Germany's Merz welcomes EU trade deal with US
'We have thus managed to preserve our fundamental interests, even if I would have wished for more relief in transatlantic trade,' he said in a statement released soon after the deal was announced.
The agreement sets 15 per cent tariffs on most exports from the European bloc. The United States is Germany's main trading partner.
Merz said he was particularly relieved for the car industry, which before Sunday's accord was facing tariffs of 27.5 per cent.
In addition to cars, Germany's chemical and machinery industries are particularly dependent on exports to the United States.
And Germany's powerful BDI federation of industrial groups said the accord would have 'considerable negative repercussions' and sent 'a fatal signal to the closely interdependent economy on both sides of the Atlantic'.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
Germany's chemical trade association VCI said the accord left rates 'too high'.
'When one expects a hurricane, you rejoice at a simple storm,' it said in a statement. 'An escalation was avoided, but the cost is high for both sides.'
The country's BGA exporters association called it a 'painful compromise' that creates an 'existential threat' for many companies.
Clemens Faust, head of the prestigious IFO economic institute, said the agreement represented a 'humiliation for the EU that reflects the imbalance in power'.
There are still many details in the accord that need to be ironed out, and the Chancellor expressed his 'full support' for the European Commission 'for the negotiations that will now begin'.
German Finance Minister Lars Klingbeil said the agreement was 'a good thing as a first step.
'We will now assess the outcome of the negotiations and its impact on the economy and employment in Germany,' he added. AFP
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
an hour ago
- Business Times
As Trump's tariffs bite, investors should ensure the companies they own have strong fundamentals
[SINGAPORE] It seemed like Groundhog Day again when US President Donald Trump unveiled revised reciprocal tariffs on imports from dozens of countries last Thursday (Jul 31). The adjusted rates came just one day before the previously announced reciprocal tariffs were due to kick in; the new duties will take effect only on Aug 7. To me, it initially appeared that Trump was once again delaying the full implementation of his tariffs while maintaining pressure on America's trading partners to open their markets. Some observers think Trump might be reaching his endgame on the country-specific tariffs, though. This could be good news. The revised tariff rates for many countries are, with a few notable exceptions, below the rates announced on Apr 2. For instance, the reciprocal tariffs on the European Union, Japan and South Korea are now all down to 15 per cent, from 20 per cent, 24 per cent and 25 per cent, respectively. India is down to 25 per cent from 26 per cent. Closer to home, reciprocal tariffs on Cambodia, Indonesia and Malaysia are now all down to 19 per cent, from 49 per cent, 32 per cent, 24 per cent, respectively. The reciprocal tariff on the Philippines is now also 19 per cent, although this is up from the 17 per cent announced on Apr 2. Vietnam is down to 20 per cent, from 46 per cent previously. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The bad news, however, is that these revised tariffs would still add to the squeeze on global trade when they are implemented. By some estimates , the revised tariffs will push the average US tariff rate up to 15.2 per cent – from 13.3 per cent currently, and from only 2.3 per cent back before Trump took office. The economic impact of higher tariffs was blunted in the first half of 2025 by US importers front-loading their orders. Market sentiment has also been buoyed by massive investment in the artificial intelligence field. The remaining months of the year will probably be tougher for investors. Trump's tariffs are likely to create a demand shock in Asia, resulting in slower growth and deflation. On the other hand, the US could suffer a supply shock that results in slower growth as well as higher inflation – leading to politically charged policy dilemmas. Politics and policymaking Last week, Trump ramped up his campaign to oust Federal Reserve chair Jerome Powell for refusing to cut rates, insinuating during a visit to the Fed's headquarters that the cost of renovating its buildings was out of control. Trump also fired the commissioner of the US Bureau of Labor Statistics (BLS) last week, after US job numbers for July came in weaker than expected . The BLS said on Aug 1 that total nonfarm payroll employment increased by only 73,000 last month. Adjustments for the previous two months were also larger than