Merkel criticizes leader of her own party for cooperating with German far right
'I believe it is wrong,' Merkel said, referring to the outcome of a vote in parliament on Wednesday when a Christian Democrat motion was passed with support from the nationalist Alternative for Germany (AfD), breaking a long-held political taboo in Germany.
Holocaust survivor Albrecht Weinberg, who survived Auschwitz and Bergen-Belsen, returned his Federal Order of Merit medal to the German state in protest, while Michel Friedman, a Jewish community leader and member of the CDU's presidency in the 1990s, quit the party.
Berlin mayor Kai Wegener, a fellow conservative, also indicated dissatisfaction.
'With me - you can rely on it - there will never be cooperation or a coalition with the far-right,' he said.
Christian Democrat leader Merz, frontrunner to become chancellor after the February 23 election, rejected suggestions he had breached mainstream parties' 'firewall' against the AfD, saying his bill was necessary, regardless of who chose to back it.
In a rare intervention into domestic politics, Merkel accused Merz of going back on a vow he made in November to seek majorities with mainstream parties rather than with the AfD.
She urged 'democratic parties' to work together to prevent violent attacks like those recently seen in Magdeburg and Aschaffenburg. In both instances, the suspects had applied for asylum in Germany, bringing border and asylum policy into sharp focus in the election campaign.
The AfD, which is polling second in most surveys behind Merz's conservative bloc, is being monitored by German security services on suspicion of right-wing extremism.
Thousands protested outside the CDU party's Berlin headquarters on Thursday, prompting the police to urge staff to leave work early for their own safety, a party official wrote on social media.
Addressing a rally in Dresden, Merz told protesters they were over-reacting.
'The right to demonstrate only goes so far,' he said, adding that Chancellor Olaf Scholz's Social Democrats and the Greens represented a 'dwindling minority' in society.
The job of the conservatives, he said, was to ensure 'a party like the AfD is no longer needed in Germany.'
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42 minutes ago
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Why Likud booting Edelstein will come back to bite it?
While Edelstein has given no indication of his next political move and has remained loyal to the Likud, it is not inconceivable that he seeks a new political home. Regardless of where one stands on Israel's political map – Right, Left, or Center – recent polling gives little room for optimism that a clear mandate to govern will emerge from the next elections, which will be held somewhere between late January and late October 2026. The reason for this pessimism is that the polling numbers indicate that the parties currently comprising the coalition are projected to win between 49 and 53 seats, while the Jewish opposition parties are polling between 57 and 61 seats. In other words, both sides are expected to struggle to form a stable coalition. While in 2022, Naftali Bennett and Yair Lapid were willing to form a government with an Arab party, Mansour Abbas's Ra'am, the likelihood of that dynamic repeating itself with the country on a war footing, or just beyond it, which may be the case when the elections are held, is slim. This means that the country is staring down the barrel of the same kind of political stalemate and gridlock that plagued it between 2019 and 2022, when it underwent five elections in just three and a half years. That picture does not fundamentally change even when factoring in the possible emergence of a new party led by Gadi Eisenkot, or even if he joins Yesh Atid as its head or merges with Bennett's new party. The Eisenkot effect, for the most part, has been to rearrange the furniture within the opposition bloc. It has not shifted votes from the coalition bloc to the opposition. He is not moving a table and chair from one room to another; he is simply moving them around in the same room. The key to breaking this stalemate is moving votes across the blocs, for example, persuading moderate right-wing voters currently voting for the Likud to cast their ballots for Benny Gantz's, Lapid's, or Bennett's parties. The polls, however, are not showing this dynamic taking hold. The option to form a new government may lie with a new party And that means the vehicle to move votes from one bloc to the other might be a new party with a different message. If the Likud goes ahead on Wednesday and ousts Yuli Edelstein from his position as head of the Knesset Foreign Affairs and Defense Committee, punishing him for refusing to back a law that fails to mandate meaningful haredi (ultra-Orthodox) conscription within a reasonable time frame, then it might – with its own hands – be creating that very vehicle. Edelstein has issued no threats to leave the Likud for another party or to start a new one. Still, that possibility cannot be dismissed, especially if he is ousted from his post and performs poorly in the Likud primaries to be held before the next elections. And a poor showing in the next Likud primaries is not far-fetched, given that some within his party are accusing him of trying to bring down the right-wing government over the haredi draft issue. Edelstein joined the Likud in 2003 after the party he founded with Natan Sharansky – Yisrael B'Aliyah – merged with the Likud. He vied for a position on the Likud's list in 2006 and won the 14th slot. As the party only won 12 seats, he first entered the Knesset as a Likud MK replacement in 2007. His standing in the party grew steadily. In