UNCTAD WARNS VULNERABLE ECONOMIES FACE THE HEAVIEST BURDEN OF OIL SHOCKS (2 June 2026)
The disruptions recorded in the Strait of Hormuz since February 28, 2026, have been generating a global economic impact that is hitting the world’s most vulnerable economies particularly hard. This is the warning issued in a new report by the United Nations Conference on Trade and Development (UNCTAD), which analyses how disruptions in one of the world’s most strategic energy corridors — through which approximately one-fifth of global oil shipments passed prior to the conflict — are leading to soaring crude oil prices with knock-on effects on international trade, transport and public finances.
The analysis covers 75 vulnerable economies, 65 of which are net oil importers and are home to a combined total of nearly 1 billion people, more than 30 per cent of whom live on less than $3 a day. Against this backdrop, UNCTAD estimates that a sustained 50 per cent increase in the price of refined products could raise the annual oil import bill by more than $20 billion, of which approximately $16 billion would be borne by the least developed countries and $4 billion by small island developing states. For some of these countries, the additional cost could exceed 5 per cent of GDP, posing a dilemma between sustaining essential imports or maintaining investment in development.
The burden, however, extends beyond direct energy expenditure. Higher oil prices drive up transport and freight costs, push up inflation, erode purchasing power and exacerbate the situation of public finances already weakened by debt and previous shocks. Added to this is the fact that several of these countries rely directly on the Gulf region as the source of their energy imports, making it difficult for them to find alternative supplies in the short term. In short, this report highlights that geopolitical tensions in strategic transit zones have trade and development consequences that extend far beyond the immediate area of conflict, disproportionately affecting those with the least capacity to absorb such impacts.
BRUSSELS’ AMBITIOUS PLAN TO REDUCE RISKS (3 June 2026)
The European Union is at a turning point in its trade relationship with China. For years, Brussels prioritised immediate economic efficiency, which allowed Beijing to consolidate near-total dominance over intermediate stages of European supply chains, particularly in relation to the processing of rare earths, battery components, pharmaceutical precursors and semiconductor products (chips), affecting sectors as diverse as electric vehicles, solar energy and defence. This structural dependence became evident when China cut exports of rare-earth materials and some European plants found themselves just days away from halting production.
In response to this situation, the European Commission has launched an ambitious regulatory framework aimed at reducing risks without severing trade relations with Beijing. This includes the Economic Security Strategy (2023), the Critical Raw Materials Act and the Net-Zero Industry Act (2024), the Chips Act (2023), as well as instruments to counter economic coercion and unfair competition. The aim is not to achieve total self-sufficiency, but to prevent economic efficiency from leading to geopolitical vulnerability through the gradual diversification of suppliers.
However, this strategy entails significant costs. Companies that decentralise their supply chains to Eastern Europe or South-East Asia face additional costs of between 5 per cent and 10 per cent per unit, which are inevitably passed on to end consumers. This is particularly problematic in the green technology sector, where rising costs directly conflict with the need for widespread uptake to meet climate targets. Furthermore, the burden is not shared equitably: large companies can access subsidies and reorganise their supplier networks, whilst SMEs face the same pressures with far fewer resources.
Added to all this is an underlying geopolitical dilemma: European companies are caught between the demands of Brussels and potential retaliation from Beijing, which may respond with export restrictions or limit access to the Chinese market. The effectiveness of the strategy will ultimately depend on there being genuine political will and coordination among Member States – two conditions that, according to experts, are not yet guaranteed.
Can the EU de-risk from China and make its trade relationship sustainable? – Euronews
GOODS TRADE HOLDING UP DESPITE MIDDLE EAST CONFLICT AND HIGH ENERGY PRICES (5 June 2026)
The latest World Trade Organization Trade Barometer shows that global trade remains above trend, albeit with early signs of a slowdown. The composite index stands at 101.7 points, slightly below the 102.3 recorded in January, suggesting that the pace of expansion may be beginning to lose momentum. Nevertheless, the figure remains above the benchmark of 100, indicating that trade volumes continue to exceed the long-term trend – a position that has been sustained uninterrupted since early 2025.
