US-EU trade deal: Asian stocks rally; Euro jumps to $1.1779
US President Donald Trump on Sunday said that both powers have 'reached a deal' on trade and called it a 'good deal'.
He announced that a 15 per cent baseline tariff would be imposed on EU exports to the US.
Global markets react positively to the EU-US deal
The euro rose to $1.1779, up from $1.1749 on Friday after the deal news.
Hong Kong led the rally, climbing around 1%.
Other rising markets included: Shanghai, Sydney, Seoul, Wellington, Taipei, Jakarta, and European and US futures.
Tokyo fell for the second straight day, after a 5% surge earlier on Japan's US deal.
Singapore and Seoul posted minor losses.
The broad rally followed record highs on Wall Street's S&P 500 and Nasdaq.
'Good deal for everybody'
EU Commission President Ursula von der Leyen and Donald Trump reached a trade deal on Sunday. Meanwhile a new round of China-US talks led by US treasury secretary Scott Bessent and China's vice premier He Lifeng in Stockholm is planned.
Trump and Der Leyen announced at his golf resort in Scotland that a 15 per cent baseline tariff would be imposed on EU exports to the US.
"We've reached a deal. It's a good deal for everybody. This is probably the biggest deal ever reached in any capacity," Trump said.
"It's a good deal," von der Leyen further hailed the deal. "It will bring stability. It will bring predictability. That's very important for our businesses on both sides of the Atlantic," she added.
The US President also said that the levies would apply across the board, including to Europe's key sectors such as automobiles, pharmaceuticals, and semiconductors.
'Market-friendly' agreement
Thames Water CEO Chris Weston acknowledged the rise in stock markets following the landmark deal.
"The news flow from both the extension with China and the agreement with the EU is clearly market-friendly, and should put further upside potential into the euro... and should also put renewed upside into EU equities," Weston said at Pepperstone according to an AFP report.
Traders are getting ready for a busy week, with investors watching for important economic data, central bank meetings, and results from big global companies.
Both countries had placed tariffs on each other's goods in April, reaching over 100% in some cases. The US has now lowered its duties to 30%, while China has cut its tariffs to 10%.
The 90-day truce, agreed during talks in Geneva in May, is set to end on August 12.
Big week for tech giants
Earnings from major tech giants like Amazon, Apple, Meta, and Microsoft are due this week. Investors are also watching for key US economic data, including growth and job figures.
The Federal Reserve is expected to keep interest rates unchanged at its latest policy meeting. However, markets are eager to hear how officials view the rest of the year, especially after Trump's new tariffs. The Bank of Japan is also likely to avoid any major changes to borrowing costs.
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Hindustan Times
5 minutes ago
- Hindustan Times
Modi makes push for ‘swadeshi' after US levies 25% tariff
Prime Minister Narendra Modi on Saturday called on citizens to adopt the spirit of 'swadeshi' and support locally made products, stressing that true service to the nation lies in promoting indigenous goods amid global economic uncertainties. Prime Minister Narendra Modi addresses a gathering in Varanasi.(ANI) His comments came a day after US President Donald Trump announced a 25% tariff on India and unspecified penalties for buying Russian oil, after talks bogged down over access to agriculture and other sensitive sectors, with New Delhi refusing to open its labour-intensive farms to unfettered American imports. In a 55-minute speech, the PM also invoked Lord Shiva's 'Rudra roop' (fierce form) to describe India's resolute action against terrorism, saying Operation Sindoor showcased the country's strength and that any Pakistani misadventures will get a reply from missiles made in UP, a reference to the BrahMos. He was addressing a public meeting in Banauli village in his parliamentary constituency Varanasi where he laid the foundation stone and inaugurated development works worth around ₹2,200 crore. He also distributed the 20th instalment of the PM Kisan Samman Nidhi worth ₹20,500 crore to over 97 million eligible farmers nationwide. 'The world economy is facing instability and uncertainty. In such times, countries are focusing solely on their own interests. India, too, is on the path to becoming the world's third-largest economy and must remain alert to its own economic priorities,' he said. The prime minister also made a renewed push for 'swadeshi', stressing that every party, leader and citizen must work to promote indigenous goods if 'we want India to become the third-largest economy'. 