the 2009 primaries, he placed 12th, dropped to 18th in 2013 when the Likud ran together with Yisrael Beytenu, and then rose to third place in 2015. His peak came in the April 2019 primaries, when he captured the second slot on the party list, just behind Prime Minister Benjamin Netanyahu. That represented the height of his influence and reflected his popularity within the party. At the time, he was serving as Knesset speaker. His fortunes began to decline, however, when – amid Netanyahu's repeated failures to form a coalition after successive elections – he flirted with the idea of challenging him for the party leadership, an idea he eventually abandoned. But the damage was done, and in the 2022 primaries, he dropped to 18th place. When Netanyahu selected his cabinet after winning the Knesset elections that year, Edelstein was conspicuously left out, only to be appointed chairman of the Foreign Affairs and Defense Committee as almost a consolation prize. While Edelstein has given no indication of his next political move and has remained loyal to the Likud, it is not inconceivable that, if he is ousted, he could seek a new political home or build a new one. Doing so on the back of the haredi conscription issue may prove to be a winning strategy. 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an hour ago
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Brussels poised to sign deal with Trump
Brussels is close to agreeing a trade deal with the US that will slap 15pc tariffs on EU imports to America, diplomatic sources have told the Telegraph. If approved, the deal will essentially halve the 30pc tariffs threatened by Donald Trump to enter into force on Aug 1. The agreement is similar to a pact struck between the US and Japan in recent weeks. 'The current state of play on the table is a 15pc base tariff,' a diplomat said after EU member states were briefed on the talks by the Commission. The diplomat said the decision would essentially come down to approval from Donald Trump. A source close to the US administration said the White House was considering the proposal. Some EU member states are pushing for the bloc to prepare to punish the US if the proposals are rejected. France used the 'Coreper' meeting of national ambassadors to call for the immediate introduction of the bloc's much-vaunted 'trade bazooka', which allows the Commission to legally fight back with retaliatory tariffs. Germany also appealed for the system to be prepared if the EU and US fail to hammer out a deal to end their mini trade war. 'Regarding countermeasures, the Commission explained the merging of the first and second lists: the total will come at a value of €93bn, with tariffs up to 30pc to mirror US,' the diplomat said. 06:32 PM BST Signing off... Thanks for joining us here on this blog. That's all for today but do join us here for all the latest economic and business news. 06:31 PM BST Macron has 'determination' over tariffs with US Emmanuel Macron, the French president, has emphasised his 'determination' for tariffs to be as low as possible. 'Today, we are responding to the tariff offensive that has been launched with a determination that we share: to provide stability and have the lowest possible tariffs,' he said alongside Mr Merz before talks between the two leaders in Berlin. 06:17 PM BST German carmakers 'will be relieved' over 15pc tariffs German carmakers will be able to cope if Donald Trump imposes 15pc tariffs on their exports, a leading economist has said. Andrew Kenningham, chief Europe economist at Capital Economics, said: 'German auto manufacturers will be relieved if it is confirmed that the sector will face tariffs of 'only' 15pc rather than 25pc. 'While this will still dampen German exports it is unlikely to be a knock-out blow to the sector. 'Meanwhile, reports suggest that aircraft, medical equipment and spirits may be exempt. Together these sectors account for only 8pc of total EU exports to the US so do not shift the dial much at a macroeconomic level. We don't think the reported deal will have a major influence on the outlook for monetary policy. 'At tomorrow's ECB press conference, President Lagarde won't get carried away, and not just because the deal is not yet over the line. 'While the agreement would avoid a damaging escalation of trade barriers, it would be slightly worse for the economy than the assumptions underlying the ECB's baseline forecasts published in June.' 06:11 PM BST Champagne makers cut production amid trade war France's champagne producers have said they are cutting production by 10pc as they warned of 'economic instability'. The marketable yield limit for the 2025 harvest has been set at 9,000 kilos per hectare, down from 10,000 kilos per hectare last year, the Comite Champagne said. The new target, one of the lowest in years, comes after Donald Trump threatened to slap tariffs on French wine and spirits. 'Thanks to generally mild weather conditions, the vines have benefited from an environment conducive to their development,' the Comite Champagne said. However, 'geopolitical and economic instability, combined with increasingly volatile consumer behaviour, makes forecasts more complex'. Although champagne sales 'are relatively stable', the economic uncertainty 'is prompting the industry to exercise caution', said the association, which represents 16,000 winegrowers and 350 champagne houses. 