Buying US weapons will help ease trade war: EU leader
In an interview with The Wall Street Journal, Costa said European countries will be buying more U.S. arms, thereby reducing the trade deficit — a key sticking point for President Trump as America and the 27-country bloc seek to strike a deal by July 9.
'Of course, a large part of this 5 percent will be spent for sure buying American, and it helps to rebalance the trade relations,' Costa told the Journal about the new defense-spending pledge.
'This agreement in NATO paved the way to have an agreement as soon as possible on trade,' he added.
NATO leaders last week agreed to a massive hike in defense spending after facing significant pressure from Trump.
The 32 leaders issued a joint statement following the summit saying, 'Allies commit to invest 5 percent of GDP annually on core defense requirements as well as defense- and security-related spending by 2035 to ensure our individual and collective obligations.'
'On defense, it's solved,' Costa said to the Journal. 'On trade, the point is we have a large imbalance in our relations.'
Pressure has increased in recent weeks as the U.S. and EU work to strike a trade agreement by July 9 that would avoid the 50 percent tariffs that Trump previously announced and subsequently delayed.
Trump has frequently criticized America's persistent trade deficit with the European Union, which was a record $161 billion last year, according to the U.S. Commerce Department.
'If we invest more on defense and if we buy more American goods, of course, this has a positive impact' in reducing the trade deficit, Costa said to the Journal.
Not all European leaders agree with Costa's expectation. French President Emmanuel Macron said last week that he hopes military spending will benefit European industries, the Journal reported.
'We have truly a European preference,' Macron said.
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Los Angeles Times
3 minutes ago
- Los Angeles Times
International charities and NGOs call for end to controversial Israeli-backed aid group in Gaza
CAIRO — Dozens of international charities and non-governmental organizations, including Oxfam, Save the Children and Amnesty, called Tuesday for an Israeli and U.S.-backed aid mechanism for Gaza to disband over repeated incidents of chaos and deadly violence against Palestinians heading toward its sites. At least seven Palestinians were killed seeking aid in southern and central Gaza between late Monday and early Tuesday. The deaths came after Israeli forces killed at least 74 people in Gaza earlier Monday with airstrikes that left 30 dead at a seaside cafe and gunfire that left 23 dead as Palestinians tried to get desperately needed food aid, witnesses and health officials said. Next week, Israeli Prime Minister Benjamin Netanyahu will travel to Washington to meet President Trump and other administration officials. Netanyahu's visit comes as Trump has signaled he is ready for Israel and Hamas to wind down the war in Gaza, which is likely to be a focus of their talks. The war has killed over 56,000 Palestinians, according to Gaza's Health Ministry, which does not distinguish between civilians and combatants but says more than half of the dead were women and children. The health ministry on Tuesday afternoon said the bodies of 116 people killed by Israeli strikes had been brought to hospitals in Gaza over the past 24 hours. The Hamas attack in October 2023 that sparked the war killed some 1,200 people, mostly civilians, and took 251 others hostage. Some 50 hostages remain, many of them thought to be dead. More than 165 major international charities and non-governmental organizations, including Oxfam, Save the Children and Amnesty, on Tuesday called for an immediate end to the Gaza Humanitarian Fund. 'Palestinians in Gaza face an impossible choice: starve or risk being shot while trying desperately to reach food to feed their families,' the group said in a joint news release. The call by the charities and NGOs was the latest sign of trouble for the Gaza Humanitarian Fund, a secretive U.S. and Israeli-backed initiative headed by an evangelical leader who is a close ally of Trump. The Gaza Humanitarian Fund started distributing aid on May 26, following a nearly three-month Israeli blockade that has pushed Gaza's population of more than 2 million people to the brink of famine. In a statement Tuesday, the organization said it has delivered more than 52 million meals over five weeks. 