EU waits on Donald Trump letter as markets digest latest tariff salvo
The EU initially hoped to strike a comprehensive trade agreement, including zero-for-zero tariffs on industrial goods, but months of difficult talks have led to the realization it will probably have to settle for an interim agreement and hope something better can still be negotiated.
The 27-country bloc is under conflicting pressures as powerhouse Germany urged a quick deal to safeguard its industry, while other EU members, such as France, have said EU negotiators should not cave into a one-sided deal on US terms. After keeping much of the world guessing his intentions, Trump has outlined new tariffs for a number of countries, including allies Japan and South Korea, along with a 50% tariff on copper, and a hike to 35% on Canadian goods.
His cascade of tariff orders since returning to the White House has begun generating tens of billions of dollars a month in new revenue for the US government, and data due later on Friday is expected to show collections since inauguration day in January through June have shot past $100 billion - equal to or greater than the largest annual take ever from customs duties.
"We remain locked and loaded to sign an agreement with the US. Let's see what happens when our friends in Washington wake up a few hours from now," EU spokesperson Olof Gill told a briefing.
A source with knowledge of the US-EU negotiations said an agreement was close, but that it was hard to predict if the EU might still get a letter announcing more tariffs or when any agreement might be finalised.
An EU diplomat, speaking on condition of anonymity, said the EU was strong when it acted together. "It is important that the pain or gain is distributed equally. We cannot have just one country or sector that takes the win." European shares dipped on Friday as investors awaited word on tariffs for the EU, while US stocks dipped in response to the upsized tariff rate Trump announced for Canada late on Thursday. Gold prices, meanwhile, rose for a third straight session on higher demand for the safe-haven asset.
Investors appear increasingly inured to Trump's tariff announcements after having near-panic reactions to the earliest announcements in late winter and early spring.
Still, the jacked-up rates Trump unveiled out of the blue this week on Brazil and then Canada are emblematic of his unpredictable approach to rolling out the levies. The 35% tariff on Canada is an increase from the current 25% rate he had assigned and is a blow to Canadian Prime Minister Mark Carney, who was seeking to agree a trade pact with Washington.
According to Trump, the new rate will take effect on August 1 and could go up further if Canada retaliates.
"Throughout the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses. We will continue to do so as we work towards the revised deadline of August 1," Carney said on X.
The EU has drawn up countermeasures against Trump's tariffs, but has not imposed them. An initial 21 billion euros ($24.5 billion) of levies on US imports due in April was suspended before taking effect. Another package, on some 72 billion euros of US imports, could also be applied.
"Basically, if a political decision is made to extend the suspension, then we'll extend the suspension," Gill said.
"If we need to unsuspend it, we can do that, you know, at the drop of a hat," he added.
Elsewhere US Secretary of State Marco Rubio met with Chinese Foreign Minister Wang Yi in Kuala Lumpur on Friday, as the two powers vied to push their agendas in Asia.
Both sides described the meeting as constructive.
China this week warned the United States against reinstating hefty levies on its goods next month and Beijing has also threatened to retaliate against nations that strike deals with the United States to cut China out of supply chains.
Trump has periodically railed against the EU, saying in February that it was "formed to screw the United States" and asking why Europe exports so many cars but buys so few from the US in return.
His biggest grievance is the US merchandise trade deficit with the EU, which in 2024 amounted to $235 billion, according to US Census Bureau data. The EU has repeatedly pointed to the US surplus in services that in part redresses the balance.
The potential escalation between the EU and the US is a big deal for financial markets, said Joseph Capurso, head of international economics at the Commonwealth Bank of Australia. "If you get something similar to (the U.S.-China trade war in April), that's going to be very destabilizing."
