Economy
UK’s PM-in-waiting pledges ‘circuit breaker’ to transform UK economy
Andy Burnham, United Kingdom’s prime minister-in-waiting, vowed on Monday to deliver radical change to the nation’s politics, pledging to give away a chunk of his power by handing greater autonomy to local leaders in a “circuit-breaker” for the sclerotic British state.
In a speech at the People’s History Museum in Manchester, “one of my favorite places on earth,” Burnham offered some detail of his plans if, as expected, he becomes Britain’s seventh prime minister in a decade next month.
The former mayor of Greater Manchester also said he would move part of the prime minister’s office from London’s 10 Downing St. to northwest England as part of “the biggest rebalancing of power our country has seen.”
“Growth cannot be ordered from the top down. Instead, it can only be nurtured from the bottom up,” Burnham said in the speech aimed at bringing voters, Labour Party colleagues and financial markets up to speed with his economic vision.
Burnham is the strong favorite to replace Prime Minister Keir Starmer, who announced his resignation last week.
“If councils can’t fix potholes, what chance do they have of bringing forward major regeneration schemes to get growth going?” Burnham said. He set out a 10-year plan to get “good growth in every postcode,” in a country where wealth and power are concentrated in London and the south of England.
He said he would reverse almost two decades of low growth since the 2008 financial crisis through an approach dubbed “Manchesterism” – harnessing private and public money to invest in areas like transport, housing and infrastructure. He also pledged to create new industrial jobs and better educational opportunities, and to reform the U.K.’s inefficient and expensive privatized water and energy utilities.
During the speech in the city where he spent nine years as mayor, Burnham said a new government office in Manchester – dubbed “No. 10 North” – would oversee regional development and become “the nerve center of a rewired Britain,” tasked with equalizing living standards across the country.
Regional mayors would get more power over housing, welfare and education as part of his planned reforms.
Burnham said he would build more social housing, give local governments more control over water and other utilities and take on a cost-of-living crisis, all while sticking to the current government’s fiscal rules.
Burnham’s rousing speech was short on specifics about where the government would find more money, and he didn’t take questions from journalists.
In a pointed comment to Starmer, Burnham said he would end “the business as usual” approach to politics which he described as failing to lift the living standards of so many in the country.
He won praise for his role in revitalizing and regenerating Manchester, but he has not served in a U.K. government for almost two decades, and may struggle to replicate “Manchesterism” on a U.K.-wide scale.
‘Fundamental shift’ needed
The Institute for Public Policy Research (IPPR), a left-leaning think tank, said Burnham is right to focus on “rebalancing Britain.”
“The U.K.’s concentration of power and opportunity in Westminster has held back growth, productivity and living standards for too long,” said IPPR Executive Director Harry Quilter-Pinner. “The real test now is delivery.”
Matthew Flinders, a politics professor at the University of Sheffield, said replicating Burnham’s Manchester approach on a national level would require “a fundamental shift” in the way politics is done in Britain.
“And at the heart of that would be moving from a very traditional, elitist, centralized model of politics toward something that is in many ways far more European, far more based on power-sharing in order to develop long-term policymaking capacity,” he said.
Burnham will be aware that Starmer also announced a 10-year mission – the equivalent of two full terms in government – to transform Britain soon after he was elected in a landslide in July 2024. Starmer is leaving after two years in office marred by missteps and judgment errors that eroded his standing with his party and the public.
Burnham won a special election for a seat in Parliament on June 18 and was sworn in as a lawmaker on June 22, the same day Starmer announced that he will resign as soon as a successor is chosen.
Burnham is so far the only contender in the Labour Party leadership contest. If no one challenges him, he will become prime minister by July 20.
While Burnham is considered more charismatic than the stolid Starmer, he will face many of the same political and economic challenges, including a sluggish economy, tattered public services and a cost-of-living squeeze. He will also be constrained by the platform the center-left Labour Party was elected on in 2024, with its pledges not to increase taxes on working people.