'Instead of bickering and throwing insults from the sidelines, we would welcome other humanitarian groups to join us and feed the people in Gaza,' the statement said. 'We are ready to collaborate and help them get their aid to people in need. At the end of the day, the Palestinian people need to be fed.' Last month, the organization said there has been no violence in or around its distribution centers and that its personnel have not opened fire. Israel's foreign ministry did not immediately respond to a request for comment Tuesday. According to Gaza's Health Ministry, more than 500 Palestinians have been killed around the chaotic and controversial aid distribution program over the past month. Palestinians are often forced to travel long distances to access Gaza Humanitarian Fund hubs in hopes of obtaining aid. The humanitarian fund is the linchpin of a new aid system that wrested distribution away from aid groups led by the U.N. The new mechanism limits food distribution to a small number of hubs under guard of armed contractors, where people must go to pick it up. Currently four hubs are set up, all close to Israeli military positions. Israel had demanded an alternative plan because it accuses Hamas of siphoning off aid. The United Nations and aid groups deny there is significant diversion. They reject the new mechanism, saying it allows Israel to use food as a weapon, violates humanitarian principles and won't be effective. The Israeli military said it had recently taken steps to improve organization in the area. Israel says it only targets militants and blames civilian deaths on Hamas, accusing the militants of hiding among civilians because they operate in populated areas. At least seven Palestinians were killed late Monday and early Tuesday in three separate locations while seeking aid, hospitals said. Three of the deaths by Israeli fire occurred in Gaza's southern city of Khan Yunis, while four were killed in central Gaza. More than 65 others were wounded, according to the Awda hospital in the Nuseirat refugee camp, and the Al-Quds hospital in Gaza City, which received the casualties. The casualties were among thousands of starved Palestinians who gather at night to take aid from passing trucks in the area of the Netzarim route in central Gaza. Meanwhile, an 11-year-old girl was killed Tuesday when an Israeli strike hit her family's tent west of Khan Yunis, according to the Kuwait field hospital that received her body. And the U.N. Palestinian aid agency said Israel's military struck one of its schools sheltering displaced people in Gaza City on Monday. The strike left no casualties but caused significant damage to the facility, UNRWA said. Speaking to a meeting of his Cabinet on Tuesday, Netanyahu did not elaborate on the contents of his upcoming Washington visit, except to say he will discuss a trade deal. Iran, following the 12-day war with Israel, is also expected to be a main topic of discussion. After brokering a ceasefire between Iran and Israel, Trump has signaled that he's turning his attention to bringing a close to the fighting between Israel and Hamas. The Palestinian Health Ministry in the occupied West Bank said Israeli forces killed two Palestinians in the territory, including a 15-year-old, in two separate incidents. The Israeli military had no immediate comment on the teen's shooting. In the second incident, it said a 'suspicious individual' was seen trying to cross into Israel from the southern West Bank, prompting soldiers to open fire. The Shifa hospital in Gaza City suspended services at the dialysis unit amid a shortage of fuel required to operate power generators, the Health Ministry announced on Tuesday. The unit provides treatment to dozens of kidney failure patients in northern Gaza. It called for international agencies to press Israel to quickly allow the delivery of fuel to Shifa and other overwhelmed hospitals across Gaza. 'The continued lack of fuel means the inevitable death of all patients and wounded in hospitals,' it said. Mourners held Muslim funeral prayers Tuesday for seven people from the same family who were killed in an airstrike the previous day in central Gaza. The strike hit a family house in the central town of Zawaida late Monday, killing two parents, two siblings and three grandchildren, according to Al-Aqsa Martyrs Hospital in the nearby town of Deir al-Balah, which received the casualties. Magdy writes for the Associated Press. Tia Goldenberg in Jerusalem contributed to this report.