'Welfare of farmers and small industries is paramount and the government is making every possible effort in this direction…At a time when the world is going through uncertainty, let us take a pledge to sell only swadeshi goods from our shops and markets. Promoting made in India goods will be the truest service to the country,' he added. He also urged people to be conscious consumers, saying, 'Whatever we buy, we should ask ourselves — has an Indian toiled to make this? If it has been made by the sweat of our people, with their skills, that product is swadeshi for us. We must adopt the mantra of 'Vocal for Local'.' Trump's executive order on Friday also set punitive rates for 69 trading partners, including 35% duties on Canada, 50% for Brazil, 20% for Taiwan and 39% for Switzerland, as a previously announced 12.01am EDT August 1 deadline approached. Goods from unlisted countries face a 10% baseline tax. The new levies come into effect on August 7. India now faces higher tariff rates than regional competitors, with Thailand, Indonesia and Malaysia set for 19% duties while Bangladesh, Vietnam and Taiwan face 20% rates—potentially weakening India's position as a preferred sourcing destination for US companies. India exports $86.5 billion worth of goods to the US, with a surplus of $41 billion. However, industry experts estimate that a significant chunk of Indian goods may avoid the higher duties for now since the Trump administration has exempted electronics, pharmaceuticals, energy products and critical minerals from additional tariffs citing national interest. Nonetheless, analysts expect a significant impact for India's exports. In his first visit to Varanasi since Operation Sindoor, Modi drew attention to the state of the world economy. With the festival and wedding seasons approaching, the PM encouraged people to ensure that all new purchases are made in India. He recalled how many citizens changed their wedding plans from abroad to India after his earlier appeal. 'The feeling of swadeshi in every action will define our future. This will also be a true tribute to Mahatma Gandhi. Only through collective effort can we fulfil the dream of a developed India,' Modi said. The PM accused the Congress of repeatedly insulting the valour of the armed forces and even terming Operation Sindoor a 'tamasha' (spectacle). 'Can 'Sindoor' ever be a joke? They dared to insult the sacred mark of our sisters and the valour of our soldiers,' he said. 'My heart was filled with sorrow for the 26 people who lost their lives in the Pahalgam terror attack... My promise to avenge 'Sindoor' of our daughters was fulfilled with blessings of Mahadev,' he said, adding, 'I dedicate the success of the operation at the feet of Mahadev.' He was referring to the killing of three terrorists responsible for the April 22 Pahalgam terror attack in an encounter named Operation Mahadev last week. 'Shiva means welfare, but when terrorism and injustice raise their ugly head, Mahadev takes his 'Rudra roop'. During Operation Sindoor, the world witnessed this very form of India,' the PM said, warning that 'whoever attacks India will not survive, even in Pataal Lok (netherworld)'. Taking a dig at the Opposition, Modi alleged that while the country was celebrating the success of Operation Sindoor, 'some people in our own country were troubled by it'. 'Congress and its allies are unable to digest the fact that India demolished terrorist hideouts inside Pakistan,' he said. 'Aren't you proud of Operation Sindoor? Aren't you proud that India destroyed terror bases (in Pakistan and PoK)?' the PM asked. 'Several air bases in Pakistan are still in ICU. While Pakistan's anguish is understandable, what's shocking is that Congress and Samajwadi Party leaders are also unable to cope with it.' Modi also attacked the Samajwadi Party (SP) for questioning the timing of Operation Mahadev. 'One of their leaders asked in Parliament -- 'why were the attackers of Pahalgam killed now'. Should I call and ask Samajwadi leaders whether to strike now or later? Should we wait and let the terrorists escape?' Modi asked. 'This is 'Naya Bharat' (New India), which worships Lord Shiva but turns Kaal Bhairav against its enemies when needed,' the prime minister said. Modi stressed that Operation Sindoor demonstrated India's indigenous defence capabilities to the world. Expressing pride as an MP from Uttar Pradesh, the PM announced that BrahMos missiles will soon be manufactured in Lucknow. The BrahMos unit in Lucknow was inaugurated on May 11. Issuing a stern warning, he declared, 'If Pakistan dares to repeat its mistakes, missiles made in UP will wipe out terrorists.' Uttar Pradesh chief minister Yogi Adityanath, his two deputies Keshav Prasad Maurya and Brajesh Pathak, along with several ministers, public representatives, and BJP state unit president Bhupendra Singh Chaudhary were present at the event.
