s like, well, yeah, but like $29 trillion is us. So I think it makes sense to
talk to them separately about that agreement. A lot of the underlying rules are
helpful and you know our exporters benefit from them, but we have to make sure
that we are getting the benefit of our bargain on USMCA.
You were in Brussels recently, talking about deals. Commerce Secretary Howard
Lutnick said when he was over there that the U.S. could modify its approach on
steel and aluminum tariffs if the EU reconsidered its digital rules. Some
European officials were a little irked by that and interpreted it as targeting
the EU’s flagship tech regulations, including the Digital Markets Act. Europe’s
antitrust chief, Teresa Ribera told POLITICO that Washington is
using “blackmail” to strong-arm the EU. What’s your response to that?
That’s a totally extreme thing to say. The problem is the Digital Markets Act
and other European digital regulations and regulations outside of digital, they
actually target U.S. companies. And how do we know that? First of all, when all
these laws were being passed, all the European parliamentarians and all the
leaders in Europe were saying, “We’re going to implement these laws to get
Google, Apple, Facebook, Amazon and Microsoft.” In fact, they have certain taxes
over there, and they call them GAFA tax. The acronym is for American companies.
And then they have these thresholds built into these laws where if you meet a
certain global revenue threshold or you have a certain business model, and just
magically they only capture U.S. companies.
We reported last month that the European Commission was set to present a list to
you of sectors that it wants to be exempted from U.S. tariffs. The list was
expected to include medical devices, wine — which is very important to me —
spirits, beers and pasta. Where do those deliberations stand?
Well, they did not present such a list.
Ah!
And the reason why is because under our deal from the summer, the United States
has already adjusted its tariff levels for Europe, and Europe is still adjusting
its tariffs. And I don’t say this to be critical. They have a legal process they
have to go through, and they’re proceeding through it as quickly as they can, I
think. So it would be weird for them to come and say, “We haven’t finished
making our tariff adjustments yet, and we want more from you.” Listen, if they
want to come and talk about other tariff adjustments, that’ll be up to the
president and that kind of thing. But it’s a sequencing issue. Like why would I
give them more tariff relief before they’ve done their part of the bargain,
right? That doesn’t make sense.
Trump talked about tariffs on the campaign trail, but I don’t think a lot of the
world, particularly our allies in Europe, were necessarily prepared for the
scale, as you mentioned earlier. When you were in Brussels, for example, can you
give me a little bit of a behind-the-scenes on what those conversations are like
when you sit across a table?
Sure. So we are eleven months into this presidency. And I would say that most of
our European partners have frankly become quite pragmatic. In the first term,
when we talked about tariffs and changing the global structure, there was a lot
of almost religious-sounding sermonizing from the Europeans. For them,
international institutions and what they believe is international law, this is
like religion. It’s their religion, and they have these high priests and the
European Commission, all these places. But the folks we’re dealing with right
now in the European Commission, President von der Leyen, the trade commissioner,
these are pragmatic folks. They understand the facts on the ground. They
understand the U.S. view. They understand we have these huge trade deficits that
are not sustainable. And so the conversations are constructive. We’re not
fighting about policy, we’re talking about implementation. So that’s all
positive.
All that being said, there are two or three countries that still like to
sermonize a little bit about this. The ambassador from one country came to me
and said, “Well, how can you use these tariffs against us? You know, tariffs are
bad, blah, blah, blah.” I said, if tariffs are so bad, then how come your
tariffs on us are so high still? And he said, “Well, I’m not trying to
negotiate.” But I mean, that’s my point. They come and they say, “Well, you
shouldn’t have tariffs,” but European tariffs have been higher on the U.S.
historically for many years.
You said the conversations are productive and pragmatic now. Is that a shift
from early this year?
Yes. Yes, a hundred percent.
So where does the EU deal stand?
We had our joint statement in August. We’ve adjusted our tariffs to be a little
bit lower for them. They’re in the process of adjusting theirs. We have a lot of
non-tariff barriers that we face in Europe, regulatory constraints,
certifications, inspection regimes, things that are duplicative, things that gum
up trade between the United States and Europe.
Did Brussels move that all forward?
I would say so. It was less of a negotiating trip and more of taking stock of
where we are, where we’re divergent and next steps. We have a small team coming
over from the Europeans next week to really talk about how we can better
memorialize changes in these non-tariff barriers going forward. Because even
though the Europeans are taking down most of their tariffs for us, if you take
down the tariff but there’s still non-tariff barriers, it’s not effective market
access. So we have to do both the tariffs and the non-tariff barriers.
We can’t talk about trade without talking about China. What is the
administration’s endgame with China? Is it coexistence? Is it decoupling? Is it
selective engagement? What is it?