05:36 PM BST EU steel and aluminium 'face 50pc duty' Steel and aluminium exported from the EU to the US could still be hit by 50pc tariffs even if a trade deal is agreed. Bloomberg has reported that EU diplomats have said that the the exports, above a quota, would still face the duty. 05:19 PM BST FTSE 100 hits new high amid trade talk optimism European stocks climbed on Wednesday, boosted by hopes of further progress in trade talks after the US struck a deal with Japan. The FTSE 100 index closed 0.4pc, at 9,061.49, a record closing peak. It had earlier hit a record high of 9,080.09. The FTSE 250 closed up 0.4pc, at 22,013.49, and the AIM All-Share closed up 0.5pc, at 773.99. In Europe, the Cac 40 in Paris advanced 1.5pc, while the Dax 40 in Frankfurt gained 0.8pc. 05:17 PM BST Wall Street moves higher after reports US and EU close in on tariff deal Wall Street's main indexes have moved higher after the Financial Times reported that the US and the European Union are closing in on a 15pc tariff deal. Compared to the start of trading this afternoon, the Dow Jones Industrial Average is up 0.9pc, the S&P 500 is up 0.6pc and the Nasdaq is up 0.2pc. 04:35 PM BST Eurozone yields mixed as traders mull scope for US trade deal Eurozone government bond yields are mixed this afternoon, as investors weigh what Japan's trade deal with Washington means for hopes of further agreements. Germany's 10-year government bond yield, the euro area's benchmark, rose to 2.605pc, from 2.592pc yesterday. Germany's 2-year government bond yield – more sensitive to expectations for European Central Bank policy rates – was little changed at 1.822pc. On Thursday, the European Central Bank is expected to keep interest rates on hold, while awaiting a possible trade deal between Washington and Brussels. Meanwhile, analysts are trying to assess the rate outlook amid geopolitical and economic uncertainties. 'There are downside risks (for the economy and the rate outlook) from trade tensions, but Europe will also be spending a lot on defence and infrastructure,' said Bas van Geffen, a strategist at RaboBank. 'There will be more inflationary pressure from that side. Meanwhile, we are still seeing some wage pressure in Europe.' 04:17 PM BST Wall Street rises despite nerves over Big Tech results The S&P 500 and the Dow followed their global counterparts higher this afternoon after a trade deal between the United States and Japan provided a sign of progress in Donald Trump's trade war. The Nasdaq was held back by a weakness in tech shares ahead of hotly anticipated quarterly reports from Google-owner Alphabet and Tesla expected this evening. Paul Nolte, a strategist at Murphy & Sylvest, said: 'The tech sector is suffering from high expectations. 'I think we're starting to see a rotation to unloved sections of the market. It's a recognition that the Magnificent 7 are overvalued and have very high expectations built in.' He added: 'The elephant in the room is China. Investors are looking at these talks and saying 'wake me up when it's over.' And it's never going to be over because Trump's been emboldened by the tariffs.' The S&P 500 is up 0.2pc, the Dow is up 0.4pc and the Nasdaq is up 0.1pc. 04:01 PM BST White House unveils push for 'global dominance' in AI The White House has released an artificial intelligence plan aiming to give the US 'global dominance' in the sector. Donald Trump's plan calls for 'American AI' to be exported to allies across the world and combat the roll-out of Chinese competition. The US Commerce department will research Chinese AI models to discover reliance on 'Chinese Communist Party talking points and censorship'. The plan says: 'The United States must meet global demand for AI by exporting its full AI technology stack - hardware, models, software, applications, and standards - to all countries willing to join America's AI alliance. 'A failure to meet this demand would be an unforced error, causing these countries to turn to our rivals. 'The distribution and diffusion of American technology will stop our strategic rivals from making our allies dependent on foreign adversary technology.' 03:45 PM BST Lutnick sceptical of potential EU offer Howard Lutnick has expressed scepticism over whether Brussels will make a strong offer in trade talks. The US Commerce secretary told Bloomberg Television: 'It is up to them to negotiate.' He said: 'Europe is not going to give us $1 trillion to invest,' in a reference to the $550bn the Japanese government has pledged for the US economy. Japan, he added, 'got the 15pc [tariff] rate because they were willing to provide this innovative financing mechanism'. 'They came to us with the idea of a Japan-US partnership, where they are going to provide equity, credit guarantees and funding for major projects in the US.' However, Mr Lutnick said the US was 'making good progress' in talks with the EU, even though it was difficult for the 27-nation bloc to make decisions. 03:32 PM BST Bessent hints at China trade climbdown A deadline for tariffs between the US and China could be extended in a '90-day increment,' US treasury secretary Scott Bessent said. Top officials from the world's two biggest economies are set to meet in Sweden on Monday and Tuesday, with Mr Bessent in the US delegation and Chinese vice premier He Lifeng attending the talks. 'We're in a very good place with China now,' Mr Bessent told Bloomberg Television. He added that the upcoming talks would likely move beyond rare earths and export controls, and 'on to bigger discussions.' Asked about the August 12 deadline, when reduced tit-for-tat tariffs are due to bounce back to steeper levels, he signalled openness to a significant extension. 'I think that we could roll it forward, maybe in a 90-day increment,' he said. 