Agencies
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Khaleej Times
an hour ago
- Khaleej Times
'I can travel the world': Why UAE residents want US visa despite additional fee
An additional fee of $250 to apply for a US visa may not stop UAE residents from applying, as many believe it still offers various other benefits. From ease of travelling to many countries to visa-free entries in other countries, residents said the long-term benefits are more with multiple trips to the US. Mohammad Sajid, a businessman living on Al Maktoum Road, said the visa has added a lot of value for his travel plans. 'I got the US visa mainly for a business trip to New York, but now I have used it to visit Mexico and even got my other countries' visas easily because of it,' said Sajid. As part of a major immigration reform bill, US President Donald Trump earlier this month signed into law the 'one big beautiful bill', which includes a new 'Visa Integrity Fee'. This fee adds $250 on top of the existing $185 non-immigrant visa fee, bringing the total cost to at least $435 for applicants. The amount could rise in future based on inflation. The charge applies to all non-immigrant visa categories, tourist, student, or work, and cannot be waived, although in certain cases, it may be reimbursed. Despite the additional cost, Sajid believes people will still apply because of the long validity the visa offers. 'It is valid for 10 years. You pay once and can use it so many times. Unlike the Schengen visa, which costs hundreds of dirhams and is often valid only for a few weeks or months.' Saeed Hashim, a resident of Al Barsha and a finance professional who got his US visa a few years ago, said that the visa helped him to visit other countries without hassle. 'I have used my US visa for more than just America,' he said. 'Turkey, the Dominican Republic, and other countries allow e-visas or visa-free entry if you have a valid US visa. It saves you the headache of applying for new visas again and again.' He added that his visa also helped during long airport layovers. 'I once had a 12-hour layover in Chicago. We left the airport, saw the city, had dinner, and came back. You can't do that in most countries without a visa.' Travel industry executives said that because of added benefits, the demand will not dip despite the higher fee. 'People were paying $185 for US visa and this new fee will not make much of a difference. It won't really affect serious applicants,' said Subair Thekepurathvalappil, senior manager at Wisefox Tourism. 'When you apply with a good salary and proper documents, a US visa becomes a strong credential. It makes getting other visas much easier, and for many countries like Turkey or even Georgia, it opens doors to e-visas or visa-free travel,' said Subair. 'For example, a Turkey visa can cost you Dh765 in total, and you still need to submit your passport to the embassy. But if you already have a US visa, you can get an e-visa instantly,' added Subair. He further said that the visa allows for smooth transit through airports across the world. 'We have seen people willing to wait a year for a US visa appointment and that shows how valuable it is.' Pavan Poojari, travel consultant at Luxury Travels, said they are watching the situation closely. 'Right now, we are in a bit of a wait-and-watch mode. The US systems are undergoing updates, and currently, we don't have full access to the new visa application system.' He said that there is a lot of anticipation in the travel industry and everyone wants to know what changes might be introduced. 'We are monitoring the situation and are hopeful that the new system will be operational very soon. Once it's live, there will be more clarity and efficiency in the process.'
Dubai Eye
4 hours ago
- Dubai Eye
Trump visits Texas flood zone, defends government's disaster response
US President Donald Trump defended the state and federal response to deadly flash flooding in Texas on Friday as he visited the stricken Hill Country region, where at least 120 people, including dozens of children, perished a week ago. During a roundtable discussion after touring Kerr County, the epicentre of the disaster, Trump praised both Texas Governor Greg Abbott and Homeland Security Secretary Kristi Noem for their response, saying they both did an "incredible job." The Trump administration, as well as local and state officials, has faced mounting questions over whether more could have been done to protect and warn residents ahead of the flooding, which struck with astonishing speed in the pre-dawn hours on July 4, the US Independence Day holiday. Trump reacted with anger when a reporter said some families affected by the floods had expressed frustration that warnings did not go out sooner. "I think everyone did an incredible job under the circumstances," he said. "I don't know who you are, but only a very evil person would ask a question like that." Some critics have questioned whether the administration's spending cuts at the National Weather Service and the Federal Emergency Management Agency, which coordinates the US government's disaster response efforts, might have exacerbated the calamity. Trump officials have said that cuts had no impact on the NWS's ability to forecast the storms, despite some vacancies in local offices. But the president has largely sidestepped questions about his plans to shrink or abolish FEMA and reassign many of its key functions to state and local governments. "I'll tell you some other time," Trump said on Tuesday, when asked by a reporter about FEMA. Before the most recent flooding, Kerr County declined to install an early-warning system after failing to secure state money to cover the cost. Lawrence Walker, 67, and a nearly three-decade veteran resident of Kerrville, said the county and state had not spent enough on disaster prevention, including an early-warning system. Asked about the quality of the government response, he said, "It's been fine since the water was at 8 feet." The Texas state legislature will convene in a special session later this month to investigate the flooding and provide