As for the factors behind this, the negative impact of the conflict in the Middle East on supply chains and energy prices has been partially offset by strong demand for electronic components linked to investment in artificial intelligence, with the specific index for this sector reaching 105.5 points, well above the trend. Conversely, the indices for agricultural commodities (98.9) and automotive products (99.8) stand slightly below the trend, whilst the transport indices — air freight at 102.2 and maritime container transport at 102.4— continue to point to expansion, albeit at a more moderate pace than in previous months.
Looking at the year as a whole, the WTO projects growth in merchandise trade of 1.9 per cent in a baseline scenario; this figure could fall to 1.4 per cent if high energy prices resulting from tensions in the Middle East persist, or rise by a further 0.5 percentage points if investment in artificial intelligence continues at the current pace. It is worth noting that the strong growth recorded in the first quarter of 2025 was largely due to advance purchases by importers seeking to pre-empt potential tariff increases, a statistical effect that distorted the trend and is not expected to recur to the same extent in 2026.
SUEZ: THE HIGHWAY THAT COULD SAVE GLOBAL TRADE FROM THE CHAOS IN THE STRAIT OF HORMUZ (6 June 2026)
The planet’s geography speaks for itself: although 71 per cent of the Earth’s surface is covered by oceans, the global economy depends on narrow corridors just a few kilometres wide through which 80 per cent of world trade passes. Currently, instability in the main maritime ‘chokepoints’ is reshaping logistics routes. Whilst the Strait of Hormuz is subject to blockades stemming from the geopolitical conflict between the United States and Iran — affecting the passage of one-fifth of the world’s oil and liquefied natural gas — the Suez Canal is establishing itself as the only maritime highway capable of connecting Asian factories with European consumers quickly and efficiently.
Avoiding Suez and using alternative routes, such as sailing round Africa via the Cape of Good Hope, adds between two and four weeks to the voyage, which results in a massive increase in fuel consumption, emissions and operating costs. Following the ambitious expansion inaugurated by Egypt in 2015, the infrastructure reduced transit times from 18 to 11 hours and doubled its capacity. Although attacks by Houthi militias in the Red Sea led to a historic decline in traffic in previous years, data from early 2026 confirms a turning point. Ship traffic through the canal has risen by 5.8 per cent, net tonnage has increased by 16 per cent and the Canal Authority’s revenue grew by 18.5 per cent, reaching $449 million in the first few weeks of the year thanks to the gradual return of major shipping companies such as CMA CGM and Maersk.
This logistics crisis is having a direct impact on the mainland, transforming commercial challenges into a crisis of operating costs for various sectors. Eduardo Santander, Chief Executive of the European Tourism Commission (CET), warns that, unlike previous recessions, the current scenario is not a crisis of demand, but rather one of operating costs driven by uncertainty over the price and availability of kerosene. Rising fuel costs are putting pressure on freight rates and airfares, directly threatening the tourism economy and major economic drivers such as tourism in Spain. However, the European sector retains a remarkable capacity to withstand these external disruptions, as 85 per cent of travel in the region is intra-EU tourism.
Suez: the ‘motorway’ that could save global trade from the chaos in the Strait of Hormuz – La Razón
CHINA BUILDS AN ECONOMIC FORTRESS AS GLOBAL TENSIONS RISE (6 June 2026)
China is building a new economic control framework that combines restrictions on outbound investment with instruments for retaliating against foreign entities. At the heart of the new regulatory framework are two sets of measures: those approved in April, which allow the authorities to intervene when foreign companies attempt to relocate supply chains outside China, and those announced this week by the State Council, which require Chinese companies wishing to invest abroad to undergo a national security review. Both sets of measures form a coherent system designed to prevent the outflow of capital, talent and intellectual property in sectors where China holds a competitive advantage.
From an international trade perspective, the new framework represents a significant break with the principles of open markets and free trade that have guided the global economy for decades, and which have largely underpinned China’s own rise. Investments will be classified into three categories — encouraged, restricted or prohibited — and the authorities are granted new powers to compel divestment or halt operations if risks to national security are identified, a concept that Beijing defines with a notably broader scope than that employed by the United States or the European Union. This creates considerable uncertainty both for export-oriented Chinese companies and for foreign companies operating in China, who fear that the obligation to provide data to international regulators may conflict with the new Chinese requirements.