Well, it’s funny because Washington creates these kind of fake categories.
They’ll say, “Oh, well, either you’re a China hawk or a China dove.” The way we
think about it in the administration is we’re pro-American. We’re not
anti-China. We’re not China doves. We’re not China hawks. We are pro-American.
I think you meant to say America First.
Well, yes, America First. Thank you. And sometimes you hear people saying, “For
America to win, China has to lose.” I just don’t think that’s the case. I mean,
the reality is we are going to do what’s right for America in terms of trade.
And in some cases, it means we have to have a tariff on countries, higher
tariffs on some, like China, because they’re a bigger issue with respect to
trade. They have more trade cheating, they have more subsidies and that kind of
thing. If China still manages to be successful? Fine. We’re not here to try to
contain China. We’re here to make sure that America has a strong national
security, strong economic security, that our workers have jobs that are good for
them in the towns and cities where they live, that they can raise a family.
That’s what we’re trying to do. If China rises or falls on that, that’s kind of
up to them. We’re happy to work with them. They have their own plans.
One thing I will say is people act like American policy drives Chinese reaction,
that China’s just always reacting to us. And I think they want us to think that,
but they’re agents unto themselves. They publish a new policy every five years.
They announced this Made in China 2025 project in 2015, well before President
Trump was the president. So they have their own economic plans, which are
oftentimes adverse to our interests, and so we will control for that, whether
through tariffs or other measures.
We just saw voters in this last election in November clearly send a message that
affordability, cost of living really, really matters. What can you tell the
American people about what they can expect to see going into next year? How will
all of this impact not the markets, but their day-to-day?
What I would say is trade, it’s not a big factor in the affordability
discussion. When you look at affordability, it’s really about the crazy high
expenses for health care that were engendered by Obamacare, which was a
disaster. It’s about housing expenses that went way up during the Biden years
and are still —
But some people, as they’re shopping for Christmas, are connecting prices at
Walmart and at the grocery store to the affordability conversation.
I’ve talked to Walmart officials, I’ve talked to all kinds of officials, and
they have said that they’re not raising prices. At back-to-school time in
September, they say we’re not raising prices. They’re still doing their
rollback. I know that’s a press narrative, but it’s actually not a true
narrative. When you talk about affordability, people are worried about it.
People are worried about housing, they’re worried about healthcare — things we
don’t import.
But where trade comes into it is when you have a trade system in place that
protects U.S. jobs, you get higher incomes. So the blue collar wages are up this
year. That’s what matters. In the first term, we had real income increase, up
until the pandemic, which was like this black swan event. That’s what we’re
trying to do with trade. Trade is not, “Let’s manage affordability through
trade.” Trade is, “Let’s make sure we have good paying jobs here, especially for
that working class whose jobs went away to Mexico or Vietnam or China. And so if
you have blue-collar wages going up, whatever price effects are going on from
all kinds of things in the economy — as long as the real income is outpacing
whatever price effects there are — that’s what we’re looking for. That’s what
we’re seeing.
What about those tariff dividends that the president has floated?
Well, you can talk to Scott Bessent. I don’t control the money. I just put the
tariffs on to make the deals.
BRUSSELS — The European Commission announced Monday it had reached an agreement
with Ukraine to update their existing free trade agreement, granting Kyiv
improved market access compared to pre-war terms, though not fully restoring
wartime trade liberalization measures.
The deal marks a significant reprieve for Ukraine, which continues to resist
Russian aggression more than three years after President Vladimir Putin launched
his full-scale invasion. Earlier this month, Ukraine lost emergency trade
waivers granted by Brussels early in the war.
“Today’s agreement in principle is balanced, fair and realistic. It represents
the best possible outcome under difficult geopolitical conditions,” EU Trade
Commissioner Maroš Šefčovič told a news conference.
“Politically, this is a strong signal of support to Ukraine as it defends its
sovereignty and democratic future. And crucially, it is also a response to
concerns voiced by our member states, farmers and food producers.”
The revised deal, which confirms an earlier report by POLITICO, builds on the
existing EU-Ukraine free trade agreement but updates it to reflect lessons from
the war.
Ukraine has committed to continue aligning its farming standards with EU rules —
a process already underway as part of its path to membership. Full alignment is
expected by 2028, including in areas like animal welfare and pesticide use.
The deal also allows either side to curb imports if they cause serious market
disruption. And while Ukraine won’t regain the blanket tariff-free access it
enjoyed during the war, the new terms raise quotas for many products that
weren’t previously liberalized, while keeping tighter limits on a narrow list of
politically sensitive goods like sugar, poultry, eggs and wheat.