Time Business News
3 minutes ago
- Time Business News
How Fed and ECB Shifts Are Reshaping Emerging Markets and Currencies in 2025
Reinvention of Fed and ECB changes in the global economy by shaping the economy of the emerging markets and currencies is one of the most influential trends in 2025. The ripple effect of the U.S Federal Reserve (Fed) and European Central Bank (ECB) as they begin to balance their monetary stance as they respond to inflation, growth concerns, and stability of financial markets is felt amongst the developing countries, especially strongly. Whether it be capital flow adjustments down to currency revaluation, such policy adjustments are redrawing the map of investors, governments, and central banks in the emerging economies. Also Read About How Fed and ECB Shifts Are Reshaping Emerging Markets and Currencies in 2025 Following a string of international volatility, in the form of the pandemic to energy crises, emerging markets (EMs) have become a cross-section of utopia and risk. The Fed tightening up and the ECB tightening leave an uneven and complicated situation amongst EMs as they attempt to lure investment, keep exchange rates constant, and promote growth. Also Read About How to Invest in Crypto for Beginners As rate hikes continued violently to restrain inflation in 2022 to 2023, the Fed started the process of cutting interest rates in late 2024. By 2025, the central bank will have also changed tone to be more dovish by lowering rates slowly as inflation is nearing the target level of 2%. This transition plays an important role in the emerging markets. Last year, EMs lost investors as high interest rates in the U.S. led investors in search of safer and more profitable assets in the U.S Capital inflows again: EM ETFs and bonds are back on the radar, particularly in asset classes of countries with sound fundamentals. EM ETFs and bonds are back on the radar, particularly in asset classes of countries with sound fundamentals. Currency Strength: The dollar strength has reached a band where the pressure is being relieved as the EM currencies, which include the Brazilian Real and Indian Rupee, are now recovering. The dollar strength has reached a band where the pressure is being relieved as the EM currencies, which include the Brazilian Real and Indian Rupee, are now recovering. Decreased Debt Costs: A weaker USD is the windfall that many EMs with dollar-denominated debt today enjoy, since this situation helps them to repay the debt more easily. Countries like India, Mexico, and Indonesia have become some of the countries where foreign investors have become more interested and whose borrowing pressures have dropped. The European Central Bank, unlike the Fed, is remaining hawkish till the early 2025 period because of the continued inflation, which is seen in terms of wages and energy. Despite the rather low European expansion, the ECB maintains some sporadic increases in rates in order to maintain price market stability. This has left a mixed situation, particularly in emerging markets, which are likely to be affected, especially those with long trade or financial relationships with Europe, since, paradoxically, any combination of these three becomes a threat to the market: A stronger Euro: This will favor EM exports to Europe, however, taking capital out of EM bonds, since euro-denominated investments provide rival returns to EM bonds. This will favor EM exports to Europe, however, taking capital out of EM bonds, since euro-denominated investments provide rival returns to EM bonds. Eastern European Sensitivity: countries such as Poland, Hungary, and Romania, whose economies are linked to the Eurozone, are more exposed to the turbulent movement of currency and capital. countries such as Poland, Hungary, and Romania, whose economies are linked to the Eurozone, are more exposed to the turbulent movement of currency and capital. Rising Capital Competition: There is competition among various investors to channel their funds out of riskier investments in EM investments to the superior EU bonds. The split in Fed and ECB policies has created an uneven playing field for the markets of EM currencies. Brazilian Real (BRL): Becoming strong due to the strong commodity exports and enhanced political stability. Becoming strong due to the strong commodity exports and enhanced political stability. Indian Rupee (INR): The GDP growth is positive, and investors are optimistic. The GDP growth is positive, and investors are optimistic. Mexican Peso (MXN): demonstrating strength on account of stability in trading ties and financial soundness. Turkish Lira (TRY): It is volatile because of inflation and unpredictable policy action. It is volatile because of inflation and unpredictable policy action. Argentine Peso (ARS): The banking system under pressure: the denting IMF intervention. The banking system under pressure: the denting IMF intervention. Egyptian Pound (EGP): Suffers as it grapples with increased debts and geopolitics. At low interest rates back home in the U.S, again investors focus on emerging markets hawks but not so widely as they used to do. The easy EM investing is gone. Investors have become interested in seeking: Strong Fundamentals: Low inflation, easy debt, and political stability. Low inflation, easy debt, and political stability. Export-Oriented Economies: Particularly those dependent on commodities or technological production. Particularly those dependent on commodities or technological production. Monetary Credibility: Free and aggressive central banks are increasingly becoming trusted. Read More How to Invest in Crypto for Beginners They are shifting to countries such as Vietnam, Chile, and the Philippines, where risky countries with poor governance