The framework also incorporates an assertive trade policy dimension: the rules establish the legal basis for excluding or expelling foreign entities from the Chinese market in retaliation for restrictions imposed by other governments on Chinese investment. This element places China in a position of coercive reciprocity vis-à-vis its main partners, replicating – albeit on a larger scale – the logic behind the foreign investment control measures already adopted by Washington and Brussels in the fields of semiconductors, quantum computing and artificial intelligence. The paradox is that these very restrictions could hamper the corporate internationalisation strategy that Beijing has been promoting to circumvent tariff barriers and sustain exports at record levels.
Overall, the new framework reflects the assessment of Chinese lawmakers themselves: the international trading order is being reshaped by rivalry between major powers, and China is seeking to equip itself with its own tools to operate within — and eventually shape — this new, fragmented order.
China Builds an Economic Fortress as Global Tensions Rise – The New York Times
CRITICAL MINERALS ARE RESHAPING GLOBAL TRADE AS DEMAND SURGES (12 June 2026)
The transition to cleaner energy systems, the electrification of transport and the development of digital technologies are reshaping the priorities of the international economy. In this new landscape, so-called critical minerals — such as copper, nickel, lithium, cobalt and rare earths — are no longer regarded as mere commodities but have become central elements of industrial policy and global economic security.
The pace at which this market is evolving is remarkable. Sectoral projections indicate that global demand for lithium could rise by more than 350 per cent by 2040, whilst demand for graphite is expected to increase by over 130 per cent. This dynamism stems from the need to supply high-tech industries, such as electric vehicle manufacturing, battery energy storage, semiconductors and data centre infrastructure.
The current debate surrounding these resources centres not only on the volume of demand, but also on the high geographical concentration of their supply and the capacity to process them. The map of global mining production shows a heavy reliance on a few key players: Cobalt: The Democratic Republic of the Congo accounts for 74 per cent of global production. Natural graphite: China accounts for 78 per cent of the world’s supply. Lithium: Australia, Chile and China together account for more than 70 per cent of production.
The bottleneck becomes even tighter at the refining and processing stages, which is where most of the economic value is generated. China maintains a dominant position in the processing of several of these materials, whilst Indonesia already controls 43 per cent of global nickel refining capacity. This structure poses a structural challenge for resource-rich developing economies, which seek to avoid being confined to the export of raw materials by retaining within their borders the processing stages that generate more skilled employment and technology transfer.
Faced with the latent risks of supply disruptions, governments are increasingly turning to trade policy as an active regulatory tool. Since 2020, nearly 100 restrictive measures have been imposed on exports of critical minerals, including the imposition of tariffs, the requirement for special licences and, in some cases, total export bans. Countries such as Indonesia, China and the Democratic Republic of the Congo are among the most active users of these mechanisms. For producing nations, the aim is to encourage investment in local processing plants, diversify their economies and increase tax revenue. For importing powers, the priority is to diversify their suppliers, reduce dependence on single sources and build more stable supply chains in the face of geopolitical tensions.
As for future prospects: are multilateral agreements possible, or will fragmentation prevail? To manage this uncertainty, economic diplomacy has accelerated significantly. Since 2022, dozens of new international agreements and partnerships have been signed, designed to ensure the flow of materials throughout the entire value chain, from initial exploration to final recycling. However, the actual impact of these development partnerships is still under assessment. Many of the existing agreements maintain a purely extractive approach. Analysts agree that, for developing economies to derive real benefits, these agreements must incorporate effective clauses on technology transfer and the training of the local workforce.
The international landscape is at a turning point. Competition for control of critical minerals could lead to a fragmented trading system, characterised by overlapping regulations and closed blocs that drive up global operating costs. The main challenge for the coming years will be to channel this competition into a predictable framework for international cooperation, one that not only secures the supply of technology but also promotes a just energy transition.
BRUSSELS APPROVES TRADE AGREEMENT WITH THE US WITHIN TRUMP’S DEADLINE AND AVOIDS A TARIFF WAR (16 June 2026)
Almost a year after negotiations began, the EU-27 approved the trade agreement with the United States in the European Parliament, which removes tariffs on all US industrial goods and grants preferential access to the EU market for a wide range of fishery and agricultural products from the US. In a second regulation, the European Parliament also approved the extension of the duty-free import regime for US lobsters, extending its scope to include processed lobster. The vote took place within the deadline set by Trump, who had threatened to impose additional tariffs on European products if the agreement was not ratified by 4 July.
