Taiwan's chipmakers have 'bargaining power', can pass on tariff costs: Analyst
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CNBC
17 minutes ago
- CNBC
Trump's 30% tariff letter leaves EU scrambling to bring U.S. on side
The European Union has been left scrambling after U.S. President Donald Trump said he would slap a 30% tariff on goods imported from the bloc beginning Aug. 1. European leaders were quick to respond, saying they would still work to strike an agreement with the U.S. before the start of August. The EU also further delayed countermeasures which were set to come into effect this week and warned that preparations for additional retaliatory moves were underway. EU Trade Commissioner Maros Sefcovic on Monday told reporters that the letter had been received with "regret and disappointment ... especially considering the advanced stage of our ongoing negotiations." Sefcovic stressed that the EU was still focused on finding a negotiated solution, but was preparing for all possible outcomes — which could include countermeasures. He also said that he would speak to his U.S. counterparts later in the day. "I cannot imagine walking away without genuine effort," the trade commissioner said. With less than a month before Trump's new deadline, the European Union will have to act fast to prevent the tariffs from coming into effect or risk further escalation. While EU leaders remain determined to strike a deal, economists and analysts warned that the threat of a 30% tariff rate has nevertheless added fresh pressure to the 27-member block. "It's very bad news for Europe," Alicia Garcia-Herrero, senior fellow at Bruegel and chief economist for Asia Pacific at Natixis, told CNBC's "Europe Early Edition" on Monday. "Trump is pushing the commission to really come up with a better deal," she added. Carsten Brzeski, global head of macro at ING, and Inga Fechner, a senior economist at ING who focuses on global trade, struck a similar tone. "Trump's letter to the EU is not a love letter but also not a hate letter. It's a letter to increase pressure in the ongoing negotiations," they said in a note on Sunday. The EU however still has options, the economists said, suggesting that one approach could be for the EU to offer to boost its purchasing of U.S. products ranging from soybeans to military equipment. Brussels could also reduce existing tariffs and other trade hurdles on items such as U.S. cars, or introduce export bans on products that are important to the U.S. such as European-made pharmaceuticals, Brzeski and Fechner said. "The fourth and final option would be to go into outright retaliation with either increasing tariffs on US goods or the nuclear option in trade: tariffs on digital services but also tighter regulations on US tech firms," the economists suggested, noting, however that this would likely trigger a full blown trade war. Despite the additional pressure for the EU, the expectation remains that the bloc and Washington D.C. will strike a agreement in the coming weeks. "I think both sides will strike a compromise. This is in the best interest of both the U.S. and the European Union," said Joerg Kraemer, chief economist at Commerzbank. "I expect in the end, a kind of average tariff rate for the European Union for exports to the U.S. in the area of 15%," he told CNBC'S "Europe Early Edition" on Monday. Notably, this rate would be higher than the 10% that had previously been anticipated by many and is in line with the deal that has been agreed upon by the U.K. and U.S. Berenberg Economist Salomon Fiedler meanwhile appeared more optimistic, saying in a note that the bank was still expecting 10% duties even as "the risks are now strongly skewed towards higher rates." One reason for optimism is that Trump has repeatedly taken extreme positions initially, and then later compromised, Fiedler argued. "The fact that Trump only threatened the new 30% rate for 1 August, instead of implementing it more quickly, suggests he is still looking to negotiate," he said. Trump may also shy away from further tariffs as businesses start passing on higher import costs to consumers, Fiedler suggested. The domestic political backdrop may also change, which could make it less important for the U.S. president to try and keep public attention on trade, he added. On the flipside, risk factors for higher levies include the unlikelihood that the U.S.' trade deficits — which Trump has often used as an argument for tariffs — will disappear, and the U.S. administration's reliance on tariff incomes to supplement its budget, according to Fiedler. "The always remote hope of a good negotiation outcome — the bilateral removal of all tariffs and some other trade barriers between the EU and the US — has all but disappeared from view by now," he noted.
