Executive summary

This edition of Trade Talking Points provides updates on trade policy developments, including the United States Trade Representative (USTR) announcing the initiation of a Section 301 investigation into Germany, the Department for Business and Trade announcing the implementation date of the United Kingdom (UK)-India Free Trade Agreement (FTA), UK and Malaysia launching negotiations on a Digital Trade Agreement, and the launch of negotiations for a Japan-Mercado Común del Sur (MERCOSUR) Economic Partnership Agreement.

Latest US trade policy announcements

USTR announces initiation of Section 301 investigation of Germany

On 18 June 2026, the USTR, Jamieson Greer, announced the initiation of an investigation under Section 301 of the Trade Act of 1974 regarding Germany.

The investigation aims to determine whether the alleged underpayment for innovative pharmaceutical products by Germany is unreasonable or discriminatory and whether it burdens or restricts United States (US) commerce.

The USTR has asked interested parties to submit by 10 August 2026 written comments and requests to appear at a hearing scheduled for 22 September 2026.

See EY Global Tax Alert, USTR initiates Section 301 investigation into Germany pharmaceutical pricing practices; hearing scheduled and comments requested, dated 19 June 2026.

Latest EU trade policy announcements

European Council announces new framework to strengthen scope of EU CBAM

On 12 June 2026, the European Council announced its new framework on strengthening the European Union (EU) Carbon Border Adjustment Mechanism (CBAM).

The EU CBAM came into operation on 1 January 2026 and puts a price on carbon emissions released during the production of imported goods in the most carbon-intensive sectors: aluminum, cement, electricity, fertilizers, hydrogen, and iron and steel.

The proposed legislation will extend the scope of the EU CBAM to a selection of downstream products, as well as to pre-consumer metal scrap.

Negotiations between the Council presidency and the European Parliament are expected to commence once the European Parliament adopts its own position, with the intention of reaching an agreement before the end of the year. An agreement must be reached before the proposal is implemented.

EU concludes negotiations on enhanced Economic Partnership Agreement with four African nations

On 10 June 2026, the EU and four African nations (Comoros, Madagascar, Mauritius and Seychelles) concluded negotiations for an enhanced Economic Partnership Agreement (EPA).

The EPA aims to strengthen economic and trade ties between all parties and to promote economic opportunity and diversification. The EPA will:

• Improve legal certainty and the conditions for companies supplying services in each signatory's market
• Establish a modernized framework supporting intellectual property (IP) and strengthen IP enforcement tools to support industries in Comoros, Madagascar, Mauritius and Seychelles
• Simplify digital transactions and trade by eliminating customs duties on electronic transmissions

Before the EPA is signed, it must go through the necessary internal procedures, after which the EU Commission will present its proposal to the European Council for the signature and conclusion of the agreement. Once the EPA has been signed and ratified by all parties, it will enter into force.

Latest UK trade policy announcements

Department for Business and Trade announce UK-India FTA implementation date

On 17 June 2026, the Department for Business and Trade (DBT) announced that the UK-India Free Trade Agreement (FTA) will enter into force on 15 July 2026.

Under the UK-India FTA, both parties have agreed that:

• India will remove or reduce tariffs on 90% of tariff lines for UK goods. A total of 64% of products will become duty-free from 15 July 2026, covering approximately £1.9b of UK exports. Over the next decade, 85% of UK goods will become duty-free.
• The UK will provide duty-free access for 99% of Indian exports to the UK from 15 July 2026.
• Tariffs on UK exports of whisky and gin will be reduced from 150% to 75%, with a further reduction to 40% after staging.
• UK car manufacturers will benefit from a tariff-rate quota, reducing tariffs from as high as 100% to 10%.

The FTA is forecast to increase bilateral trade by £25.5b per year.

UK and Malaysia launch negotiations on a Digital Trade Agreement

On 22 June 2026, UK and Malaysia launched negotiations on a new Digital Trade Agreement (DTA) aimed at supporting economic growth and job creation.

Digital trade refers to the exchange of goods, services and data enabled through digital technologies.

The UK and Malaysia's trading relationship was worth £6.4b in 2025.

This DTA seeks to:

• Remove barriers to digital trade and enable UK exporters to expand into high-tech markets
• Reduce trade friction and costs
• Strengthen protections for data, IP and consumers
• Promote partnerships that enhance supply chains and competitiveness

Latest China trade policy announcements

China and International Trade Centre strengthen cooperation under Belt and Road Initiative

On 15 June 2026, China's Ministry of Commerce renewed (in Chinese) the Memorandum of Understanding (MoU) with the International Trade Centre on strengthening cooperation under the Belt and Road Initiative.

As part of the MoU, both parties have agreed to cooperate on key areas, including:

• Enhancing regional trade facilitation
• Facilitating trade and investment
• Strengthening trade capacity building in rural areas
• Sustainable development

Latest global trade policy announcements

Japan and MERCOSUR announce launch of negotiations on Japan-MERCOSUR EPA

On 16 June, the Prime Minister of Japan, Takaichi Sanae, and the President of Brazil, Luiz Inácio Lula da Silva, met at the G7 Summit in Evian, France.

The leaders announced the launch of negotiations for the Japan-MERCOSUR EPA, with negotiations commencing at the Summit of MERCOSUR Heads of State and Associated States at the end of June.

MERCOSUR is a South American trade bloc consisting of five full-member states, including Argentina and Brazil, and seven associate-member states, including Colombia and Ecuador.