or twin deficit countries are avoided. Central banks in the emerging markets have come of age in terms of policy responses. In 2025, people are actively adapting to external circumstances and not going into a panic. Rate Buffers: Indonesia and the Philippines are keeping moderate interest rates in order to control inflation and variability of capital flow. Indonesia and the Philippines are keeping moderate interest rates in order to control inflation and variability of capital flow. Currency Defense Measures: South Africa and Colombia are looting reserves and deploying FX to evade fiscal devaluations. South Africa and Colombia are looting reserves and deploying FX to evade fiscal devaluations. Monetary Coordination: A number of EMs are enhancing transparency and the coordination of fiscal-monetary policy to disguise the risk perception. To the Fed and ECB policies influence, as well as global commodity prices, which impact the EMs' trade balances and growth: Oil Exporters: The oil-exporting countries, such as Nigeria and Saudi Arabia, get a stable demand and a marginally weaker dollar. The oil-exporting countries, such as Nigeria and Saudi Arabia, get a stable demand and a marginally weaker dollar. Mineral Exporters: There is investment in copper exporter Chile and nickel exporter Indonesia, as a result of the clean energy boom. There is investment in copper exporter Chile and nickel exporter Indonesia, as a result of the clean energy boom. Agricultural Powerhouses: Brazil and Argentina: Either in the shape of the climate issues they deal with, or the support because of high global food demand. Want to Learn About Us Finance Check Among most EMs, current account and fiscal are being backed up by better terms of trade in 2025. As attractive as the positives are, EMs have quite a few downside risks in case Fed or ECB policies go about-face, or some external shock befuddles them: Re-acceleration of U.S. Inflation: The threat of on-again, off-again Fed hawkishness would re-energize dollar appreciation and EM outflows. Slower Eurozone Demand: The prolonged tightening by the ECB could undermine demand by EM to exports in Europe. Geopolitical Crises: Uncertainty or violence in the Middle East or Eastern Europe might affect the feelings of investor confidence and oil prices. China's Economic Slowdown: A variety of EMs rely on the trade relations with China; a weak Chinese recovery is an indirect risk. How Fed and ECB Shifts Are Reshaping Emerging Markets and Currencies in 2025. This less aggressive approach by the Fed is providing breathing room to EMs, and the more aggressive approach on the interest rates increases opportunities as well as challenges, especially to Europe call call-linked economies, with the ECB. Also Read About Why IUL Is a Bad Investment? Upcoming economies with a higher focus on economic stability, transparency of policy, and strength are gaining the most in this new setting. On the investor side, attention needs to be moved away from simply yield-seeking to a risk-adjusted assessment of returns, macro-fundamentals, and currency developments. Global central bank policies are still evolving, and emerging markets need to remain flexible, and the investors invariably need to remain abreast with the current happenings. The next decade will not only be defined by the actions of what the Fed and the ECB say and do, but also by how the emerging markets adjust to it. TIME BUSINESS NEWS
The Hill
4 minutes ago
- The Hill
Senate megabill marks biggest Medicaid cuts in history
Senate Republicans on Tuesday passed the largest cuts to Medicaid since the program began in the 1960s, a move that would erode the social safety net and cause a spike in the number of uninsured Americans over the next decade. The tax and spending bill is projected to cost more than $3 trillion during that time, but would be partially paid for with about $1 trillion in cuts to Medicaid. Almost 12 million lower-income Americans would lose their health insurance by 2034, according to the Congressional Budget Office. It still needs to pass the House again, where some moderate Republicans have expressed concerns about the cuts. The CBO was still analyzing the bill after it was released late Friday, and many last-minute changes meant a more exact forecast on coverage losses wasn't possible before the Senate rushed to vote on it. President Trump and most congressional Republicans say the reductions aren't true cuts. They argue nobody who should be on Medicaid will lose benefits. 'We're cutting $1.7 trillion in this bill, and you're not going to feel any of it,' President Trump said at the White House last week. Still, experts and health advocates say the CBO analysis confirms that despite Trump's repeated pledges to only cut waste, fraud and abuse in Medicaid, the legislation would enact an unprecedented reduction in the program currently used by more than 70 million low-income Americans. Sen. Thom Tillis (R-N.C.) made an impassioned speech on the Senate floor Sunday night warning that Trump was breaking his promise not to cut Medicaid. 'The people in the White House advising the president, they're not telling him that the effect of this bill is to break a promise,' Tillis said the day after announcing he would not seek re-election. 'I'm telling the president, you have been misinformed. You supporting the Senate mark will hurt people who are eligible and qualified for Medicaid.' Over time, the losses will blunt the significant coverage gains made under the Affordable Care Act (ACA), signed by then-President Obama in 2010. 'This bill isn't being crafted to improve health care in America, or to improve the Medicaid program, or to improve the [ACA]. The purpose of these cuts in the bill is to try to find savings to pay for tax cuts,' said Andrea Ducas, vice president of health policy at the Democratic-aligned Center for American Progress. 