disaster relief funding. Abbott has dismissed questions about whether anyone was to blame, calling that the "word choice of losers." DOZENS STILL UNACCOUNTED FOR Search teams on Friday were still combing through muddy debris littering parts of the Hill Country in central Texas, looking for the dozens still listed as missing, but no survivors have been found since the day of the floods. Heavy rains sent a wall of water raging down the Guadalupe River early on July 4, causing the deadliest disaster of the Republican president's nearly six-month term in office. As sun poked through dark clouds on Friday morning, search crews in hard hats painstakingly walked inch-by-inch along the ruined banks of the river, marking damage and looking through wreckage. After the president arrived in Kerr County in the early afternoon, Trump, first lady Melania Trump and Texas Governor Greg Abbott drove to an area near the river, where Trump received a briefing from first responders amid debris left in the wake of the flood. The county is located in what is known as "flash flood alley," a region that has seen some of the country's deadliest floods. More than a foot of rain fell in less than an hour on July 4. Flood gauges showed the river's height rose from about a foot to 34 feet (10.4 metres) in a matter of hours, cascading over its banks and sweeping away trees and structures in its path. Kerr County officials say more than 160 people remain unaccounted for, although experts say that the number of people reported missing in the wake of disasters is often inflated. The dead in the county include 67 adults and at least 36 children, many of whom were campers at the nearly century-old Camp Mystic, an all-girls Christian summer retreat on the banks of the river. Jon Moreno, 71, a longtime Kerrville resident whose property on high ground was spared, praised the government response - local and federal. He has heard the debate about what more could have been done - including sirens - but said he did not think it would have made much difference, given people's desire to build along the flood-prone riverbanks. "It's unavoidable," he said. "All those people along the river - I wouldn't want to live there ... It's too dangerous." At Stripes, a gas station in Kerrville, the building was tagged in large white letters, accusing "Trump's Big Beautiful Bill" of cutting "our emergency funding." The president's massive legislative package, which cut taxes and spending, won approval from the Republican-controlled Congress last week and was signed into law by Trump on the same day that the flooding hit Texas.
Dubai Eye
4 hours ago
- Dubai Eye
Crystal Palace dropped to UEFA's Conference League in multi-club ownership case
Premier League side Crystal Palace have been dropped in European competition to the third-tier Conference League in a multi-club ownership case, while Olympique Lyonnais will be allowed to play in the Europa League, UEFA said on Friday. Palace had qualified for the Europa League by winning the FA Cup last season, while Lyon reached the competition by finishing sixth in Ligue 1. A move to relegate them to France's domestic second-tier Ligue 2 over their poor finances was overturned on Wednesday, a decision UEFA's Club Financial Control Body (CFCB) had been waiting for before ruling on the multi-club ownership case. "Consequently, the CFCB First Chamber pursued the assessment of the documentation submitted by Olympique Lyonnais and Crystal Palace and concluded that the clubs breached, as at 1 March 2025, the multi-club ownership criteria," UEFA said in a statement. As both Lyon and Palace had qualified for the Europa League, the French club were allowed to keep their place as they finished higher in their respective league, with Palace finishing 12th in the Premier League. The Eagle Football Group are majority owners of Lyon while its chairman John Textor also owns a controlling stake in Palace. Textor later resigned from Lyon's board of directors with Michele Kang appointed chairwoman and president. Palace said last month that New York Jets co-owner Robert Wood "Woody" Johnson had signed a legally binding agreement to buy Eagle Football Holding's stake in the Premier League club, subject to approval from the Premier League. However, Palace had missed the March deadline to comply with the multi-club ownership rules. "Honestly, I am stunned. We did everything possible to separate from the club, as UEFA would ask, with a sale process that began before the deadline, and a sale that will occur well before the draw," Textor told Reuters. "Now we have sold out of a club that I love, to help Palace fans continue this dream year, only to have another off-the-pitch decision lay waste to an historic sporting victory." Lyon had been demoted by the DNCG, French football's financial watchdog, in November due to the poor state of their finances but their relegation to Ligue 2 was overturned by its appeals committee. Palace can still appeal against the decision at the Court of Arbitration for Sport but if UEFA's decision stands, the rules could allow Nottingham Forest to play in the Europa League if they fulfil the admission criteria. Forest had finished seventh last season and originally qualified for the Conference League while fifth-placed Aston Villa and Palace had qualified for the Europa League. Palace chairman Steve Parish was also shocked by the decision. "We're devastated. It's a bad day for football. It's a terrible injustice," Parish told Sky Sports. "I do believe nobody wants to see this. I don't think UEFA wants to see this. We've been locked out of a European competition on the most ridiculous technicality. Supporters of all clubs should be devastated for us. "Everyone knows we're not part of a multi-club set-up. We're caught up in a rule that wasn't put there for us. This is a ludicrous decision. We will ask the appeal court to listen to our argument." The rules say no club may hold or deal in securities or shares of any other club participating in UEFA's competitions and that no club can be a member of any other club participating in UEFA competitions.