normal. Revised data showed US employers added only 19,000 jobs in May and 14,000 jobs in June, versus the previously reported 144,000 jobs and 147,000 jobs, respectively, for the two months. These political overtones could make it all the more complicated for investors to navigate the markets in the months ahead, as the full impact of Trump's tariffs is felt on growth, inflation and corporate earnings. At its policy meeting on Jul 29-30, the Fed decided to hold the target range for the federal funds rates unchanged, at between 4.25 per cent and 4.5 per cent. Two members of the 12-person rate-setting committee – Michelle Bowman and Christopher Waller – preferred a 25-basis-point cut and voted against the decision. This was reportedly the first time since 1993 that two members dissented at a single meeting. A third member, Adriana Kugler, was absent and did not vote. On Aug 1, the Fed said Kugler had submitted her letter of resignation to Trump and would step down on Aug 8. She has served as a governor of the Fed since 2023. Tariff impact in 'early days' Powell said during the post-meeting press conference that the impact of the tariffs on inflation is not only uncertain, but is probably still in its 'early days'. 'What we're seeing now is substantial amounts of tariff revenue being collected, on the order of US$30 billion a month,' he said, adding that most of this is currently being paid by companies that are 'upstream from the consumer'. Powell went on to say that many companies have indicated their intention to eventually push the cost of the tariffs onto their customers. 'But, you know, the truth is they may not be able to in many cases.' The state of the US labour market is also something of a puzzle. While the pace of job creation has been weakening, the unemployment rate in July was little changed from previous months, at 4.2 per cent. 'What that's telling you is that demand for workers is slowing, but so is the supply,' Powell said. He added, 'Because of immigration policy, really, the flow into our labour force is just a great deal slower.' This suggests underlying weakness in the seemingly robust US economy. 'I think you've got downside risks in a world where unemployment is being held down because both demand and supply are declining. And, I think that it's worth paying close attention to it,' Powell said. Less forgiving markets These macro concerns do not appear to be hurting the US corporate earnings for now, though. On Aug 1, financial data provider FactSet said 82 per cent of the S&P 500 companies that have reported their results for Q2 2025 delivered positive earnings-per-share (EPS) surprises. Also, 79 per cent achieved positive revenue surprises. The market is, however, rewarding positive surprises slightly less than it has in the past, and punishing negative surprises more severely. S&P 500 companies that have reported positive earnings surprises for Q2 2025 have seen an average stock price increase of 0.9 per cent over the period spanning two days before their earnings release and two days after. This is below the five-year average of a 1 per cent increase. On the other hand, S&P 500 companies that reported negative earnings surprises for Q2 2025 have seen an average price decrease of 5.6 per cent – versus a five-year average price decline of 2.4 per cent. Among the notable losers last week was Apple, which saw its shares tumble 5.4 per cent despite reporting financial numbers that topped expectations . The S&P 500 ended last week 2.4 per cent lower. The Nasdaq 100 was down 2.2 per cent. The Singapore market was equally unforgiving last week, with the Straits Times Index suffering a 2.5 per decline. Among the notable losers was Seatrium – which ended last week 5.4 per cent lower, despite reporting sharply higher revenue and earnings for H1 2025 and drawing a line under its past involvement in a corruption scandal in Brazil. Singapore Airlines fell 9.9 per cent during the week, after reporting a steep slump in earnings for the quarter to Jun 30 that seemed to catch analysts off-guard and sparked a wave of 'sell' recommendations . Then, there was OCBC – the first of the three local banks to report financial numbers for H1 2025 – which suffered narrower net interest margins as interest rates sank. OCBC ended last week 2.3 per cent lower. DBS and UOB, which are both scheduled to report their H1 2025 numbers on Aug 7, ended last week down 3 per cent and 2.9 per cent, respectively. As Trump's tariffs begin to bite, investors should carefully parse the financial statements of companies in their portfolios to ensure their micro fundamentals are strong enough to weather the tough months ahead.
Business Times
3 hours ago
- Business Times
Ninth generation Pictet family member of leading the group beyond 220 years.