'It's treating these health care programs as a [piggy bank]. It's just, how do we extract as much from these programs as humanly possible so that we can find the savings to pay for tax cuts,' Ducas said. The effects of the cut could be devastating, beyond coverage losses. People who lose their Medicaid would have to pay more out of pocket, driving up medical debt and leading to them likely delaying needed treatment or medication. Hospitals would see a spike in uncompensated care and overcrowding of emergency rooms. Even people who still have insurance may not have anywhere to go for care. Hospitals, nursing homes and other providers operating on thin margins warn they could close. 'Seniors will struggle to afford long-term care. People with disabilities will lose critical healthcare coverage that allows them to work and live independently. Rural communities across America will be decimated from hospital closures, and people will lose their lives,' Richard Besser, president and CEO of the Robert Wood Johnson Foundation and former acting director of the Centers for Disease Control and Prevention, said in a statement. 'It is unfathomable to see policymakers intentionally inflict so much damage on the people they represent.' Experts said it's nearly impossible to take almost $1 trillion out of Medicaid without impacting the entire health system, not just the people who lose insurance. By design, the group that would be hit the hardest are people who gained insurance when their states expanded Medicaid under ObamaCare. 'The bill particularly attempts to undermine the Medicaid expansion,' said Jennifer Tolbert, deputy director of the program on Medicaid and the Uninsured at health policy research organization KFF. 'It doesn't exactly repeal it, but many of the provisions target both expansion states and the expansion population.' The bill would achieve its savings in various ways, but the bulk of the cuts come from a strict national work requirement and new restrictions on state-levied taxes on health providers. The provider taxes were the second-largest Medicaid cut in the House bill, after the work requirements. The cuts are even larger under the Senate design. Those changes would reduce spending by nearly $191 billion over a decade, according to the CBO estimate. States impose taxes on providers to boost their federal Medicaid contributions, which they then redirect to hospitals in the form of higher reimbursements. Limiting provider taxes is a long-held conservative goal, as they argue states are gaming the current system and driving up federal Medicaid spending. But senators representing states with poorer, rural populations have objected to the scale of the provider tax cuts, including Sens. Josh Hawley (R-Mo.), Susan Collins (R-Maine), Lisa Murkowski (R-Alaska) and Tillis. The House bill would freeze the tax rate for most states, but the Senate version would require many states to lower their existing rates. As an incentive for senators uncomfortable with the provision, the bill includes a $25 billion fund to aid rural hospitals. Overnight Monday, senators voted down an amendment from Collins to double the size of the fund and increase taxes on the ultra-wealthy. Hospitals said the relief fund isn't enough to make up for the impacts of the bill, and urged lawmakers to reject it in favor of the House version — which also would have enacted unprecedented Medicaid cuts, but was less damaging to rural providers. Even some Republicans sounded the alarm. Tillis focused his ire on the provider taxes and state-directed payments, arguing they were simply too harmful to his constituents. He warned his fellow Republicans that their support for the bill could boomerang and cost them politically. Hawley condemned the provider tax cuts and other Medicaid changes, but voted for the bill anyway. Part of his reasoning, he said, was that the bill was changed to delay implementation of the cuts for another year. He also touted 'tax cuts for working families' and an extension of the Radiation Exposure Compensation Act (RECA). Hawley in a statement after the vote urged the House to pass the bill quickly, while sounding a warning on Medicaid. 'Let me be clear, I will continue to do everything in my power to reverse future cuts to Medicaid. If Republicans want to be the party of the working class, we cannot cut health isnurance for working people.' The other major Medicaid change in the bill is work requirements. For the first time in the history of the Medicaid program, the bill would require beneficiaries to prove they are working or in school at least 80 hours a month to keep their health insurance starting December 31, 2026. The Senate version extends the requirement to low-income parents of children older than 14, in addition to childless adults without disabilities. States can apply for a 'good faith' exemption to delay the start until 2029, but it's up to the discretion of the Trump administration to grant it. Advocates said giving the administration power to delay coverage losses has the potential to politicize the work requirements, as the White House could grant waivers to important states Republicans need to win. The work requirements are projected to save about $325 billion over a decade, because millions of people would be moved off Medicaid rolls. Nearly six million people would eventually lose Medicaid for not meeting the House bill's work requirements, according to CBO. Work requirements 'are only money savers if people lose coverage. Otherwise they wouldn't be in this bill,' Ducas said. 'I think that's pretty clearly the intent.'
