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US and India Trade Deals Open Doors for UK Traders

May 13, 2025 | , , , , , , , , ,

Two landmark trade agreements with the US and India promise to reshape supply chain opportunities for UK importers and exporters. Both deals offer a mix of immediate tariff relief and long-term potential to diversify sourcing and boost exports.

The newly signed UK-US agreement has reduced US tariffs on British automotive exports from over 25% to 10%, with an annual cap of 100,000 vehicles. While this cap closely matches current UK export levels, the reduced tariff eases pressure on British vehicle manufacturers, particularly those which had previously paused US shipments amid cost uncertainty. The agreement also removes the 25% tariff on UK steel and aluminium, helping lower input costs for UK manufacturers supplying US markets. However, US tariffs remain high for certain automotive parts and some categories of goods.

The agreement marks the first major trade pact since the imposition of US “Liberation Day” tariffs. While the deal falls short of a comprehensive free trade agreement, it provides immediate relief for supply chains and signals a willingness to continue negotiations on broader market access. The US has also committed to fast-tracking UK goods through customs, helping to ease some of the red tape associated with transatlantic trade.

In parallel, the long-awaited UK-India free trade agreement opens up new avenues for fashion and footwear supply chains. Tariffs on over 90% of UK exports to India, including clothing and footwear, will be phased out over a 10-year period. For Indian goods entering the UK, the deal eliminates nearly all levies, offering UK retailers access to competitive manufacturing without compromising quality.

The deal is particularly attractive for UK footwear brands and fashion houses already sourcing from India’s strong leather and non-leather production base. The expected reduction of tariffs and customs barriers is likely to enhance cost competitiveness and shorten lead times. With India’s middle class growing steadily—accounting for nearly a third of its population—the market also presents growing demand for high-quality, internationally recognised UK brands.

At the same time, the agreement offers UK fashion retailers a timely opportunity to diversify sourcing strategies away from markets where rising costs and geopolitical instability have made supply chains increasingly fragile. Industry experts believe some fashion retailers could improve margins by double digits once they fully leverage the benefits of the India deal.

For UK automotive exporters, the India pact includes a commitment to reduce tariffs on UK car exports from well over 100% to 10%. Although the final details of quotas and implementation remain under discussion, it represents the first step towards opening India’s protected automotive market to British manufacturers.

Both trade agreements offer UK businesses critical alternatives at a time of global uncertainty. They present clear potential for easing supply chain costs and improving market access for two key industries that underpin UK manufacturing and retail exports. However, much will depend on the full legal texts and how effectively the provisions are implemented in practice.

The new US and India trade agreements offer real and immediate opportunities. Whether you are looking to streamline transatlantic automotive exports, expand your retail footprint, or diversify fashion and footwear sourcing, Metro can help you unlock the full benefits of these landmark deals.

With decades of experience supporting UK importers and exporters, our expert team understands how to navigate new trade frameworks and optimise supply chain performance. We can help you fine-tune logistics, reduce costs and simplify customs compliance, to take advantage of the new tariff reductions and market access opportunities now on offer.

EMAIL Andy Smith, Managing Director, to find out how we can help you capitalise on these positive changes and build a resilient, agile supply chain ready for growth.

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US-China Tariff Pause Offers Fashion Breathing Space

May 13, 2025 | , , , , , , , , ,

Fashion brands and retailers around the world have welcomed a temporary easing of tensions between the US and China, but remain wary of the wider uncertainty still gripping global supply chains.

A 90-day agreement announced on Monday May 12 will, from May 14, reduce US tariffs on Chinese goods from 145% to 30%, and cut Chinese tariffs on US goods from 125% to 10%. While the move has offered immediate relief, industry bodies warn it does little to address the long-term challenges facing the fashion sector.

The announcement sparked a wave of activity as brands reinstated production orders they had previously paused. The high tariff levels had forced many companies to cancel orders, divert production to Vietnam, Cambodia, and Sri Lanka, or slow shipments into the US and Europe. The easing of duties now gives brands the opportunity to fulfil autumn and holiday orders with a degree of cost certainty, albeit only for a limited window.

Trade associations remain cautious. The Footwear Distributors and Retailers of America called the agreement “a step in the right direction” but emphasised that even the reduced 30% tariff remains a significant burden. The fashion industry, with its typically thin margins, has found it difficult to absorb such additional costs. Retailers and importers warn that prices will inevitably be passed onto consumers, fuelling inflationary pressures across apparel and footwear categories.

The American Apparel & Footwear Association (AAFA) noted that this tariff rate applies in addition to any existing duties and customs fees, potentially pushing total charges on certain items to around 50%. Smaller brands, in particular, lack the scale to mitigate these costs and are likely to face greater challenges.

The agreement doesn’t not reverse the abrupt end of the de minimis exemption, which previously allowed shipments valued at <$800 to enter the US duty free. Fast fashion and eCommerce platforms that relied on this customs regime have been forced to rethink their business models.

Retailers may now attempt to bulk-ship goods to US warehouses during the 90-day window to avoid further disruption.

Supply chain experts say the fashion industry will continue to face high levels of uncertainty. The temporary nature of the deal, coupled with the risk of retaliatory tariffs on goods from countries like Vietnam and Cambodia, means many brands are proceeding with extreme caution. Some analysts warn that if brands rush to resume production, a surge in orders could overwhelm manufacturers and create a cargo capacity crunch, pushing air and ocean freight rates even higher.

The longer-term outlook remains unclear. Fashion companies continue to seek more flexible and diversified sourcing strategies, hedging against the risks of geopolitical instability. Industry leaders have urged policymakers to use the current window to work towards a permanent, predictable trading framework.