Ukraine’s top trade negotiator Taras Kachka described the outcome as “a really
good deal,” telling POLITICO the level of liberalization secured in the
agreement will allow Ukraine to maintain wartime trade volumes, with only a few
exceptions.
“We actually follow EU standards — and we started this not today but 15 years
ago,” Kachka said, adding that the agreement helps show Ukraine is “a
predictable trade partner” and lays the groundwork for deeper economic
integration.
The agreement follows months of tense negotiations and uncertainty for Ukrainian
exporters. The EU’s temporary wartime measures had initially lifted tariffs on
all Ukrainian products, but later reinstated caps on sensitive agricultural
goods. When these Autonomous Trade Measures (ATMs) lapsed on June 6, the
Commission introduced a hasty interim solution, snapping back quotas to pre-war
levels and sparking a scramble among Ukrainian exporters to move goods before
hitting the ceiling.
BRIDGES OF RESILIENCE
European Commission President Ursula von der Leyen hailed the agreement, saying
in a statement it will build “bridges of resilience and economic solidarity in
the face of Russia’s unjustified war of aggression.”
The deal would safeguard the interests of European farmers, while embedding
Ukraine as part of the European family, she said in a statement: “We remain
committed to a path of mutual growth and stability, leading to its full
integration in our Union.”
Ukrainian exports to the EU have surged since Russia’s full-scale invasion,
bolstered by the wartime suspension of tariffs. That liberalization helped
offset Kyiv’s wartime losses, but triggered a political backlash in frontline EU
countries, where farmers blame cheap Ukrainian goods for undercutting prices. A
patchwork of national bans and licensing systems remains in place in countries
like Poland, Hungary, Slovakia and Romania.
Following Monday’s agreement at political level, both sides will work to fine
tune its technical elements, the Commission said, with EU member countries and
the European Parliament to be briefed in the coming days. Subject to hammering
out a final legal text, both sides will proceed with formally endorsing the
update to the existing trade agreement.
On the EU side, the deal would need to be endorsed by the Council, representing
EU member countries. It would then be formally adopted by the EU-Ukraine
Association Committee.
This story has been updated.
LONDON — Keir Starmer plans to formally sign the U.K.-India trade deal with
Narendra Modi on a visit to India this summer.
Starmer has touted the deal as part of his success on the international stage
since it was agreed in early May after three years of talks. At the G20 summit
late last year, Britain’s leader accepted an invitation from Modi to visit
India.
Britain’s PM is planning to travel to New Delhi this summer to finalize the
pact, two people close to the planning process told POLITICO.
Starmer hailed a “new era for trade and the economy” as a result of the deal,
while Modi said it would “catalyze trade, investment, growth, job creation, and
innovation in both our economies.”
Britain’s Business and Trade Secretary Jonathan Reynolds is meeting Indian
Commerce Minister Piyush Goyal Tuesday to discuss implementing the pact and
pushing forward with talks on the as-yet-unfinished investment treaty that goes
with it.
The two are meeting in Paris on the sidelines of the OECD trade ministers
meeting.
India’s parliament is “very fond” of the deal, said Indian MP Ravi Shankar
Prasad.
“It shows the depth of our relationship,” Prasad, who is leading a delegation of
parliamentarians visiting the U.K. this week, told reporters at the Indian High
Commission in London Tuesday.
The pact is the most valuable trade deal the U.K. has struck since leaving the
EU, and could increase the U.K.’s GDP by £4.8 billion by 2040, according to
British estimates.
The deal aims to cut through high tariffs on U.K. goods in India with 85 percent
becoming tariff-free within a decade. The effect will be equivalent to slashing
£1 billion in tariffs after 10 years.
Measures include immediately slashing India’s 150 percent tariff on Scotch
whisky in half before it is cut to 40 percent after ten years. Duties on the
auto sector will drop from 100 percent to 10 percent with quotas on both sides
for the sensitive sector.
Indian duties will also be lowered on cosmetics, aerospace, medical devices,
electrical machinery and agriculture and food. Britain will lower tariffs on
textiles, footwear, frozen prawns and other food products.
While U.K. negotiators resisted granting more visas for Indian students studying
in the U.K., the Indian side has talked up an ““unprecedented” win on its
workers being exempt from employee tax contributions in Britain — triggering
some pushback from U.K. opposition parties.
The official text of the agreement has not yet been published and will only be
delivered to parliaments in both countries once Starmer and Modi sign the pact.
Indian officials have said the deal is currently undergoing legal scrubbing so
that it can be signed within three months of its agreement, which took place on
May 6.
Downing Street declined to comment.