'Both sides have de-escalated, and I think we can get into a very good cadence of regular meetings with them.' 03:22 PM BST Trump 'thinks bullying is only way to succeed' A savage assessment of US trade policy from the chief market analyst at IG: 03:11 PM BST US home sales fall amid high mortgage rates Sales of previously occupied US homes slid in June to the slowest pace since last September as mortgage rates remained elevated. Existing home sales fell 2.7pc last month from May to a seasonally adjusted annual rate of 3.9m units, the National Association of Realtors said Wednesday. Sales were flat compared with June last year. The latest home sales fell short of the 4m pace economists were expecting. Home prices increased on an annual basis for the 24th consecutive month. The national median sales price rose 2pc in June from a year earlier to $435,300, an all-time high. The US housing market has been in a slump since early 2022, when mortgage rates began to climb from pandemic-era lows. Home sales fell last year to their lowest level in nearly 30 years. Donald Trump accused Federal Reserve chair Jerome Powell of hitting the housing sector by refusing to lower interest rates. The Fed has kept interest rates on hold this year amid concerns the US president's tariff policies could stoke inflation. 03:03 PM BST Trump says Japan opening to US 'for first time ever' Donald Trump suggested that Japan was opening its market to the US for the 'first time ever' and its latest trade agreement with the US. But the facts suggest otherwise. According to official US figures, Japan imported nearly $79bn (£58bn) of goods from the US last year. It exported $148bn of goods, giving it a trade surplus with the US of about $70bn. 02:53 PM BST Trump warns he will only cut tariffs if countries 'open up markets' to US Donald Trump warned trading partners he would only lower his proposed tariffs if they agree to 'open up' their markets to the US. The US president said the trade deal with Japan justified his tariff policies, saying without the levies it would be 'impossible' to get countries to 'open up' their markets. He wrote on his Truth Social platform: 02:47 PM BST Trump accuses Fed of lacking courage to act against Powell Donald Trump resumed his criticisms of the chair of the Federal Reserve and accused its board of not having the 'courage' to act. The US president said high interest rates meant housing was 'lagging', adding that 'families are being hurt'. 02:35 PM BST US stocks jump after Japan trade deal Wall Street opened higher after Donald Trump struck a trade deal with Japan, shoring up expectations of further agreements ahead of the fast-approaching August 1 deadline. The Dow Jones Industrial Average rose 158.7 points, or 0.4pc, at the open to 44,661.12. The S&P 500 rose 17.3 points, or 0.3pc, to 6,326.9, while the Nasdaq Composite rose 73.8 points, or 0.4pc, to 20,966.47. 02:19 PM BST Lutnick: Japan 'bought' tariff rate by agreeing to finance US projects Japan will finance projects in the US and then give them to an operator to run in America, the US commerce secretary has said. Howard Lutnick said Japan had effectively bought a lower 15pc tariff rate by agreeing to pay for schemes. 'They're the banker, they're not the operator,' he told Bloomberg News. 'Let's say we want to build generic pharmaceuticals, we don't make anti-biotics in America, so the President says 'let's go make anti-biotics in America'. 'The Japanese will finance the project and will then give it to an operator who will run it and the profits will be split – 90pc to the taxpayers of the United States of America and 10pc to the Japanese. 'So they basically bought down their tariff rate by this commitment.' 01:59 PM BST Japan agrees to buy 100 Boeing planes Japan has agreed to buy 100 Boeing planes and boost rice purchases by 75pc as part of a trade deal with the United States, a White House official said. The agreement also includes Japan buying $8bn in agricultural and other products while increasing defence spending with US companies to $17bn annually from $14bn, the official said. 01:45 PM BST Non-dom tax raid is hurting Britain, warns Goldman Sachs boss Rachel Reeves is damaging Britain's growth prospects with her non-dom tax raid, the boss of Goldman Sachs has warned. David Solomon said tax policy in Britain was 'pushing people away', warning that the country's status as a global financial hub was 'fragile' after years of over-regulation and high taxes. It comes after the Chancellor toughened rules introduced by the Tories to phase out the non-dom tax regime, affecting those whose permanent home – or domicile – is deemed to be outside the UK for tax purposes. 01:16 PM BST Wall Street poised for jump after Japan trade deal US stock indexes rose in premarket trading after Donald Trump clinched a trade deal with Japan fueling hopes that there are more agreements to come. The pact will slash tariffs on Japanese cars from 27.5pc to 15pc, with duties on other goods dropping from 25pc to 15pc. Mr Trump said that EU representatives are headed to the negotiating table, igniting hopes for a breakthrough deal with Europe. While the EU emphasised its commitment to a negotiated solution, it is also preparing countermeasures in case of a deadlock, including a reported 30pc tariff on €100m of US goods. Elias Haddad, an analyst at Brown Brothers Harriman, said: 'Diminishing trade policy uncertainty is supporting risk assets. 