For now, the temporary tariff pause has delivered short-term relief, but it is widely viewed as a fragile reprieve rather than a definitive resolution. As one trade association put it, fashion brands will “enjoy this time” but remain braced for further twists in the turbulent global trade environment.

With decades of experience supporting leading fashion brands and retailers, we understand the unique demands of global fashion supply chains. EMAIL Andy Smith, Managing Director, to navigate today’s uncertainty and optimise your international logistics and sourcing strategy with confidence.

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March Airfreight Surge Sets Stage for Further Growth as US-China Trade Tensions Ease

May 13, 2025 | , , , , , , , , , , , , , , ,

Airfreight markets posted a record performance in March, with particularly strong activity on Asia, US, Europe and UK trade lanes. The surge, driven by shippers front-loading cargo ahead of anticipated US tariffs, has provided a benchmark for what could follow in the months ahead as recent tariff reductions between the US and China hint at a renewed spike in activity.

According to IATA, global demand measured in cargo tonne-kilometres rose by 4.4% year-on-year, with international cargo traffic increasing by 5.5%. Capacity, meanwhile, increased by a similar margin, helping to stabilise load factors despite the sudden surge in volumes. Asia-Pacific carriers led growth with a 9.6% rise in demand and an 11% increase in available capacity. North American airlines recorded a 9.5% increase in volumes, while European carriers posted a more moderate rise.

Asia-North America remained the largest and fastest-growing trade lane by market share, as exporters sought to avoid the sharp rise in tariffs. The Europe-North America route also experienced strong activity and was the busiest overall in March, underpinned by steady intra-European demand which grew by 2%.

The operating environment provided further stimulus, with world industrial output and global trade volumes expanding by just under 3%. Falling energy costs provided additional support, with jet fuel prices down for the ninth consecutive month. Inflation rates also stabilised across key markets, providing additional certainty for international shippers. China’s deflationary environment also showed signs of softening, with the rate improving to just below zero.

The result was a sharp escalation in demand from sectors that rely on rapid supply chains and cannot risk ocean freight delays. Electronics, high fashion, automotive and perishable goods were among the leading commodities contributing to the increased volumes.

The extraordinary March performance may not remain an isolated event. The recent temporary US-China tariff reduction has the potential to trigger another wave of increased airfreight activity.

While the extent of future growth will depend on how negotiations between the world’s two largest economies unfold, the easing of tariffs has already bolstered market sentiment.

However, market analysts note that after the March peak, demand may return to more typical seasonal levels in the short term, particularly as capacity has increased by over 6% on international routes, offering more space for shippers. Yet, the fundamental reliance on airfreight for high-value and time-critical shipments between Asia, the US, Europe and the UK remains unchanged.

Should trade relations between the US and China continue to thaw, the market could be poised for another significant uplift in volumes. The key will be whether the current political stability translates into sustained confidence among exporters and freight forwarders across these critical trade lanes.

With airfreight demand surging and tariffs in flux, now is the time to optimise your supply chain strategy. EMAIL Elliot Carlile, Operations Director, to explore how we can help you secure space and streamline your international shipments.

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Trump’s Red Sea Gambit

May 13, 2025 | , , , , , , , , , , , , , , , , , ,

A dramatic shift in the Red Sea shipping crisis may be underway following US President Donald Trump’s announcement that Houthi militants have agreed to halt their campaign against commercial vessels.

His declaration has sparked hopes of restored freedom of navigation through one of the world’s most vital maritime corridors. However, conflicting signals from the Houthis and persistent security concerns leave the industry navigating uncertain waters.

Trump’s comments, made ahead of a high-profile meeting with Canadian Prime Minister Mark Carney on May 6, suggested that after months of military escalation, a breakthrough had been reached. The President claimed that the Houthis had “capitulated” and would cease missile and drone strikes on commercial shipping. He pledged that US airstrikes on Yemeni targets would also end in response.

Omani diplomatic sources have echoed the ceasefire narrative, pointing to coordinated discussions that purportedly yielded a de-escalation agreement and a commitment to non-aggression on both sides.

Yet, the Houthis have swiftly rejected Trump’s portrayal, asserting that no formal truce exists. According to Houthi representatives, the group’s military stance remains unchanged, particularly in relation to Israel, and any pause in attacks was a tactical decision rather than the result of concessions.

This ambiguity undermines confidence among major container lines, many of which continue to avoid Red Sea routes due to crew safety concerns and inflated insurance premiums.

If hostilities genuinely subside, container carriers could begin rerouting vessels back through the Suez Canal. Around 10% of global container capacity has been absorbed by the longer, costlier voyages around southern Africa. A return to Suez would free up this latent capacity, potentially exacerbating overcapacity issues already pressuring the industry. With the container vessel order book standing at about a quarter of the current fleet size, the market faces mounting risk of supply-demand imbalance.

Freight rates, which surged earlier due to the Red Sea crisis, could spike again if carriers resume shorter transits en masse, before softening once schedules settle back down. And while rate increases and extended lead times could finally see some relief the resulting supply-side glut may create new headaches for the container shipping lines.

Port activity along the Red Sea remains subdued, with volumes reportedly down by around half compared to last year. A reliable and lasting resolution could rejuvenate regional trade flows, benefiting not only global carriers but also Gulf-based shippers and transhipment hubs that have been cut off from direct east-west routes.

For now, the shipping industry remains caught between political theatre and on-the-ground reality. Whether Trump’s announcement marks the dawn of stability or another premature claim depends on actions in the Bab al-Mandab, not words in Washington.

The situation in the Red Sea remains unpredictable and liable to change. If your business relies on consistent global shipping operations, this is the perfect time to review your contingency plans and explore flexible alternatives. EMAIL Andy Smith, Managing Director, to learn how we maintain stability and keep supply chains running smoothly, whatever the challenge.

Category: United States

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