Indian Express
5 minutes ago
- Indian Express
To secure US trade deal, key ministries told to list what they can bring to talks table
FOLLOWING US President Donald Trump's tariff sledgehammer, the government has kicked off an exercise to thrash out concessions across sectors that can be offered in the tariff negotiations later this month. Key economic ministries have been asked to see what they can still afford to offer to sweeten New Delhi's deal when the US team is here on August 25. To reach an agreement, the Trump administration has been demanding much more than what the government has offered in its market access commitments, including lowering of tariffs across the board and removal of non-tariff trade barriers. As policymakers grapple with Trump's announcement of a 25 per cent tariff on goods from August 7, alongside an additional but unspecified 'penalty' for its defence and energy imports from Russia, economic ministries have started sending in sectoral tariff concessions in their jurisdictions. There are indications oil refiners have started reducing Russian oil purchases. Some of these concessions, if calibrated well, could ensure an opening up of the domestic economy, sources aware of discussions at the highest levels told The Indian Express. In fact, it was an external crisis that had forced the reforms of 1991. Most importantly, the sources said, an unnecessary show of bravado in countering some of Trump's assertions, however ridiculous they may be, should be avoided. India was one of the first countries the Trump administration had expected to sign a deal with, but slow progress has been a source of frustration for Washington DC. Like countries around the world scrambling to deal with Trump's tariff threats, India had largely adopted a principled, but non-confrontational, stance in an attempt to balance selective concessions with caution to safeguard its economic growth, and circumvent a backlash from domestic producers. Sources closely tracking the US talks with others said a majority of the countries that rushed to sign deals with the world's biggest economy ended up with lopsided agreements that effectively extracted more than what it gave. This includes the UK and Australia that have a trade deficit with the US. On talks with New Delhi, US Treasury Secretary Scott Bessent told CNBC Thursday: 'Well, I don't know what's going to happen; it will be up to India. India came to the table early. They have been slow-rolling things, so I think that the President, the whole trade team is frustrated with them. And also, India has been a large buyer of sanctioned Russian oil, that they then resell as refined products. So, they have not been a great global actor'. The assumption in New Delhi has always been that Washington DC will maintain a differential of 10-20 per cent in tariffs between China and India; and that the Americans would be cognizant of India's traditional redlines that have endured for decades, including concerns over GM food crops and the need to safeguard the interest of the vast subsistence-level manufacturing base that has an oversized contribution to labour-intensive exports. The government is also keen to stay away from offering duty concessions on imports of agri items such as soybean, corn and dairy, in the interim deal. While the government has offered to cut tariffs on 55 per cent of US imports, this could be pushed up in the upcoming talks, given that in FTAs with Japan, Korea, and ASEAN, over 80 per cent of tariff lines were down to zero. Sources said the outer limit for a deal with the US, currently pegged at around October, could be brought forward, if fresh negotiations are positive. What complicates the equation for India is that the Chinese are at an advanced stage of negotiations towards a deal, which could have a favourable tariff rate and potential waivers on secondary tariffs, including possibly the tariff on account of Russian oil imports and the proposed 10 per cent BRICS tariff. China is currently faced with a 30 per cent tariff. From New Delhi's perspective, a deal needs to be clinched precisely for ensuring the gap in tariffs between India and China is maintained, even with a limited early-harvest type of deal. There is, however, greater receptiveness now within the policy circles to cut tariffs on some industrial goods, especially intermediate goods where there is the twin problem of high duties and an inverted duty structure (duty being higher on inputs than on final products). Alongside, there is a willingness to grant concessions in sectors such as public procurement and agri provided these are matched by the other side, like in the case of the UK deal. Also, India is willing to import more from the US, especially