And like other NATO countries, the U.K. is under pressure to dramatically increase defense spending to counter a more aggressive Russia and less reliable United States.
The government’s long-awaited defense investment plan – which sparked the resignation of Defense Secretary John Healey on June 11 – is expected to be published before a NATO summit in Türkiye on July 7 and 8. Starmer’s successor will be expected to stick to the commitments in the plan.
“Andy Burnham’s big idea is to shuffle power between politicians,” said opposition Conservative Party Chair Kevin Hollinrake. “Not fix the welfare system. Not cut the taxes strangling working families and British business. Not fund the defense our country desperately needs.”
U.S. retailers are speeding up their orders from China, moving up orders by four to six weeks to secure inventories for Black Friday and Christmas holiday sales before expected tariff hikes later this year, shipping executives said.
U.S. President Donald Trump’s visit to China last month has preserved the detente between the world’s two largest powers, but uncertainty remains high.
A universal 10% U.S. tariff imposed by Washington in February, after the Supreme Court declared some earlier tariffs illegal, expires on July 24, but it is widely expected to be replaced with higher levies.
The U.S. Trade Representative has proposed a 12.5% tariff on imports from China and elsewhere following an investigation into forced labor, which Beijing denies, with a final decision expected in the coming months.
“There is an expectation that tariffs could be raised again, or restored to previous levels, so everyone is rushing to get goods in before that happens,” said Tony Meng, a China-based senior sales manager at shipping firm XPD Global.
U.S. exports expected strong in June
Usually, such orders peak in July through September, but shipping firms said volumes in May and June were higher than expected, contributing to a spike in shipping prices.
The frontloading means that the 35% growth in U.S. imports from China in May, which overshadowed April’s 11% growth and March’s contraction, could be sustained in June but may fade later in the summer.
Exports have been a key growth driver this year for China, compensating for structural weakness in domestic demand and building on a strong 2025 when the world’s second-largest economy posted a record $1.2 trillion trade surplus.
China’s top U.S. export items by value in May included smartphones, lithium-ion batteries, solid-state drives, toys, kitchenware and festival products. June data will be released on July 14.
Shipping group Maersk said in a statement to Reuters that container space has been tightening on the China-U.S. route since mid-May, due to “stronger customer demand and earlier seasonal bookings.”
A China-based shipping executive, who requested anonymity because he was not authorized to speak to the media, said back-to-school items such as stationery and apparel were part of the May-June frontloading, while early Christmas stockpiling also played a role.
He added May’s rise was also due to soccer World Cup-related orders, including jerseys, flags, souvenirs and large-screen TVs. The U.S. co-hosts the tournament with Canada and Mexico.
Shipping costs rise
Maritime consultancy Drewry’s World Container Index showed spot shipping rates from Shanghai to New York on June 25 were $7,149 per 40-foot container, 6% higher than a week before and 25% up on the year.
On the Shanghai to Los Angeles route, the cost was $5,750, 12% up on the week and 54% higher on the year.
“Importers continue frontloading shipments ahead of potential tariff changes and higher bunker-related costs,” a Drewry report said.
Outdoor furniture maker Jin Chaofeng said it would be hard to pass the entire cost of shipping fees on to customers, pointing to thin pricing power and profit margins for Chinese manufacturers in less technologically advanced sectors.
Kyle Henderson, CEO and co-founder of container-tracking software provider Vizion, warned, however, that tariffs still weigh on overall U.S. demand , which remains below its three-year average and should only be described as “normal-to-soft.”
The higher shipping costs reflect capacity management by transport firms more than surging U.S. demand, Henderson said, citing some cancelled sailings in recent weeks.
Henderson expects volumes to drop after July and into the third quarter due to a “combination of inventory already landed and a tariff environment that structurally raises the cost of China-origin goods.”
Türkiye’s foreign trade deficit narrowed 15.6% year-over-year in May, as imports fell more sharply than exports, official data showed on Tuesday.