The main regulation will remain in force until 31 December 2029, and by July of that year the Commission must present a comprehensive assessment of its impact on EU industry, agriculture and SMEs, as well as on the development of trade flows with third countries. This assessment may be accompanied by a legislative proposal to extend its validity. The text also incorporates a safeguard mechanism that will allow the agreement to be suspended in whole or in part if European companies suffer serious harm, if the US imposes new tariffs or makes threats against Member States, or if Washington fails to fulfil the commitments set out in the Joint Declaration or disrupts trade and investment relations with the EU. To trigger the formal review, a reasoned request from three or more Member States, industry, trade unions or the European Commission itself, acting on its own initiative, will suffice.
A particularly significant point is the clause relating to steel and aluminium: if, by 31 December 2026, the US has not reduced tariffs on these products to the 15 per cent ceiling agreed for other goods, the EU will be empowered to suspend the concessions granted to the US in this sector. On this issue, the Chair of the Parliament’s Committee on International Trade, Bernd Lange, emphasised that the regulation enshrines the commitments of the Joint Declaration in law, giving the EU the capacity to respond effectively should the US fail to fulfil its part of the deal.
Finally, the agreement incorporates commitments that go beyond the strictly commercial sphere and which do not depend on Brussels but on the Member States themselves: purchases of US energy worth $750 billion and investments in the US totalling a further $600 billion – commitments negotiated directly between Trump and the President of the European Commission, Ursula von der Leyen, as part of the overall package of the agreement.
WTO MEMBERS REVIEW TEMPORARY US IMPORT SURCHARGES (22 June 2026)
The World Trade Organization’s (WTO) Committee on Balance-of-Payments Restrictions held a consultation meeting to assess the 10 per cent temporary surcharge on imports imposed by the United States. This tariff measure was adopted by the US administration with the aim of correcting its balance-of-payments deficit. During the session, chaired by the Sri Lankan Ambassador, R.G.S.P.K. Wijesekara, the statements by the US delegation, a technical report from the WTO Secretariat and the International Monetary Fund’s (IMF) assessment based on the 2026 Article IV consultations were reviewed.
The tariff surcharge was formally notified to the WTO under Article XII of the General Agreement on Tariffs and Trade (GATT), which allows member countries to apply temporary trade restrictions when facing serious difficulties with their foreign reserves or balance of payments. The measure came into force on 24 February 2026 and, as confirmed by US representatives to the committee, is scheduled to expire on 24 July 2026, unless the US Congress approves a legislative extension.
During the exchange of information, several WTO member countries welcomed the United States’ transparency but asked detailed questions about the actual severity of its financial situation and the methodology used to justify the surcharge. Participants also sought clarification regarding the criteria used to grant tariff exemptions to certain products and partner countries. Several delegations urged Washington to assess the negative impact of this policy on global trade flows and to proceed with its phasing out in accordance with the agreed timetable.
Following the round of responses provided by the US delegation, the committee chair noted that a further period of analysis would be required to determine whether it was necessary to convene further consultation sessions. In accordance with the formal procedures set out in the Understanding on Balance-of-Payments Provisions of the GATT 1994, the technical committee will draw up an official report on the progress of these deliberations, which will shortly be submitted to the WTO General Council for final assessment.
WTO members review temporary US import surcharges – World Trade Organization
DDG NORDQUIST HIGHLIGHTS ROLE OF TRADE REMEDIES AMID GLOBAL TRADE CHALLENGES AT SEOUL FORUM (23 June 2026)
During the 24th Seoul International Forum on Trade Remedies, the Deputy Director-General of the World Trade Organization (WTO), DJ Nordquist, analysed the current state of the multilateral trading system. In her address, Nordquist emphasised that, despite geopolitical tensions, fragmentation and de-risking strategies, global trade has shown remarkable resilience. As an example of this, she highlighted that global trade expanded by 4.7 per cent in 2025, a figure that doubled global economic growth (2.9 per cent) and exceeded analysts’ initial forecasts, which had predicted a contraction. For 2026 and 2027, the organisation forecasts growth in trade in goods of 1.9 per cent and 2.6 per cent, respectively.