'Nevertheless, several countries (notably the EU) face steeper tariff rates starting August 1 and higher levies pose a downside risk to US growth and upside risk to inflation.' Meanwhile, the S&P 500 notched its eighth record close in a month on Tuesday, buoyed by easing trade tensions, a resilient US economy, and upbeat second-quarter earnings. Tesla and Google-owner Alphabet are set to report after the bell on Wednesday. In premarket trading, the Dow Jones Industrial Average was up 0.5pc, the S&P 500 gained 0.4pc and the Nasdaq 100 was up 0.2pc. Futures tracking the domestically focused Russell 2000 small-cap index rose 0.9pc. 12:58 PM BST Trump created 'leverage' with tariff letters, says Bessent Donald Trump created a lot of leverage on trade with his tariff letters to trading partners, Scott Bessent has said after the US agreed a trade deal with Japan. Tokyo said it would accept 15pc tariffs on its goods entering the US and invest $550bn in the American economy, days after the President threatened the country with a 25pc tariff. Many analysts suggested the letters were a negotiating tool to secure a deal, rather than a promise to impose tariffs on August 1, as they threatened to do. The US treasury secretary told Bloomberg Television: 'President Trump is creating this leverage by saying: if you don't want to negotiate with me, I've sent you a letter with a high rate. 'Have at the high rate or come and negotiate in better fashion.' 12:15 PM BST EU 'to hit US with 30pc tariffs' The European Union has drawn up a €100bn (£86.6bn) retaliation plan against the US if Donald Trump hits the bloc with 30pc tariffs. The EU would impose a 30pc tariff on American products should talks break down, according to Bloomberg News. This would combine an already approved list of €21bn of tariffs on US goods with another list of €72bn worth of American items. The EU is racing to agree a trade deal with the US before President Trump's deadline of August 1. 11:56 AM BST EU 'priority' is securing US trade deal through talks The European Commission said it remained focused on achieving a negotiated outcome in trade talks with the United States after reports that France and Germany are pushing for a tougher stance. EU trade commissioner Maroš Šefčovič is due to speak with US commerce secretary Howard Lutnick this afternoon. 'While our priority is negotiations, we continue in parallel to prepare for all outcomes including potential additional countermeasures,' the Commission said. It comes amid reports Germany and France are rallying fellow EU members to back retaliation against US tariffs unless Washington compromises, according to the Financial Times. 11:41 AM BST Shares rally amid trade deal hopes Global shares have rallied after the US and Japan announced a trade deal. France's Cac 40 added 1.4pc in early trading to 7,854.75, while Germany's Dax gained 0.9pc to 24,260.62. Britain's FTSE 100 rose 0.6pc to 9,075.46. Tokyo's benchmark Nikkei 225 index gaining 3.5pc to 41,171.32 and Hong Kong's Hang Seng jumped 1.6pc to 25,538.07. Kathleen Brooks, an analyst at XTB, said: 'The trade agreement is undoubtedly good news for Japan.' She added: 'The US president also sealed a deal with the Philippines on Tuesday, and the US treasury secretary said that he would resume trade talks with China next week, ahead of the August 12 deadline for negotiations.' 11:33 AM BST Supreme Court overturns City traders' rate-rigging convictions Two financial market traders who were jailed for manipulating benchmark interest rates have had their convictions quashed at the Supreme Court. A panel of five justices ruled that former Citigroup and UBS trader Tom Hayes and Carlo Palombo, ex-vice president of euro rates at Barclays bank, had not been given a fair trial. Mr Hayes was jailed for 14 years after he was found guilty in 2015 of multiple counts of conspiracy to defraud over manipulating the London Inter-Bank Offered Rate (Libor) between 2006 and 2010. The sentence was later lowered to 11 years after an appeal. 10:26 AM BST South Korea to take close look at US-Japan trade deal South Korea will take a close look at the terms of a US-Japan trade deal, its industry minister said, as the country seeks to avoid heavy tariffs. Tokyo's trade deal with Washington will pile pressure on Seoul to achieve a similar tariff rate of 15pc or better before the deadline for negotiations on August 1, when 25pc levies are due to kick in. Japan and South Korea compete in areas like cars and steel. 'Investors see the Japan-US deal as a benchmark for the Korean deal,' said Kim Sung-rae, an analyst at Hanwha Investment & Securities, adding that the agreement 'would put pressure on Korean negotiators to come up with a similar, or better, deal'. South Korea's benchmark Kospi index edged up 0.2pc, while shares in carmakers and suppliers rallied. Hyundai Motor rose 7.3pc and Kia jumped 7.6pc. 09:52 AM BST China vice premier to attend US trade talks China has confirmed vice premier He Lifeng will attend trade talks with the United States next week in Sweden. US Treasury Secretary Scott Bessent announced the Stockholm negotiations this week, due to take place from July 27 to 30. A commerce ministry spokesman said the world's two largest economies will continue negotiating 'in the spirit of mutual respect, peaceful coexistence and win-win cooperation'. 09:29 AM BST Pound rises amid US-Japan trade deal The pound edged higher as the dollar continued to struggle in the wake of Donald Trump's tariff war. Sterling was up 0.1pc to $1.355 while the US currency gained 0.1pc versus the euro at $1.174. The yen hit its strongest level since July 11 at 147.2 per dollar after the US and Japan signed a trade deal. The dollar has also been hit by concerns about the independence of the Federal Reserve after the US president launched numerous attacks on its chair Jerome Powell, urging him to cut interest rates. Kevin Thozet, a member of the investment committee at Carmignac, said he expected the declines in dollar to continue. He blamed the 'eroding credibility of US institutions, weakened by constant attacks against Powell and Fed independence, the surge in political uncertainty triggered by the trade war, and the reinforced risk of local inflation de-anchoring fuelled by higher tariffs and loose fiscal stance'. 