Exports totaled $22.46 billion (TL 1.05 trillion), down 9.5% from the same month last year, while imports dropped 10.8% to $28.07 billion, according to provisional figures from the Turkish Statistical Institute (TurkStat) and the Trade Ministry.
The foreign trade gap fell to $5.61 billion in May from a year earlier.
The export-import coverage ratio rose to 80% in May, compared with 78.9% in the same month of 2025.
Excluding energy products and non-monetary gold, exports fell 11.5% to $20.5 billion, while imports dropped 16.2% to $21.03 billion. The trade deficit excluding these items stood at $525 million, while the coverage ratio was 97.5%.
Tuesday’s figures showed energy accounted for nearly one-quarter of Türkiye’s total imports in May, rising 43.4% year-over-year to $6.11 billion.
Crude oil imports increased 1.7% year-over-year to 2.67 million tons, up from 2.62 million tons in the same month last year.
This January through May, overall exports edged up 0.2% year-over-year to $111.12 billion, while imports rose 1.1% to $153.83 billion.
The foreign trade deficit rose 3.6% in the first five months of the year to $42.72 billion. The export-import coverage ratio fell to 72.2%, from 72.9% in the same period last year.
Germany was Türkiye’s top export destination in May, with shipments totaling $1.71 billion, followed by the U.S. with $1.52 billion, the U.K. with $1.38 billion, Italy with $1.14 billion and Spain with $922 million.
Russia was the leading source of imports, with $3.76 billion, followed by China with $3.43 billion, Germany with $2.04 billion, the U.S. with $1.21 billion and Italy with $1.06 billion.
Manufacturing products accounted for 94.5% of total exports in May, while intermediate goods made up 72.7% of total imports.
The share of high-technology products in manufacturing exports was 3.1% in May, while high-tech products accounted for 11.8% of manufacturing imports.
The European Union’s proposed Industrial Accelerator Act (IAA) – aiming to boost production in strategic sectors – will be decisive in the future of production and supply chain ties between Türkiye and the bloc, business leaders argued.
The flagship framework lies upon a “Made in EU” specification, requiring specific shares of member states involved in procurement, state aid, and various incentive programs.
The regulation aims to support European production, especially in clean technologies, the automotive sector, batteries, steel, chemicals and critical raw materials, to reduce its dependence on China and boost its production capacity.
The regulation could impact the bloc’s supply chain ties with Türkiye, depending on the extent to which products made in the country will be recognized within the Union origin requirements criteria or “EU content.”
Türkiye is highly integrated into Europe’s production and supply chains across many sectors due to the customs union, playing an active role in sectors ranging from automotive and machinery to steel and chemicals, with Turkish industrial products holding a massive share in the EU market.
Origin question
The draft includes an approach to evaluate production originating from Türkiye as European under certain conditions, but business leaders say this amounts more to preserving the current status quo than creating a new opportunity for Turkish firms.
The draft could potentially change amid negotiations between member states and the European Parliament (EP).
The definition of European content is limited to production carried out in member states, which could harm Turkish producers by reducing their access to certain incentives and public procurement, resulting in Turkish firms benefiting less from the bloc’s industrial incentives and creating a competitive disadvantage against European rivals.
Experts said excluding Türkiye from the Made in EU specification would increase costs for Turkish manufacturers and numerous European firms that rely on Turkish suppliers.
Auto sector
The auto sector is expected to be one of the most affected by the regulation, as Türkiye is one of Europe’s major vehicle production hubs, playing a key role in the supply chains of many global automakers.
Türkiye could secure a stronger position in Europe’s green transition and clean industry investments if kept within the framework.
Mehmet Ali Yalçındağ, chair of the Türkiye-Europe Business Council at the Foreign Economic Relations Board (DEIK), stated that Türkiye has been integral in Europe’s supply and value chains for nearly three decades with the customs union, noting that evaluation products made in the country under the Made in EU approach are significant.
He said the auto industry would be the most affected as it is not limited to vehicle production but involves multi-layered value chains like battery technologies, semiconductors, critical raw materials, software, artificial intelligence production systems and energy efficiency.
