-Global markets becoming desensitised to Trump's tariff shifts
Speaking on stage at the Reuters Next summit in Singapore, Fong said investors were no longer reacting as sharply to tariff changes and announcements.
"If you look at the tariff situation overall, I think the markets are starting to get a bit desensitised to all the output that might come, so to speak," Fong said.
To view the live broadcast of the World Stage go to the Reuters LIVE page: https://www.reuters.com/world/reuters-next-asia-live-global-leaders-address-challenges-opportunities-2025-07-07/
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The Independent
20 minutes ago
- The Independent
US-EU trade deal wards off further escalation but will raise costs for companies, consumers
President Donald Trump and European Commission President Ursula von der Leyen have announced a sweeping trade deal that imposes 15% tariffs on most European goods, warding off Trump's threat of a 30% rate if no deal had been reached by Aug. 1. The tariffs, or import taxes, paid when Americans buy European products could raise prices for U.S. consumers and dent profits for European companies and their partners who bring goods into the country. Here are some things to know about the trade deal between the United States and the European Union: What's in the agreement? Trump and von der Leyen's announcement, made during Trump's visit to one of his golf courses in Scotland, leaves many details to be filled in. The headline figure is a 15% tariff rate on 'the vast majority' of European goods brought into the U.S., including cars, computer chips and pharmaceuticals. It's lower than the 20% Trump initially proposed, and lower than his threats of 50% and then 30%. Von der Leyen said the two sides agreed on zero tariffs on both sides for a range of 'strategic' goods: Aircraft and aircraft parts, certain chemicals, semiconductor equipment, certain agricultural products, and some natural resources and critical raw materials. Specifics were lacking. She said the two sides 'would keep working' to add more products to the list. Additionally, the EU side would purchase what Trump said was $750 billion (638 billion euros) worth of natural gas, oil and nuclear fuel to replace Russian energy supplies, and Europeans would invest an additional $600 billion (511 billion euros) in the U.S. What's not in the deal? Trump said the 50% U.S. tariff on imported steel would remain; von der Leyen said the two sides agreed to further negotiations to fight a global steel glut, reduce tariffs and establish import quotas — that is, set amounts that can be imported, often at a lower rate. Trump said pharmaceuticals were not included in the deal. Von der Leyen said the pharmaceuticals issue was 'on a separate sheet of paper' from Sunday's deal. Where the $600 billion for additional investment would come from was not specified. And von der Leyen said that when it came to farm products, the EU side made clear that 'there were tariffs that could not be lowered,' without specifying which products. What's the impact? The 15% rate removes Trump's threat of a 30% tariff. It's still much higher than the average tariff before Trump came into office of around 1%, and higher than Trump's minimum 10% baseline tariff. Higher tariffs, or import taxes, on European goods mean sellers in the U.S. would have to either increase prices for consumers — risking loss of market share — or swallow the added cost in terms of lower profits. The higher tariffs are expected to hurt export earnings for European firms and slow the economy. The 10% baseline applied while the deal was negotiated was already sufficiently high to make the European Union's executive commission cut its growth forecast for this year from 1.3% to 0.9%. Von der Leyen said the 15% rate was 'the best we could do' and credited the deal with maintaining access to the U.S. market and providing 'stability and predictability for companies on both sides.' What is some of the reaction to the deal? German Chancellor Friedrich Merz welcomed the deal which avoided 'an unnecessary escalation in transatlantic trade relations" and said that 'we were able to preserve our core interests,' while adding that 'I would have very much wished for further relief in transatlantic trade.' The Federation of German Industries was blunter. "Even a 15% tariff rate will have immense negative effects on export-oriented German industry," said Wolfgang Niedermark, a member of the federation's leadership. While the rate is lower than threatened, "the big caveat to today's deal is that there is nothing on paper, yet," said Carsten Brzeski, global chief of macro at ING bank. 'With this disclaimer in mind and at face value, today's agreement would clearly bring an end to the uncertainty of recent months. An escalation of the US-EU trade tensions would have been a severe risk for the global economy," Brzeski said. 'This risk seems to have been avoided.' What about car companies? Asked if European carmakers could still sell cars at 15%, von der Leyen said the rate was much lower than the current 27.5%. That has been the rate under Trump's 25% tariff on cars from all countries, plus the preexisting U.S. car tariff of 2.5%. The impact is likely to be substantial on some companies, given that automaker Volkswagen said it suffered a 1.3 billion euro ($1.5 billion) hit to profit in the first half of the year from the higher tariffs. Mercedes-Benz dealers in the U.S. have said they are holding the line on 2025 model year prices 'until further notice.' The German automaker has a partial tariff shield because it makes 35% of the Mercedes-Benz vehicles sold in the U.S. in Tuscaloosa, Alabama, but the company said it expects prices to undergo 'significant increases' in coming years. What were the issues dividing the two sides? Before Trump returned to office, the U.S. and the EU maintained generally low tariff levels in what is the largest bilateral trading relationship in the world, with some 1.7 trillion euros ($2 trillion) in annual trade. Together the U.S. and the EU have 44% of the global economy. The U.S. rate averaged 1.47% for European goods, while the EU's averaged 1.35% for American products, according to the Bruegel think tank in Brussels. Trump has complained about the EU's 198 billion-euro trade surplus in goods, which shows Americans buy more from European businesses than the other way around, and has said the European market is not open enough for U.S.-made cars. However, American companies fill some of the trade gap by outselling the EU when it comes to services such as cloud computing, travel bookings, and legal and financial services. And some 30% of European imports are from American-owned companies, according to the European Central Bank.