The WTO’s analysis notes that recent crises, such as the COVID-19 pandemic and the conflicts in Ukraine and the Middle East, have exposed structural vulnerabilities stemming from excessive reliance on highly concentrated supply chains. Among the main areas of concentration mentioned were demand from the United States, the supply of rare earths and strategic inputs from China, the production of advanced semiconductors in Taiwan, and the manufacture of vaccines in a small number of countries. However, the organisation argued that the WTO’s regulatory framework has acted as a source of flexibility, enabling companies and governments to diversify their suppliers and redirect trade flows in the face of blockades or logistical disruptions.
A key point of the speech was the unanimous call for reform of the WTO rules, which have remained largely unchanged since the 1990s. Nordquist explained that the organisation has grown from 23 members with similar economies in 1947 (under the GATT) to its current 166 members with diverse economic models and levels of development, as well as 20 countries in the process of accession. This diversity has made it difficult to reach decisions by consensus and unanimity. A case in point was the recent Ministerial Conference in Cameroon, where members failed to adopt the reform package due to a lack of agreement on extending the moratorium on customs duties on electronic transmissions, thereby shifting the negotiations back to the organisation’s headquarters in Geneva. Despite these institutional difficulties, the technical report highlights that the WTO’s operational functions remain stable:
Basic rules: 72 per cent of world trade in goods continues to be governed by the WTO’s Most-Favoured-Nation (MFN) terms, which serve as the basis for regional agreements.
Dispute settlement: Given the inactivity of the Appellate Body, members in dispute continue to use internal panels and interim mechanisms. Over the past two years, 21 new disputes have been initiated.
Defence mechanisms: In 2025, there was a significant increase in the number of investigations launched and the application of anti-dumping measures and countervailing duties to correct market distortions.
New authorities: Four countries (Cambodia, Sri Lanka, Nepal and Iceland) notified the establishment of national trade defence agencies in 2025, joining those set up by Georgia, Mauritius, Cape Verde and Cameroon between 2023 and 2024. With these additions, 82 members — almost half of the organisation — now have technical authorities regulated by Article VI of the GATT to tackle unfair trade practices.
INDIA SAYS IT DISCUSSED PATHWAYS TO INTERIM TRADE DEAL WITH US (24 June 2026)
The governments of India and the United States have explored the available avenues for concluding an interim trade agreement, according to an official statement issued by the Indian government following bilateral meetings held in New Delhi between its Minister of Commerce, Piyush Goyal, and the United States Trade Representative (USTR), Jamieson Greer. Greer’s talks in India, scheduled to last two days, are seen as a significant step towards stabilising bilateral relations against a backdrop of previous diplomatic tensions. This meeting follows on from the meeting held on 17 June between Prime Minister Narendra Modi and US President Donald Trump on the sidelines of the G7 summit, after which the Indian government highlighted that substantial progress had been made towards a balanced and commercially significant final agreement.
On the economic front, India’s exports to the US market recorded a slight increase during the period from April to May, standing at $17,290 million compared with $17,210 million recorded in the same period the previous year, despite regulatory uncertainty surrounding Washington’s future tariff policies. Although New Delhi and Washington reached a preliminary trade understanding in February, the final resolution remains contingent on the outcome of a US investigation under Section 301. This procedure examines alleged industrial overcapacity and concerns regarding forced labour in around 60 global economies, including India.
Through these negotiations, India is seeking to secure competitive tariff advantages in the US market vis-à-vis other exporting countries in the region. In the initial agreement reached in February, both governments agreed to set an 18 per cent tariff on Indian goods in exchange for New Delhi reducing its trade barriers and increasing its purchases of US products. However, analysts at the Global Trade Research Institute (GTRI) in New Delhi point out that the situation has been altered by a recent ruling by the US Supreme Court which invalidated the Trump administration’s global tariffs. According to these technical reports, this court ruling has affected the US offer to reduce tariffs from 25 per cent to 18 per cent, whilst India is still being asked to make long-term market access commitments. After concluding his itinerary in India, the US representative is due to travel to Uzbekistan to meet with President Shavkat Mirziyoyev to discuss bilateral trade relations.
India says it discussed pathways to interim trade deal with US – Reuters
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In Madrid, 30 June 2026
International Trade and Sanctions Department
Lupicinio International Law Firm
