2022 February Update #2: Israel, Finland, Turkey, US Deficit, Russia Sanctions

The Governments met last week to discuss a trade deal that will strengthen the economic relationship between UK & Israel. Israel is the UK’s third largest trading partner and the Government will now research in the form of an eight-week consultation. Israel is known as a tech hub and punches above its weight in terms of tech startups, it was third after US & UK but the gap between second and third place is closing. The new deal will remove barriers trading goods and services. The most change could affect services which account for 70% or each economy but only 35% of trade. The Current trade deal is based on the one negotiated with the European Union in 1995.

Finland is celebrating 130 years of collecting shipping data from its customs centre. It measures internal and external trade (both between EU countries & outside). Data is published on the website for public consumption and for research and reports. Such data includes which countries account for how much trade, customs clearance data, net import / export values and interruptions. The Department was formed in 1891, is run by 22 people and produces data on logistics & transport and re-export. There will be a party later this year to celebrate the milestone.

In January Turkey’s foreign trade deficit fell by 7.5% from 2021. Manufacturing industry products account for around 95% of total exports with Germany, the US and UK the three biggest customers. Largest imports are raw materials such as gold, petrol and vehicle parts. Turkey has lately accelerated talks with several regional players such as United Arab Emirates, Egypt, Israel, Saudi Arabia and Armenia. The current president is mending relations with key partners in the region presumably seeking a trade surplus under his sweeping new economic policy which is focused on low interest rates and stronger exports and credit – despite soaring inflation after the record low currency slump in late 2021.

US goods trade deficit reached $1 trillion for the first time ever as Americans consume imports such as toys, cell phones and appliances due to economic recovery fuelled by massive government stimulus. In December the deficit increased to a record high of 3% to $101 billion with imports filling the gap, the first time the deficit breached the $100 billion threshold. Food & Industrial supplies imports fell. Reuters says the economy grew at 5.5% last quarter with growth last year expected to be the biggest since 1984 – stimulus seems like a short term view with inflation set to hit record highs this week and the first ever Government default looming!

US is preparing for sanctions against Russia if it takes military action against the Ukraine. Potential sanctions would affect banking and commodities. The US has said it will precent technology imports which would impact Russia’s ability to obtain circuits for smartphones, televisions, aviation and machine applications at the same level as the most restrictive existing sanctions against Cuba, Iran, North Korea and Syria. Sanctions could be used as an alternative to military action against Russia in the case of invasion against Ukraine in a fight for control over the Crimean Sea which is the thoroughfare of gas pipelines from Europe to China.

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