09:09 AM BST Chain aims to 'strengthen cooperation' with US at talks China said it will seek to 'strengthen cooperation' with the US at next week's trade talks in Stockholm. Officials from Beijing and Washington will meet in an effort to extend the mid-August deadline for tariffs to snap back to higher levels between the world's two largest economies. Fpreign ministry spokesman Guo Jiakun said: 'On the basis of equality, respect and mutual benefit... we will enhance consensus, reduce misunderstandings, strengthen cooperation and promote the stable, healthy and sustainable development of Sino-US relations.' US treasury secretary Scott Bessent said he would meet his Chinese counterparts in Stockholm next week for tariff talks. He told Fox Business he will be speaking with Chinese officials in the Swedish capital on Monday and Tuesday for a third round of high-level negotiations. Washington and Beijing slapped escalating, tit-for-tat levies on each other's exports earlier this year – reaching triple digit levels – stalling trade between the world's two biggest economies. However, shares on Hong Kong's Hang Seng jumped 1.4pc to 25,470.25 after the Mr Trump announced the US had agreed a trade deal with Japan. The Shanghai Composite index was little changed. Mr Guo said China said it 'always advocates' for trade talks. 'China always advocates that all parties solve economic and trade issues through equal dialogue and consultations, to protect a good environment for international economic and trade cooperation,' he said. 08:45 AM BST European stocks surge amid hopes for Trump trade deal European shares jumped after Donald Trump revived hopes for a trade deal with the EU following an agreement with Japan. The FTSE 100 rose as much as 0.5pc for a fifth session to a record high while the pan-European Stoxx 600 index gained 1pc, following three straight days of declines. The Cac 40 in Paris lead the pack among European indexes, jumping by as much as 1.4pc, while the Dax in Frankfurt climbed as much as 1pc. European car stocks led the rally with a 3.4pc rise, following huge jumps for Asian rivals like Honda and Toyota. Porsche and Mercedes-Benz gained 7.6pc and 5.8pc, respectively. President Trump struck a trade deal with Japan that lowers tariffs on car imports and spares Tokyo from punishing new levies on other goods in exchange for a $550bn (£406.5bn) package of US-bound investment and loans. The Japan deal included reduced 15pc tariffs for car exports to the US, down from 25pc before. Meanwhile, the prospects of an EU-US trade agreement improved after President Trump said on Tuesday that EU representatives would come for trade negotiations on Wednesday. 08:26 AM BST Borrowing costs rise amid hopes for further trade deals Government bond yields rose in the wake of Japan's trade deal with the US, which could precede to the exit of the country's prime minister. Amid a wider rise in government borrowing costs, the yield on 10-year UK gilts – a benchmark for the cost of servicing Britain's national debt – rose around five basis points to 5.44pc. Eurozone borrowing costs were also higher after Japan's 10-year bond yield jumped to its highest level since 2008. Thomas Mathews of Capital Economics said the US trade deal presented a mixed picture for Japan's debt market. Agreeing a deal 'removes an obstacle in the way' of further rises in interest rates from the Bank of Japan. 'Indeed, our sense is that investors are still underestimating how fast the central bank will hike this year and next,' he said. However, there are reports that Japan's prime minister Shigeru Ishiba is poised to resign following the completion of the deal, after losing his majority in upper house elections at the weekend. There have been concerns that a new government could push ahead with populist policies but Mr Matthew said Ishiba's resignation 'reduces the chances of a big fiscal splurge', which would ease pressure on long-term borrowing costs. 08:07 AM BST FTSE 100 climbs after US-Japan trade deal The FTSE 100 jumped after Donald Trump announced the US had agreed a trade deal with Japan. Britain's flagship stock index was up 0.4pc to 9,057.61 while the mid-cap FTSE 250 gained 0.3pc to 22,007.43. 07:51 AM BST Watch: Trump hails 'great deal for everybody' with Japan President Donald Trump posted his announcement of the Japan trade deal on his Truth Social platform: 07:50 AM BST Philippines agrees to pay 19pc tariffs in US trade deal Donald Trump announced a new 19pc tariff rate for goods from the Philippines after what he called a 'beautiful visit' by Philippine President Ferdinand Marcos Jr. to the White House. The new tariff rate is just below the 20pc threatened by Mr Trump earlier this month, but still above the 17pc rate set in April whenhe announced what he called reciprocal tariff rates for dozens of countries. It matches the 19pc rate announced for Indonesia and bests Vietnam's slightly higher rate of 20pc. President Trump said US goods would pay zero tariffs. He posted the news on his Truth Social media platform after meeting with Marcos in the Oval Office, where he had earlier signalled a deal could be reached during the visit. Gareth Leather of Capital Economics said: 'The impact on the Philippines economy from the trade deal is unlikely to be huge – the country is one of the least dependent economies in Asia on US final demand. 'However, it does remove at least some downside risks facing the country - the fact that the 19pc tariff rate is close to what other countries in the region are likely to face means they won't experience a loss of competitiveness vis-à-vis other countries in the region.' 