LONDON — After three years of hard-fought negotiations, the U.K. and India
finally have a trade deal they can agree on.
Prime Ministers Keir Starmer and Narendra Modi agreed the deal in a call Tuesday
after an intensive negotiating sprint by trade officials in London last week.
Striking the deal became a top economic priority for both nations as U.S.
President Donald Trump unleashed a series of major tariff actions on its biggest
trading partners.
“We are now in a new era for trade and the economy,” Starmer said as the deal
was announced on Tuesday. “Today we have agreed a landmark deal with India — one
of the fastest growing economies in the world, which will grow the economy and
deliver for British people and business.”
Modi said the landmark deal will “further deepen our Comprehensive Strategic
Partnership, and catalyse trade, investment, growth, job creation, and
innovation in both our economies. I look forward to welcoming PM Starmer to
India soon.”
The pact is the most valuable post-Brexit trade deal the U.K. has struck since
leaving the European Union. An economic forecast by the British government
suggests the deal will increase the U.K.’s GDP by £4.8 billion by 2040.
Negotiators have been working around the clock on the deal since Britain’s Trade
Secretary Jonathan Reynolds traveled to Delhi in February to relaunch the deal
with Indian Commerce Minister Piyush Goyal following elections in both countries
last year.
Goyal and Reynolds were nearly able push the deal over the line when India’s
trade chief returned to London Friday following visits to Oslo and Brussels. The
two put the finishing touches to the pact over the weekend.
Negotiators, however, were unable to secure a Bilateral Investment Treaty being
sought in parallel with talks for the trade agreement. Negotiations to secure an
investment treaty continue.
SLASHING TARIFFS
As it stands, the deal will cut through high tariffs on U.K. goods in India with
85 percent becoming tariff-free within a decade. The effect will be equivalent
to slashing £1 billion in tariffs after 10 years.
Measures include lowering India’s 150 percent tariff on Scotch whisky by half
immediately, before it is cut to 40 percent after ten years. Duties on the auto
sector will drop from 100 percent to 10 percent with quotas on both sides for
the sensitive sector.
Indian duties will also be lowered on cosmetics, aerospace, medical devices,
electrical machinery and agriculture and food. Britain will lower tariffs on
textiles, footwear, frozen prawns and other food products.
Talks stalled under the previous Conservative government over concerns about
migration, better access for services firms and a host of other issues.
Last month saw negotiators overcame a significant hurdle in the talks when they
closed the mobility chapter, which governs inter-company transfers. India
conceded Britain will only offer minor changes to its visa regime.
Negotiators also resolved another sticking point in the talks with India
securing a “Double Contribution Convention,” allowing firms to claw back
payments to Britain’s state pension pot for those on short-stay visas.
Britain’s nascent tax on high-carbon emissions imports is of significant concern
for India. Yet this won’t be dealt with in the trade deal and is part of ongoing
bilateral discussions.
Modi is racing to transform India into a developed nation by 2047. Its economy
overtook Japan’s as the world’s fourth largest globally this year and is
projected to take the third spot by 2028.
This developing story is being updated.
U.K. King Charles III has invited French President Emmanuel Macron for a state
visit in May, months before a visit by U.S. President Donald Trump that is
expected to take place in September, The Sunday Times reported.
The first state visit by the French leader is being planned amid British Prime
Minister Keir Starmer’s efforts to relaunch relations with the European Union
years after Brexit, while the U.K.’s historic American allies drift away and
turn looking inward under Trump’s presidency.
Macron and Starmer have in recent months led a “coalition of the willing”
composed by European countries seeking to agree on security guarantees for
Ukraine in case a ceasefire is achieved with Russia.
As Macron schmoozes with the king in Windsor Castle, the U.K. and the EU are
expected to seal a defense and security pact at a London summit on May 19 to
boost military spending across Europe.
While defense has served as the first steppingstone in efforts to rebuild
EU-U.K. ties, its implications on trade loom large, as the pact could pave the
way for further negotiations such as an agri-food standards agreement to reduce
trade bureaucracy and EU plans like improved mobility for young people and
students.
In fact, defense pact is hinging on whether the U.K. will make concessions on
fishing rights in English waters for EU fleets.
Both sides are expected to use next month’s meeting to reach a common
understanding of which issues will be part of Starmer’s wider U.K.-EU relations
relaunch.
On the other side of the Atlantic, Trump recently suggested he would visit
Britain in September, after Starmer extended an invitation by King Charles
during his visit to Washington in February.
Trump has in recent weeks slapped hefty tariffs on countries around the world,
including 10 percent duties for U.K and EU products across the board. The U.S.
president hit the pause button on other heavier reciprocal tariffs to give space
to negotiate new trade deals.