He noted that Türkiye is one of Europe’s key partners in green and digital transformation due to its strong auto supply industry, advanced supplier network, engineering capabilities, electric vehicle (EV) ecosystem and investments in low-carbon production.
“It is a strategic necessity to ensure products made in Türkiye are integrated into Europe’s industrial ecosystem without being subjected to quotas, obstacles or additional barriers, not only for the Turkish private sector but also for the EU’s industrial transformation and global competitiveness,” he said.
“Excluding Türkiye would affect Turkish firms and EU firms investing in Türkiye alike, as well as European manufacturers sourcing from Türkiye, affecting the bloc’s competitive production capacity; restricting Turkish production in strategic sectors would drive up costs, reduce the resilience of supply chains and weaken the EU industry against global competitors,” he added.
Yalçındağ urged the bloc to focus on updating the customs union and implementing common industrial policies to further existing integration instead of creating new barriers.
Türkiye and Pakistan, which recently played a leading role in facilitating an understanding as mediators in negotiations between Iran and the U.S., are now turning their intensive diplomatic engagement toward expanding economic cooperation, according to a report on Tuesday.
According to information obtained by Anadolu Agency (AA), Pakistani Prime Minister Shahbaz Sharif will pay an official visit to Türkiye on July 2-4, accompanied by ministers and business representatives.
Sharif, who will visit at the invitation of President Recep Tayyip Erdoğan, is scheduled to hold bilateral and delegation-level meetings, while a Türkiye-Pakistan Business Forum will also take place.
Against this backdrop, the two countries, which have significantly strengthened ties in recent years, particularly in trade, the economy, the defense industry and energy, are expected to elevate their cooperation to a new level.
During their talks, Erdoğan and Sharif will review political and diplomatic relations while placing particular emphasis on economic cooperation, the AA report indicated.
The business forum, attended by business leaders from both countries, will focus on the investment climate in Türkiye and Pakistan, sectors with strong growth potential, and bilateral trade and investment opportunities. Business-to-business meetings will also explore new avenues for cooperation.
The discussions are expected to center on four key areas: information technology and telecommunications, oil and precious minerals, a special economic zone planned to be allocated to Türkiye, and the privatization of Pakistan’s electricity distribution companies.
Ministers responsible for these investment sectors are also expected to participate in the forum.
Last week, Ankara said it would support Pakistan’s electricity privatization and power sector reform efforts through three newly signed cooperation agreements, with Turkish institutions set to provide expertise in transmission systems, electricity market operations, distribution monitoring and capacity building.
“We will share our experience to the fullest and do our best to support you in this highly important and sensitive process of privatizing Pakistan’s electricity sector,” Energy and Natural Resources Minister Alparslan Bayraktar said at the time.
Joint transport, energy projects on the agenda
President Erdoğan visited Pakistan in February last year as part of his South Asia tour.
The visit resulted in the signing of 24 agreements covering a broad range of sectors, including defense, energy, agriculture, trade, industry and communications.
During Sharif’s visits to Türkiye later that year, both sides also implemented decisions aimed at deepening economic ties.
Moreover, expanding transportation cooperation remains a priority on the Ankara-Islamabad agenda.
The two countries, particularly focused on road and rail connectivity, plan to revive the Islamabad-Tehran-Istanbul freight train route. Joint projects along the Middle Corridor, the China-Pakistan Economic Corridor and the Development Road route are also among the initiatives under discussion.
In addition to transport, the talks will address projects designed to strengthen energy cooperation.
Türkiye and Pakistan have already signed an oil and gas exploration and production agreement covering Pakistan’s onshore and offshore areas.
Ahead of Sharif’s visit, officials also discussed ways to facilitate Turkish companies’ participation in Pakistan’s privatization tenders, opportunities for local partnerships, and strategic steps to expand existing investments.
Türkiye’s experience and sectoral expertise in privatizing electricity distribution assets in recent years were shared with Pakistani counterparts. New decisions on these issues are expected during the visit.