[GENEVA] Striving not for size but 'to be the finest, as a wealth and asset manager known for superior returns and exceptional client experience' is what drives 46-year-old Francois Pictet, managing partner of Pictet Group. He is a ninth-generation member of a family who became associated with Pictet Group in 1841. The Geneva-headquartered organisation, which turns 220 this year, traces its roots even further back, to its founding in July 1805. Francois Pictet followed the footsteps of his father, grandfather and great-grandfather into the top echelons of the group's management. Today, Pictet Group is Switzerland's second-largest financial institution, behind UBS, and the largest privately held financial institution in Europe. Francois Pictet sits alongside his cousin, senior partner Marc Pictet, and five other managing partners at the apex of the company's management. The seven top partners – six men and one woman, all of whom are based in Geneva – are a close-knit group, who meet thrice a week, for several hours per session, to discuss strategies and investments. 'You cannot invite as managing partners people who want to decide everything and don't want to listen to others. This type of profile will not make it,' said Francois Pictet. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up He pointed out that while Pictet Group is unique in having a long association with his wider family, having the name alone does not mean guaranteed entry into the group's top leadership. In addition to the seven managing partners, Pictet Group also has 43 equity partners. New partners buy shares at book value; when partners exit, they sell their shares at book value, which has hopefully grown during their tenure. Partners adhere to the retirement age of 65. To date, Pictet Group has grown organically and not done any mergers and acquisitions. Also, the group has stayed out of business lines such as commercial banking, retail banking and investment banking. 'Why would you make an acquisition unless you want to show growth to your shareholders? In finance, growth by hiring the right people is more effective,' said Francois Pictet, adding that making acquisitions can harm the corporate culture. He likes the group's business model, which he sees as being differentiated from other financial institutions and bringing stability to the business and clients. 'Stability nowadays is in very rare supply, and I think this is a key advantage that we have,' he said. He argued that by being conservative in how Pictet Group uses its balance sheet, space is freed up to be innovative in serving clients. 'Our usage of the balance sheet is extremely conservative, we don't play with it at all,' he said. Personal journey Francois Pictet, who became a managing partner in 2022, currently leads the group's technology and operations division, as well as the private wealth management's Asian and Middle East commercial efforts. Trained in law, he said that it was 'initially not really my intention' to join the family business. He spent over a decade working for organisations including UBS, the former Credit Suisse and US private equity firm AEA Investors before joining Pictet Group in 2015. Asked if carrying the Pictet name within Pictet Group is a privilege or a burden, he admitted that 'with the family name comes the pressure as well'. He described working at Pictet Group as being at 'a place where you have your name on the door and the responsibility of not undoing the work done by eight generations before you'. Still, when the opportunity to join the group came while he was in his thirties, he said it would have been a waste not to seize it. With Pictet Group today being considerably larger than in his father's time, Francois Pictet thinks family members who want to join now or in future should spend some years outside the group to chalk some achievements before coming on board. 'It's very important for our managing partners to have seen the world out there and also proven themselves outside the firm,' he said. In the private wealth management business, Pictet Group serves clients with a net worth of five million Swiss francs (S$8 million) or more. Francois Pictet sees no reason to lower this threshold for the sake of acquiring a larger customer base. He emphasised that in the private wealth management business, much time is spent on understanding clients and their worry with money. Investment solutions then come on the back of understanding client needs. He noted this is unlike 'the brokerage model, where you start the discussion by talking about products'. 'Our time horizon is not a quarter, not even 10 years. It is really generations with our clients,' he stressed. Francois Pictet noted that amid geopolitical fragmentation, wealthy families have become more mobile, requiring all sorts of combinations of booking and servicing centres. With its stability, he observed that Singapore has been on the rise as a booking centre for the whole of Asia for several years. Other megatrends that he sees in the private wealth management business include generational wealth transfer, the rise of Asia, the growing importance of private equity and the need to invest more in technology as well as risk and compliance. Generational wealth transfer Honora Ducatillon, head of family advisory at Pictet Wealth Management, said that with dynastic families, Pictet Group is seeing growing demand for help in crafting a family charter, as a framework for long-term success. Dynastic families are defined as those having a net worth of US$100 million or more. Typically, a family charter may cover areas such as family mission, family values, code of conduct, conflict resolution, succession in ownership and management, governance bodies, access to capital, family members, employment, ownership policy and education of family members. Ducatillon said wealthy families are evolving with trends such as longevity and the rise of the 100-year-old chief executive. Also contributing to this evolution are accelerating shifts in sociocultural values; the increase in blended families; the rise of women wealth owners, the move from top-down to collaborative governance models; and technology's role in transforming how families institutionalise wisdom across generations. Citing a McKinsey report, she noted that some US$5.8 trillion in assets will be transferred across generations in Asia-Pacific between 2023 and 2030 by wealthy families, and that many family offices report that preparing the next generation to take on wealth responsibly is a major challenge.
