Can Germany reinvent its economy?
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Reuters
2 hours ago
- Reuters
US and EU clinch deal with 15% US tariff on most EU exports to avert trade war
TURNBERRY, Scotland, July 27 (Reuters) - The United States struck a framework trade deal with the European Union on Sunday, imposing a 15% import tariff on most EU goods, but averting a spiralling battle between two allies which account for almost a third of global trade. The announcement came after European Commission President Ursula von der Leyen travelled for talks with U.S. President Donald Trump at his golf course in western Scotland to push a hard-fought deal over the line. "I think this is the biggest deal ever made," Trump told reporters after an hour-long meeting with von der Leyen, who said the 15% tariff applied "across the board". "We have a trade deal between the two largest economies in the world, and it's a big deal. It's a huge deal. It will bring stability. It will bring predictability," she said. The deal, which also includes $600 billion of EU investments in the United States and $750 billion of EU purchases of U.S. energy over Trump's second term, will indeed bring clarity for EU companies. Even so, the baseline 15% tariff will be seen by many in Europe as a poor outcome compared with the initial European ambition of a zero-for-zero tariff deal, although it is better than the threatened 30% rate. German Chancellor Friedrich Merz welcomed the deal, saying in a statement that a trade conflict had been averted that would have hit Germany's export-driven economy and its large auto sector hard. But Bernd Lange, the German Social Democrat who chair's the trade committee of the European Parliament, said he was "quite critical" because the tariffs were imbalanced and the pledged $600 billion of investment would likely come at the expense of EU industry. The euro rose around 0.2% against the dollar, sterling and yen within an hour of the deal's being announced. The deal mirrors key parts of the framework agreement the United States clinched with Japan last week. "We are agreeing that the tariff ... for automobiles and everything else will be a straight-across tariff of 15%," Trump said. That rate will not, however, apply to steel and aluminium, for which a 50% tariff will remain in place, although von der Leyen said it would be cut and replaced with a quota system. Von der Leyen said the rate also applied to semiconductors and pharmaceuticals, and there would be no tariffs from either side on aircraft and aircraft parts, certain chemicals, certain generic drugs, semiconductor equipment, some agricultural products, natural resources and critical raw materials. "We will keep working to add more products to this list," she said, adding that the situation on spirits was still to be established. Eric Winograd, chief economist at AllianceBernstein in New York, noted the similarity with Japan's U.S. deal. "We will need to see how long the sides stick to the deal. From a market perspective, it is reassuring in the sense that having a deal is better than not having a deal," he said. Trump, who is seeking to reorder the global economy and reduce decades-old U.S. trade deficits, has so far reeled in agreements with Britain, Japan, Indonesia and Vietnam, although his administration has failed to deliver on a promise of "90 deals in 90 days." He has periodically railed against the European Union, saying it was "formed to screw the United States" on trade. Arriving in Scotland, Trump said the EU wanted "to make a deal very badly" and said, as he met von der Leyen, that Europe had been "very unfair to the United States". His main bugbear is the U.S. merchandise trade deficit with the EU, which in 2024 reached $235 billion, according to U.S. Census Bureau data. The EU points to the U.S. surplus in services, which it says partially redresses the balance. Trump also talked on Sunday about the "hundreds of billions of dollars" that tariffs were bringing in. On July 12, Trump threatened to apply a 30% tariff on imports from the EU starting on August 1, after weeks of negotiations with the major U.S. trading partners failed to reach a comprehensive trade deal. The EU had prepared countertariffs on 93 billion euros ($109 billion) of U.S. goods in the event there was no deal, and Trump had pressed ahead with 30% tariffs. Some member states had also pushed for the bloc to use its most powerful trade weapon, the anti-coercion instrument, to target U.S. services in the event of a no-deal.