Trade target set at $5 billion
Pakistan, one of Türkiye’s priority export markets, accounted for more than $1.2 billion in bilateral trade last year. Of that total, Turkish exports amounted to $866.5 million, allowing Türkiye to maintain its position as a net exporter in bilateral trade.
Ships and floating structures, and vehicles accounted for the largest share of exports at $303 million.
They were followed by cotton and cotton products at $150.2 million, and boilers, machinery and mechanical appliances at $95.5 million. Together, these three categories totaled $548.6 million, representing 63.3% of Türkiye’s exports to Pakistan.
During the first four months of this year, Türkiye’s exports to Pakistan reached $196.4 million, while imports from the country totaled $103.5 million.
The two sides hope that new agreements to be signed during the visit will pave the way toward achieving their long-standing goal of raising bilateral trade to $5 billion.
Turkish contractors undertake $3.5B in projects
According to the latest figures, Turkish investors have invested more than $2 billion in Pakistan.
Turkish contractors have undertaken projects worth $3.5 billion in the country, while Pakistan-based companies have made nearly $700 million in direct investments in Türkiye. These investments span sectors including automotive, electronics and telecommunications.
Following their recent diplomatic efforts that helped pave the way for an understanding in Iran-U.S. negotiations, Türkiye and Pakistan are now expected to use the high-level meetings scheduled for early July to open a new chapter in economic cooperation.
Türkiye is seeking easier access to the Schengen area despite improvements under the European Union’s phased visa system, Trade Minister Ömer Bolat said on Tuesday.
Bolat’s remarks came following talks with EU Commissioner for Enlargement Marta Kos, who arrived in Ankara as part of a top delegation that also included EU foreign policy chief Kaja Kallas and European Commissioner for Internal Affairs and Migration Magnus Brunner.
The delegation was received by President Recep Tayyip Erdoğan and was also scheduled to hold talks with other top officials, including Foreign Minister Hakan Fidan, Treasury and Finance Minister Mehmet Şimşek and Transport and Infrastructure Minister Abdulkadir Uraloğlu.
The recurring issue of Europe’s long-promised visa liberalization scheme was highly expected to hover over the talks as frustration grows in Türkiye over Schengen visa delays and rising rejections.
Last year, Turkish nationals submitted 1.25 million visa applications for the Schengen zone, up from 906,000 in 2019, European Commission figures show. Of that number, 1.07 million were approved.
But the rejection rate has also risen – from 9.7% in 2019 to 14.6% in 2025, prompting headlines decrying a “visa crisis.”
Bolat said the phased visa facilitation mechanism (visa cascade), introduced last year, had helped reduce application backlogs and increase the issuance of longer-term visas.
“However, growing trade, tourism and educational cooperation requires a visa-free environment. At the very least, our biggest expectation is that obtaining visas will be made easier,” he told reporters.
The minister noted that simplifying the visa application process is Ankara’s top diplomatic priority until full visa-free travel is achieved.
Talks with Kos prominently featured ongoing efforts to update the customs union agreement, said Bolat.
For decades, Türkiye and the bloc enjoyed good trade ties and cooperation on migration. However, relations have been strained over multiple issues, including the prolonged process of expansion of the scope of the customs union agreement and maritime issues with Greece and Greek Cyprus.
The deeper 1990s-era trade agreement would be expanded to services, farm goods and public procurement. The current deal only covers a limited range of industrial products.
Business groups have long argued that the deal is outdated and ill-suited for today’s trade environment.
Clarity sought on ‘Made in EU’ specifications
Bolat also said Türkiye had raised concerns over the EU’s evolving industrial policy and protectionist measures amid increasing competition with the United States and China.
Referring to the EU’s proposed Industrial Accelerator Act, Bolat said the European Commission had recently decided to treat Türkiye within the scope of the “Made in EU” industrial framework, but added that important details still needed clarification.
Bolat said Türkiye’s 30-year customs union integration with the EU and its status as a candidate country should prevent any measures that undermine the free movement of industrial goods or disrupt supply chains between Turkish and European manufacturers.