07:43 AM BST European shares poised to climb over trade deal hopes European shares rose sharply in premarket trading amid hopes that Donald Trump's trade deal with Japan bodes well for an agreement with the EU. France's Cac 40 was up nearly 1pc while Dax futures gained 0.9pc amid hopes negotiators could avoid a 30pc tariff which the US president said he would impose on the bloc on August 1. The FTSE 100 was up 0.3pc ahead of the open. Deutsche Bank analyst Jim Reid said: 'The Japan deal has significantly raised hopes that the EU might also be able to reach a trade deal, as they've been threatened with 30pc tariffs on August 1. 'Indeed, Trump also announced a deal with the Philippines yesterday that would see them face a 19pc tariff.' 07:28 AM BST Japan's bond market hit after US trade deal Japan's government borrowing costs surged after it agreed to pay a 15pc tariff rate to the US. The 10-year Japan's bond yield surged by a whopping eight basis points to 1.58pc, hitting its highest level since the global financial crisis in 2008. Analysts said the trade deal reduced a major risk to the fragile Japanese economy, which would provide more scope for the Bank of Japan to raise interest rates to fight inflation. This was coupled with weak demand for an auction of 40 year Japanese bonds. The 30-year yield was up five basis points to 3.12pc. 07:19 AM BST Japan PM hails higher 15pc tariff rate Japan's prime minister Shigeru Ishiba hailed the deal with the US as 'the lowest figure among countries that have a trade surplus with the US'. Japan will pay a 15pc tariff following the trade deal, which is higher than the 10pc rate agreed by Britain for its car industry. However, Japan runs a trade surplus with the US worth nearly $70bn, compared to broadly balanced trade between the US and UK. Japan's US investment package includes loans and guarantees from Japanese government-affiliated institutions of up to $550bn to enable Japanese firms 'to build resilient supply chains in key sectors like pharmaceuticals and semiconductors,' Mr Ishiba said. Japan will also increase purchases of agricultural products such as US rice, a Trump administration official said. Mr Ishiba, who local media reported will soon resign after a bruising election defeat on Sunday, said the share of US rice imports may increase under its existing framework but that the agreement did 'not sacrifice' Japanese agriculture. 07:04 AM BST Good morning Thanks for joining me. Shares of carmakers accelerated at a rapid pace after Donald Trump struck a trade deal with Japan. Toyota shares in Tokyo surged by more than 15pc while Honda jumped more than 12pc after the agreement lowered tariffs on car imports and spares. The Nikkei 225, Japan's benchmark stock index, climbed 3.9pc to its highest in a year as the US agreed to cut tariffs on the world's fifth largest economy from a proposed 25pc to 15pc from August 1. In exchange, Japan will press ahead with a $550bn (£406.5bn) package of US-bound investment and loans. Japan's car sector accounts for more than a quarter of its exports to the US and President Trump had expressed frustration at the imbalance of trade in the motoring sector. He said last week: 'They sell us millions and millions of cars a year. We sell them no cars because they won't accept our cars. And they won't accept much of our agriculture either.' Announcing the trade deal overnight, President Trump wrote on Truth Social: 'I just signed the largest TRADE DEAL in history with Japan. 'This is a very exciting time for the United States of America, and especially for the fact that we will continue to always have a great relationship with the Country of Japan.' Here is what you need to know. 5 things to start your day Donald Trump announces 'massive' trade deal with Japan | Tokyo will invest $550 billion in the US in exchange for lower tariffs Labour's great rail revival has already hit the buffers | The decision to relaunch just one defunct train line has sparked anger and frustration across Britain Laws to allow UAE stake in The Telegraph approved by Lords | Peers vote to let foreign states take passive shareholdings in British newspapers of up to 15pc Mike Lynch's estate faces bankruptcy over £700m fraud ruling | Judge orders late tech tycoon's estate to compensate HP over 2011 sale of his software company Nuclear fusion start-up claims to have cracked alchemy | Silicon Valley company says discovery marks 'beginning of a new golden age' What happened overnight Japanese shares surged to a one-year high as the country struck a trade deal with the United States that lowers tariffs on its cars. President Donald Trump on Tuesday said a trade deal with Tokyo will include Japan paying a lower-than-threatened 15pc tariff on shipments to the US. It followed an agreement with the Philippines that will see the US collect a 19pc tariff rate on imports from there. Mr Trump also said representatives from the European Union were coming for trade negotiations on Wednesday. That stirred hopes for a deal with Europe, even as the EU was reportedly refining countermeasures in case of a deadlock before the August 1 deadline. Japan's Nikkei bolted 3.9pc higher as shares of carmakers surged on news the deal would cut the US car tariff to 15pc, from a proposed 25pc. Mazda Motor rallied 17pc, while Toyota Motor jumped 13.6pc. South Korean carmakers also rallied as the Japan deal fuelled optimism over potential progress in tariff negotiations between South Korea and the United States. Wall Street inched to another record on Tuesday following some mixed profit reports, as General Motors and other big US companies gave updates on how much Mr Trump's tariffs are hurting or helping them. The S&P 500 added 0.1pc to the all-time high it had set the day before, closing at 6,309.62. The Dow Jones Industrial Average rose 0.4pc to 44,502.44. The Nasdaq Composite slipped 0.4pc from its own record, to 20,892.68. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Boston Globe