South Wales Guardian
18 hours ago
- South Wales Guardian
UK working on plans to air drop aid into Gaza, PM says
The Prime Minister held emergency talks with Emmanuel Macron and Friedrich Merz on Saturday amid mounting global anger at the humanitarian conditions in the enclave. In a readout of the call, Number 10 said the leaders had agreed 'it would be vital to ensure robust plans are in place to turn an urgently-needed ceasefire into lasting peace'. 'The Prime Minister set out how the UK will also be taking forward plans to work with partners such as Jordan to air drop aid and evacuate children requiring medical assistance,' a Downing Street spokesperson said. However, the head of the UN's Palestinian refugee agency warned airdrops were 'a distraction and screensmoke' that would fail to reverse deepening starvation in Gaza, and could in some cases harm civilians. UNRWA chief Philippe Lazzarini said on Saturday: 'A man-made hunger can only be addressed by political will. Lift the siege, open the gates and guarantee safe movements and dignified access to people in need.' Israel said on Saturday it was allowing UN convoys to transport aid into Gaza, as well as airdrops, and that it had reconnected power to a desalination plant into the territory, where there is widespread devastation. The readout made no mention of the issue of Palestinian statehood, which the Prime Minister has faced calls to immediately recognise after French President Mr Macron confirmed his country would do so in September. However, Downing Street said the leaders had committed to 'work closely together on a plan' to 'pave the way to a long-term solution and security in the region'. Once the proposals have been 'worked up', they will seek to advance them with other key partners, including in the region, the readout said. Some 221 MPs from Labour, the Conservatives, Liberal Democrats, SNP, Greens, Plaid Cymru, SDLP and independents have signed a letter pressuring the Government to follow suit at a UN meeting next week. Sarah Champion, the senior Labour MP who organised the letter by parliamentarians, said recognition 'would send a powerful symbolic message that we support the rights of the Palestinian people'. Other senior Commons figures who signed the letter include Labour select committee chairs Liam Byrne, Dame Emily Thornberry and Ruth Cadbury. Lib Dem leader Sir Ed Davey, as well as Tory former minister Kit Malthouse, and Sir Edward Leigh – Parliament's longest-serving MP – also signed it. The majority of those who have signed, 131, are Labour MPs. The Government has so far said its immediate focus is on getting aid into the territory and insisted that recognising statehood must be done as part of a peace process. Charities operating in Gaza have said Israel's blockade and ongoing military offensive are pushing people there towards starvation, warning that they are seeing their own workers and Palestinians 'waste away'. But Mr Lazzarini said airdrops can be dangerous as they can fall on civilians, and that being able to drive aid through is more effective and safer. 'Airdrops will not reverse the deepening starvation. They are expensive, inefficient and can even kill starving civilians,' he said. 'It is a distraction and screensmoke.' In a statement on Saturday, the Israel Defence Forces (IDF) said 'airdrops of aid will resume' including 'seven pallets of aid containing flour, sugar, and canned food'. It said it would allow 'safe movement of UN convoys delivering food and medicine' but that the military 'emphasises that combat operations have not ceased'. The state also said that there was 'no starvation' in Gaza, despite increasing accounts of malnutrition and starvation-related deaths. US President Donald Trump has suggested Mr Macron's announcement, which saw him commit to formally recognising Palestinian statehood at the UN General Assembly in September, 'doesn't matter'. The Prime Minister will meet the US president during his trip to Scotland, where he arrived on Friday evening. Ceasefire talks have been at a standstill after the US and Israel recalled negotiating teams on Thursday, with Washington's special envoy Steve Witkoff accusing Hamas of a 'lack of desire to reach a ceasefire'. Foreign Secretary David Lammy's opposite number Dame Priti Patel said she had 'repeatedly pressed' him on 'what specific and deliverable solutions he is trying to advance on aid'. 'The British Government needs to be leveraging its influence and the UK's considerable aid expertise to bring about practical solutions that alleviate the dire and deteriorating humanitarian situation in Gaza,' she said. 'The priority must be to get as much aid in as possible, delivered safely and exclusively to innocent civilians. 'Diplomacy is about finding solutions, not just issuing condemnations.' Meanwhile, Israel's ambassador to the UK said recognising Palestinian statehood would 'reward' hostage-taking and killing by Hamas. 'Recognising a Palestinian state in a post-October 7 reality would be nothing less than a reward for terrorism,' she wrote in the Telegraph.