in three big-ticket sectors – defence equipment, fossil fuels and nuclear – to manage Trump's constant references to the trade gap, the sources said. Tariff rebalancing, if done right, could potentially offer an impetus to the economy, given that the biggest beneficiaries of tariff protection, especially the non-tariff barriers such as an increasing array of QCOs (quality control orders), are the big players. MSME units have been calling for these QCOs to be removed, especially in areas such as steel and textiles. Since 1991, New Delhi has gradually reduced its average tariff from nearly 79 per cent in 1990 to around 12 per cent in 2013, following which it has gone back up to 16-17 per cent by 2023. Sectors such as agriculture, dairy and automobiles, continue to be protected, even as the Ministry of Commerce and industry maintains that its trade measures are WTO compliant. Unlike its response during Trump's first term, where retaliatory tariffs were imposed, New Delhi has desisted from retaliating and is working on strategic concessions in sectors that the US is keen to target, while adhering to its own broad red lines. This involves areas symbolic of trade openness, including nuclear energy, fossil fuels and defence procurement. Think tanks such as Delhi-based Global Trade Research Initiative have said that by refusing to cross its red lines, particularly on agriculture, India has helped avoid 'the trap of a one-sided deal'. Once the official level discussions wrap up, there is a sense that a final call on the deal could come down to a conversation between the two leaders, Prime Minister Narendra Modi and Trump. This is especially so since it is Trump who is the trade negotiator-in-chief. For India, the best-case scenario would be to get a deal of some sort now, and then build on that in the future negotiations that could run into 2026, experts said. With Trump announcing the tariffs and penalties on India, that phone call could come in sooner, they said. Anil Sasi is National Business Editor with the Indian Express and writes on business and finance issues. He has worked with The Hindu Business Line and Business Standard and is an alumnus of Delhi University. ... Read More
Indian Express
5 minutes ago
- Indian Express
What Trump is actually doing — and why India needs to press reform & reset
FOR all the disquiet in Delhi over US President Donald Trump's sugar-uncoated remarks, his rough and ready tactics on trade, there needs to be a sobering acknowledgment of two realities: one, like it or not, tough tactics often win on the street in a world that's never stopped being an unfair place; and, two, Trump has prevailed. Most mainstream economists dismissed his approach, warning that his aggressive tariff regime would spell disaster for the US economy. Yet, four months after unveiling his first tariff chart on April 2—dubbed 'Liberation Day'— and his second on Friday, Trump has gained enough ground to claim a significant victory. Like a gambler, who believes he is on a winning streak, Trump is set to roll the dice for far more sweeping changes in the post-war global financial and technological orders. The US President's bilateral negotiations are being described as the 'Trump Round' of trade talks, echoing the major rounds of GATT and WTO negotiations that shaped global commercial order. With the exception of Canada and China, most countries refrained from retaliatory tariffs. Instead, they lined up outside the White House, eager to strike deals before the extended August 1 deadline. India was among the early partners to start trade talks but failed to close a deal. While many major economies and middle powers signed agreements on Trump's terms, India now finds itself in the company of Brazil, Burma, and Switzerland facing steep US tariffs. To its credit, Delhi did recognise trade as central to Trump's second-term agenda. Prime Minister Narendra Modi's February 13 meeting with Trump produced a joint statement affirming the goal of expanding bilateral trade to $500 billion and launching time-bound trade negotiations. India negotiated in good faith and continuously. But the gap between India's negotiating brief and Trump's maximalist agenda proved too wide to bridge. Trump's growing impatience was evident in a barrage of tweets targeting India, while senior administration figures—Treasury Secretary Scott Bessent and Senator Marco Rubio—spoke publicly about the President's 'frustration' with Delhi's posture. Frustration had also defined Trump's first-term trade engagement with India. Robert Lighthizer, Trump's former US Trade Representative, recounts in his book, No Trade is Free, how difficult it was to conclude even a modest trade agreement with Delhi. He placed