Straits Times
5 hours ago
- Straits Times
Israel PM says in ‘profound shock' over hostage videos
Sign up now: Get ST's newsletters delivered to your inbox Israeli PM Benjamin Netanyahu spoke 'at length' with the hostages' families on Aug 2, decrying 'the cruelty of Hamas'. JERUSALEM - Israeli Prime Minister Benjamin Netanyahu spoke with relatives of two hostages held in Gaza seen in videos released by Palestinian militant groups, expressing his 'profound shock' over the images, his office said. Since July 31 , Hamas and its ally Islamic Jihad have released three clips showing two hostages taken during the Oct 7, 2023, attack on Israel that triggered the ongoing war in Gaza. The images of Mr Rom Braslavski and Mr Evyatar David, looking emaciated after nearly 22 months of captivity, have sparked strong reactions among Israelis, fuelling renewed calls to reach a truce and hostage release deal without delay. 'The prime minister expressed profound shock over the materials distributed by the terror organisations Hamas and Palestinian Islamic Jihad, and told the families that the efforts to return all our hostages are ongoing, and will continue constantly and relentlessly,' said a statement from Mr Netanyahu's office released late on Aug 2 . Earlier in the day, tens of thousands of people had rallied in the coastal hub of Tel Aviv to urge Mr Netanyahu's government to secure the release of the remaining hostages. In the footage shared by the Palestinian Islamist groups, 21-year-old Braslavski, a German-Israeli dual national, and 24-year-old David both appear weak and malnourished. The videos make references to the dire humanitarian conditions in Gaza, where UN-mandated experts have warned a 'famine is unfolding'. Israeli newspapers dedicated their front pages o n Aug 3 to the plight of the hostages, with Maariv decrying 'hell in Gaza' and Yedioth Ahronoth showing a 'malnourished, emaciated and desperate' David. Right-wing daily Israel Hayom said that Hamas' 'cruelty knows no bounds', while left-leaning Haaretz declared that 'Netanyahu is in no rush' to rescue the captives. 'Abuse' Mr Netanyahu, according to his office, spoke 'at length' with Mr Braslavski and Mr David's families on Aug 2 , decrying 'the cruelty of Hamas'. He accused the group of 'deliberately starving our hostages' and documenting them 'in a cynical and evil manner'. Israel, meanwhile, 'is allowing the entry of humanitarian aid to the residents of Gaza', Mr Netanyahu said. Reiterating Israel's stance that it was not to blame for the humanitarian crisis, Mr Netanyahu said 'the terrorists of Hamas are deliberately starving the residents of the Strip' by preventing them from receiving the aid that enters Gaza. The Israeli premier, who has faced mounting international pressure to halt the war, called on 'the entire world' to take a stand against what he called 'the criminal Nazi abuse perpetrated by the Hamas terror organisation'. Mr Braslavski and Mr David are among 49 hostages seized during Hamas' 2023 attack who are still being held in Gaza, including 27 the Israeli military says are dead. Most of the 251 hostages taken in the attack have been released during two short-lived truces in the war, some in exchange for Palestinians in Israeli custody. The Hamas attack resulted in the deaths of 1,219 people, mostly civilians, according to a tally based on official figures. Israel's campaign in Gaza has killed at least 60,430 people, also mostly civilians, according to figures from the Hamas-run territory's health ministry, deemed reliable by the UN. Israel has heavily restricted the entry of aid into Gaza, already under blockade for 15 years before the ongoing war. Overnight from Aug 2 to 3 , air raid sirens sounded in Israeli communities near the Gaza border, with the military saying that 'a projectile that was launched from the southern Gaza Strip was most likely intercepted'. AFP