2 hours ago
- Boston Globe
Zelensky faces backlash as Ukrainians protest new anti-corruption law
In the morning, Zelensky convened the heads of Ukraine's key anti-corruption and security agencies in response to the outcry against his decision to approve the law that was passed by parliament. 'We all hear what society says,' Zelensky wrote on Telegram after the meeting. But he insisted the new legal framework was needed to crack down harder on corruption. Advertisement 'Criminal cases should not drag on for years without verdicts, and those working against Ukraine must not feel comfortable or immune from punishment,' he said. Zelensky said all government agencies agreed to work constructively and respond to public expectations for fairness and effectiveness. A detailed joint action plan is expected within two weeks, aimed at addressing institutional weaknesses, removing legal hurdles, and ensuring justice across the board, he said. Thousands of people gathered in the capital and other cities Tuesday to urge Zelensky to veto the controversial bill. After he approved it, activists went on social media to call for another demonstration Wednesday night in central Kyiv. Advertisement Zelensky has been the international face of Ukraine's determination to defeat Russia's all-out invasion, and his domestic troubles are an unwelcome diversion from the war effort. The legislation tightens government oversight of two key anti-corruption agencies. Critics say the step could significantly weaken the independence of those agencies and give Zelensky's circle greater influence over investigations. EU officials warn of possible setback to joining bloc Fighting entrenched corruption is crucial for Ukraine's aspirations to join the EU and maintain access to billions of dollars in Western aid in the war. 'Limiting the independence of Ukraine's anti-corruption agency hampers Ukraine's way towards the EU,' German Foreign Minister Johann Wadephul warned in a post on X. EU Defense Commissioner Andrius Kubilius, also on X, noted: 'In war, trust between the fighting nation and its leadership is more important than modern weapons — difficult to build and to keep, but easy to lose with one significant mistake by the leadership.' The Ukrainian branch of Transparency International criticized the parliament's decision, saying it undermines one of the most significant reforms since 2014, when Ukrainians ousted a pro-Moscow president in what they called the Zelensky said the new law clears out 'Russian influence' from fighting corruption and ensures punishment for those found guilty of it. He cited years of delays in criminal proceedings involving huge amounts of money. 'The cases that have been lying dormant must be investigated,' he said in a Telegram post early Wednesday. 'For years, officials who have fled Ukraine have been casually living abroad for some reason –- in very nice countries and without legal consequences -– and this is not normal,' he said. Advertisement He didn't give examples of what he said was Russian interference. The legal changes in Ukraine would grant the prosecutor general new authority over investigations and cases handled by the National Anti-Corruption Bureau of Ukraine (NABU) and the Specialized Anti-Corruption Prosecutor's Office (SAPO). Prosecutor General Ruslan Kravchenko, appointed by Zelensky just over a month ago, said the anti-corruption watchdogs and other law enforcement agencies would keep working as before. 'The prosecutor general has only been granted broader powers and an increased scope of authority,' Kravchenko told a news conference as officials moved to ease public concern. The anger and frustration among war-weary Ukrainians prevailed in the crowd Tuesday. Some protesters accused Ukraine's leadership of prioritizing loyalty and personal connections over fighting corruption. 'Those who swore to protect the laws and the constitution have instead chosen to shield their inner circle, even at the expense of Ukrainian democracy,' said veteran Oleh Symoroz, who lost both legs after he was wounded in 2022. Russian officials relished Zelensky's difficulties, although Moscow faces its own series of corruption cases against government and military officials. A third round of direct talks on the war The third direct meeting between Russian and Ukrainian delegations in Turkey in as many months wasn't expected to make progress on ending the war and would likely focus on further exchanges of prisoners of war. Zelensky said the Ukrainian delegation in Istanbul 'will again insist on the need for an immediate and complete ceasefire, including ... strikes on civilian infrastructure.' Russian drone strikes knocked out power to more than 220,000 customers in Ukraine's northeastern Sumy region, Zelensky said on Telegram, adding that repairs restored most of the supply in hours. Advertisement Ukrainian and Western officials have accused the Kremlin of stalling in the talks in order for its bigger army to capture more Ukrainian land. Earlier this month, U.S. President Donald Trump threatened Russia with severe economic sanctions and said more American weapons, paid for by European countries, would go to Ukraine. Trump hardened his stance toward Moscow after months of frustration with Russian President Vladimir Putin about unsuccessful talks for a ceasefire. Trump gave Russia until early September to agree to a ceasefire.