The minister also highlighted Türkiye’s strategic role as a logistics hub linking Europe, Asia and Africa, saying recent conflict in the Gulf had underscored the importance of alternative trade corridors.
He said both sides agreed that Türkiye’s transport infrastructure makes it “an excellent transit corridor” and added that EU officials acknowledged the country’s progress over the past two decades and its growing importance to Europe’s defense and industrial ecosystem.
The EU delegation’s visit comes ahead of key NATO summit in Ankara next week.
Türkiye will host 32 NATO leaders, as well as officials from the Gulf and Asia-Pacific region, on July 7-8 for a summit that it hopes will emphasize alliance unity and bolster deterrence.
U.S. President Donald Trump has threatened to pull his country out of the alliance while Washington has moved to withdraw troops, planes, ships and weapons from Europe due to tensions among allies over burden-sharing, defense spending, and U.S. complaints about allies’ lack of involvement in reopening the Strait of Hormuz during the U.S. and Israeli war with Iran.
Earlier on Tuesday, Kos and Turkish Transport Minister Uraloğlu attended a closing meeting of the Strengthening Intermodal Transport Services in the Turkish Railway Sector (U-IMT) Project, a joint initiative co-financed by the EU and Türkiye.
“With the U-IMT Project, we achieved significant gains that will make our railway freight transport more competitive, increase the capacity of the Middle Corridor, and advance our cooperation with the European Union in the field of connectivity,” Uraloğlu said.
The project was designed to improve intermodal freight services in the Turkish railway sector and support a shift toward a safer, more environmentally friendly and balanced transport system.
It also aimed to prepare an action plan for intermodal freight services, identify strategic infrastructure needs, and strengthen the institutional capacity of relevant Turkish transport authorities.
Türkiye and Qatar have signed a strategic partnership agreement for a next-generation communications satellite project, a top official said on Tuesday.
The deal forms a long-term collaboration between Turkish satellite operator Türksat and Qatar-based Es’hailSat.
Transport and Infrastructure Minister Abdulkadir Uraloğlu said the agreement covers the Es’hail-3/Türksat-Biruni satellite project and establishes a long-term strategic partnership focused on capacity sharing and joint commercial growth.
The agreement was signed in Doha by Es’hailSat Chair and CEO Ali Ahmed Al-Kuwari and Türksat General Manager Ahmet Hamdi Atalay.
Under the agreement, the partners will jointly utilize the capacity of the high-throughput Ka-band Es’hail-3/Türksat-Biruni satellite, which will operate at the 50 degrees East orbital position.
The cutting-edge satellite will be built by Thales Alenia Space, the joint venture between Thales and Leonardo, the company said separately on Tuesday.
The satellite will offer high-speed broadband connectivity services across Europe, Africa, Central Asia and the Middle East.
Uraloğlu said the partnership would strengthen Türksat-Biruni’s commercial capacity, expand Türkiye’s presence in global satellite communications markets and enhance the country’s competitiveness in the sector.
The project, financed by Qatar, will add a new high-capacity satellite to Türksat’s fleet. Up to 50 gigabits per second (Gbps) of satellite capacity will be made available to Türksat, helping reinforce Türkiye’s satellite communications infrastructure, said Uraloğlu.
Under the deal, the companies will also cooperate by sharing satellite assets, ground infrastructure, distribution networks and customer portfolios, aiming to optimize capacity utilization and maximize the satellite’s commercial potential from the outset.
Uraloğlu stressed that the project would preserve Türkiye’s strategic rights over the 50 degrees East orbital slot and associated frequency allocations, with no transfer of orbital or spectrum rights. The satellite will be registered under Türksat with the International Telecommunication Union (ITU).
He said the satellite would support broadband internet, aviation and maritime connectivity, government communications and enterprise data services across the region it will cover.
According to Uraloğlu, the agreement also deepens the strategic relationship between Türkiye and Qatar by extending bilateral cooperation into the space and satellite technologies sector.
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