Yahoo
20 minutes ago
- Yahoo
US clothing sales dip in June 2025 amid tariff concerns
According to the CNBC/NRF Retail Monitor, US clothing and accessory stores sales decreased by 0.22% in June after seasonal adjustments. Without seasonal adjustments, sales in these categories grew 2.71% compared to the same month in the previous year, however, this growth is less than the 3.21% year-on-year increase recorded in May 2025. NRF president and CEO Matthew Shay said: 'This was the first monthly decline since February, and spending was down across almost all sectors. Economic fundamentals haven't been disrupted yet and shoppers still have the ability to spend on priorities, but the economy is gradually slowing and there has been an impact on the psyche of consumers. While passage of the 'Big Beautiful Bill' is clearly supportive of economic growth, unresolved and restrictive trade policies remain a significant headwind.' The Retail Monitor, which is powered by Affinity Solutions, also shows that overall retail sales, excluding automobiles and gasoline, dropped by 0.33% seasonally adjusted month over month but increased by 3.19% unadjusted year over year in June this year. This contrasts with the increases of 0.49% month over month and 4.44% year over year in May. Core retail sales, which includes categories except restaurants, automobile dealers and gasoline stations, fell by 0.32% month over month in June but rose by 3.36% year over year. These figures compare with increases of 0.23% month over month and 4.2% year over year in May. For the first half of the year, total sales were up by 4.66% year over year, while core sales increased by 4.93%. The monthly declines were the first since February when both total and core sales saw a decrease of 0.22% from January. On an annual basis, June sales increased in seven out of nine categories, led by digital products, sporting goods stores, and health and personal care stores; however, on a monthly basis, sales were down in all but one category. NRF chief economist Jack Kleinhenz recently cautioned that US tariff disputes and policy changes are causing 'anxiety and confusion,' contributing to economic uncertainty. Meanwhile, US President Donald Trump has 'threatened' fresh tariffs of 30% on imports from Mexico and the EU, starting 1 August 2025. Trump justified these measures on social media by pointing to drug trafficking issues with Mexico and longstanding trade imbalances with the EU. This announcement followed earlier warnings issued by Trump to more than 20 countries regarding potential tariffs ranging from 25% to 40%, set to take effect from August unless new bilateral trade agreements are reached. The countries affected include Japan, South Korea, and South Africa. "US clothing sales dip in June 2025 amid tariff concerns" was originally created and published by Just Style, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
20 minutes ago
- Yahoo
Deutsche Bank warns of sharp market reaction if tariff decision surprises
-- Deutsche Bank is cautioning investors about a potential wave of market volatility as the August 1 tariff deadline looms, warning that financial markets have yet to fully price in the risk of steep new tariffs. 'Markets are clearly not pricing in these higher tariffs, and we may only know the outcome in the final hours,' analysts wrote, adding that the result could be 'a very sharp market reaction and heightened volatility.' The tariff deadline, coupled with a U.S. jobs report on the same day, presents a dangerous setup, the bank said, reminiscent of the market turmoil seen in late July and early August 2024. After the expiration of a 90-day reciprocal tariff extension on July 9, new duties are set to rise sharply, 30% on EU goods, 35% on Canadian imports, and 50% on Brazilian products. 'Trump himself posted last week that 'No extensions will be granted,'' Deutsche Bank noted. The risks are said to be compounded by the fact that long-term U.S. Treasury yields are already elevated. 'It would take less of a jump before we move into problematic territory that re-ignites fears around fiscal policy,' the analysts wrote. Yields on the 30-year Treasury have climbed from 4.52% on April 1 to 4.97%. Deutsche Bank stressed that if the new tariffs are followed by a weak jobs report, 'that would easily resurrect fears around a US recession.' The firm also flagged additional catalysts for volatility, including a Fed decision, the U.S. Treasury's refunding announcement, and the second-quarter GDP print, all set for the same week. 'Given how much the new tariff deadline is being discounted by markets,' Deutsche Bank concluded, 'this is setting up a key period of event risk at the end of the month.' Related articles Deutsche Bank warns of sharp market reaction if tariff decision surprises NIQ Global targets $7.1 billion valuation in U.S. IPO Goldman Sachs starts Nebius at 'buy,' cites AI infrastructure strength Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