Reuters
21 minutes ago
- Reuters
Breakingviews - EU's lopsided Trump trade deal will be short-lived
BERLIN, July 27 (Reuters Breakingviews) - European Union trade negotiators may promptly celebrate the success they have achieved by clinching a deal with Donald Trump. If so, the question should be: If that passes for success, what would failure have looked like? Financial markets and European captains of industry will doubtless heave a sigh of relief at the agreement, announced on Sunday by the U.S. president and his European Commission counterpart Ursula von der Leyen. The continent's main exporters can base their investment and commercial plans on the 15% levy on U.S. imports accepted by the Commission. That's much lower than the 30% charge on European goods Trump had promised to impose on August 1 in the absence of a deal, which in turn was less than a previous 50% threat. Importantly, the rate applies to European cars, which join Japanese-made vehicles in escaping the 25% charge on U.S. auto imports, and to the continent's pharmaceuticals and semiconductors, which may have otherwise faced punitive sector-specific treatment. The deal also enables the Europeans to shelve counter-tariffs and other measures they had lined up. Some degree of uncertainty has at least been dispelled. Nevertheless, the tariff level still amounts to capitulation by Brussels. It must be compared not to Trump's threats, but to the 1.47% average, opens new tab rate previously applied to European goods crossing the Atlantic. Only two months ago, several EU governments were warning, opens new tab that a 10% across-the-board charge, similar to what the UK had obtained, would be a red line that should trigger some form of response. In addition to the added trade friction, the EU has also promised to import more energy – spending $250 billion a year on American oil and gas – and could invest some $600 billion stateside. That, at least, is Trump's interpretation of the deal. It's unclear whether these figures represent incremental amounts, or what time frame the president had in mind. Fuzzy as they are, these EU pledges at least do not look very binding. Yet the vague agreement also suggests Sunday's announcement is unlikely to be the last word. Even at the lower rate, the tariffs will hurt the U.S. economy. They will either bring much-needed revenue — a source of pride for Treasury Secretary Scott Bessent – or shrink imports. But they cannot achieve both at the same time. And if EU businesses do crank up investment in the U.S., the resulting capital flows will be to the detriment of the trade balance. All this means the EU's trade surplus, opens new tab with the U.S., which reached 198 billion euros in goods last year, partly offset by a 109 billion euro deficit on services, may not shrink much in the coming years. When the impulsive and unpredictable president can no longer deny the destructive impact of his tariffs, he will be tempted to yet again blame U.S. trade partners. It's puzzling that the EU, the world's largest, opens new tab trading power, has failed to grasp that the best way to fight bullying is to stand your ground. Follow Pierre Briancon on Bluesky, opens new tab and LinkedIn, opens new tab.
Daily Mail
21 minutes ago
- Daily Mail
Golf date for Starmer and Trump as PM set to travel to Scotland to discuss ceasefire in Gaza
Sir Keir Starmer is expected to travel to Scotland for a meeting with Donald Trump on his golf course tomorrow to discuss a ceasefire in Gaza and an end to the war in Ukraine. The Prime Minister will make the journey up north to visit Trump Turnberry in Girvan, Ayrshire, where the US President has been playing golf since Saturday morning. Starmer and Trump are expected to discuss the prospect of a ceasefire in the Middle East and how to apply pressure on Vladimir Putin to end the war in Ukraine. They are also expected to talk one-on-one about advancing implementation of the UK-US trade deal, signed on May 8. The PM is also expected to welcome the President's administration working with Qatar and Egypt to bring about a ceasefire in Gaza. A Number 10 spokesperson said it was expected they will discuss 'what more can be done to secure the ceasefire urgently, bring an end to the unspeakable suffering and starvation in Gaza and free the hostages who have been held so cruelly for so long'. The war in Ukraine will also be up for discussion with both politicians 'set to talk about their shared desire to bring an end to the barbaric war' according to Number 10, and expected to 'reflect on progress in their 50-day drive to arm Ukraine and force Putin to the negotiating table '. After a meeting at the course, Starmer and Trump will travel on together for a further private engagement in Aberdeen. A government spokesperson said: 'The UK and the US have one of the closest, most productive alliances the world has ever seen, working together to cooperate on defence, intelligence, technology and trade. 'The UK was the first country to agree a deal with the US that lowered tariffs on key sectors and has received one of the lowest reciprocal tariff rates in the world. 'Businesses in aerospace and autos are already benefiting from the strong relationship the UK has with the US and the deal agreed on May 8. 'The Government is working at pace with the US to go further to deliver benefits to working people on both sides of the Atlantic and to give UK industry the security it needs, protect vital jobs, and put more money in people's pockets through the Plan for Change.'