the blame not on India's bureaucracy, but on the entrenched interests of the Indian capitalists that fiercely guard the barriers protecting them from external competition. Lighthizer revealed he kept files on top Indian tycoons—whom he labeled 'oligarchs'—to better understand Delhi's negotiating strategy. Trump's complaint about India's 'obnoxious' non-tariff barriers rings familiar. India's neighbours have long voiced similar grievances, although a lot more politely. Yet, the deeper issue may be Delhi's underestimation of the scale and ambition of the Trump Round. Trump's goal was not merely a new bilateral deal here or there, but a systemic overhaul of the global trading order constructed after the Second World War and revamped at the turn of the millennium. On the campaign trail and in office, Trump has argued that the international trade regime has failed the American people—and must be overturned. The strategy, often dismissed as irrational, had a logic of its own. Stephen Miran, Trump's economic adviser, argued in a paper written before the presidential election that Washington could exploit the global export dependence on the US market—and allies' reliance on US security guarantees—to rewrite the rules. Miran describes the post-war free-trade order as a political construct, in which US policy sacrificed domestic industry for Cold War geopolitical goals. He proposed replacing blanket multilateralism with 'strategic pluralism,' forging separate deals with different nations based on US leverage. Before taking over at the Treasury, Bessent, too, hinted at the broader potential of tariffs—not just to reshape trade, but to pressure states on energy, currency, and strategic alignment. For Bessent, Trump's strategy was about a grand rebalancing of the global economy in America's favour. Trump has not held back. He has used tariffs for a variety of objectives. He imposed a 50% tariff on Brazil to weaken President Lula and help his rival Jair Bolsonaro. He is threatening tariffs on Indian and Chinese oil imports from Russia and using economic leverage to push BRICS countries away from their loose talk on de-dollarisation. In the last four months, three core pillars of Trump's strategy have become visible: using tariffs to narrow trade and fiscal deficits; mobilising investment to reindustrialise the US; and compelling trade partners to buy American energy and goods. Even countries with minimal trade ties to the US have had to offer something of interest to the White House. Pakistan's offering was its allegedly 'rich' oilfields. The EU, Japan, and South Korea have made sweeping pledges, including tariff concessions, major investments, and hefty American purchases. Whether these commitments are realised is another question. But they have delivered the optics of victory that Trump craves. What India offered remains unclear—but evidently, it was not enough. If Delhi was unprepared for Trump's counter-revolution in trade, it now faces an even more profound challenge: coping with a broader transformation of the global financial and technological order. Trump is targeting the foundations of the old monetary system. His administration's embrace of cryptocurrencies and stablecoins promises to reinforce the dollar's dominance over the global system and the US ability to leverage it. At the same time, Trump is aggressively deregulating artificial intelligence. At a recent AI summit in Pittsburgh, he announced a sweeping new policy to promote American AI dominance—especially over China—and pledged to invest a significant share of the revenues secured through trade negotiations into AI-driven industrial renewal. Trump's vision of American resurgence hinges less on outsourcing work and insourcing labour and more on technological innovation to restore US industrial might. In short, Trump is not just renegotiating trade. He is leading a radical overhaul of American capitalism by reshoring key elements of the supply chains, promoting a national industrial policy, and investing in tech-centric manufacturing in the United States. As India resumes trade talks with the US later this month, it must recognise this historic moment in the evolution of the global economy. Any negotiating strategy premised on maintaining the status quo at home at a time of radical change abroad will leave India more vulnerable—not just to US pressure, but to the accumulating costs of missing a long-overdue internal economic transformation. This is a moment that demands India to focus on reforming its own economy to make it globally competitive and technologically agile. India owes this to itself – and to its future. (C. Raja Mohan is a contributing editor on international affairs for The Indian Express)