Leader Live
a day ago
- Leader Live
UK working on plans to air drop aid into Gaza, PM says
The Prime Minister held emergency talks with Emmanuel Macron and Friedrich Merz on Saturday amid mounting global anger at the humanitarian conditions in the enclave. In a readout of the call, Number 10 said the leaders had agreed 'it would be vital to ensure robust plans are in place to turn an urgently-needed ceasefire into lasting peace'. 'The Prime Minister set out how the UK will also be taking forward plans to work with partners such as Jordan to air drop aid and evacuate children requiring medical assistance,' a Downing Street spokesperson said. However, the head of the UN's Palestinian refugee agency warned airdrops were 'a distraction and screensmoke' that would fail to reverse deepening starvation in Gaza, and could in some cases harm civilians. UNRWA chief Philippe Lazzarini said on Saturday: 'A man-made hunger can only be addressed by political will. Lift the siege, open the gates and guarantee safe movements and dignified access to people in need.' Israel said on Saturday it was allowing UN convoys to transport aid into Gaza, as well as airdrops, and that it had reconnected power to a desalination plant into the territory, where there is widespread devastation. The readout made no mention of the issue of Palestinian statehood, which the Prime Minister has faced calls to immediately recognise after French President Mr Macron confirmed his country would do so in September. However, Downing Street said the leaders had committed to 'work closely together on a plan' to 'pave the way to a long-term solution and security in the region'. Once the proposals have been 'worked up', they will seek to advance them with other key partners, including in the region, the readout said. Some 221 MPs from Labour, the Conservatives, Liberal Democrats, SNP, Greens, Plaid Cymru, SDLP and independents have signed a letter pressuring the Government to follow suit at a UN meeting next week. Sarah Champion, the senior Labour MP who organised the letter by parliamentarians, said recognition 'would send a powerful symbolic message that we support the rights of the Palestinian people'. Other senior Commons figures who signed the letter include Labour select committee chairs Liam Byrne, Dame Emily Thornberry and Ruth Cadbury. Lib Dem leader Sir Ed Davey, as well as Tory former minister Kit Malthouse, and Sir Edward Leigh – Parliament's longest-serving MP – also signed it. The majority of those who have signed, 131, are Labour MPs. The Government has so far said its immediate focus is on getting aid into the territory and insisted that recognising statehood must be done as part of a peace process. Charities operating in Gaza have said Israel's blockade and ongoing military offensive are pushing people there towards starvation, warning that they are seeing their own workers and Palestinians 'waste away'. But Mr Lazzarini said airdrops can be dangerous as they can fall on civilians, and that being able to drive aid through is more effective and safer. 'Airdrops will not reverse the deepening starvation. They are expensive, inefficient and can even kill starving civilians,' he said. 'It is a distraction and screensmoke.' In a statement on Saturday, the Israel Defence Forces (IDF) said 'airdrops of aid will resume' including 'seven pallets of aid containing flour, sugar, and canned food'. It said it would allow 'safe movement of UN convoys delivering food and medicine' but that the military 'emphasises that combat operations have not ceased'. The state also said that there was 'no starvation' in Gaza, despite increasing accounts of malnutrition and starvation-related deaths. US President Donald Trump has suggested Mr Macron's announcement, which saw him commit to formally recognising Palestinian statehood at the UN General Assembly in September, 'doesn't matter'. The Prime Minister will meet the US president during his trip to Scotland, where he arrived on Friday evening. Ceasefire talks have been at a standstill after the US and Israel recalled negotiating teams on Thursday, with Washington's special envoy Steve Witkoff accusing Hamas of a 'lack of desire to reach a ceasefire'. Foreign Secretary David Lammy's opposite number Dame Priti Patel said she had 'repeatedly pressed' him on 'what specific and deliverable solutions he is trying to advance on aid'. 'The British Government needs to be leveraging its influence and the UK's considerable aid expertise to bring about practical solutions that alleviate the dire and deteriorating humanitarian situation in Gaza,' she said. 'The priority must be to get as much aid in as possible, delivered safely and exclusively to innocent civilians. 'Diplomacy is about finding solutions, not just issuing condemnations.' Meanwhile, Israel's ambassador to the UK said recognising Palestinian statehood would 'reward' hostage-taking and killing by Hamas. 'Recognising a Palestinian state in a post-October 7 reality would be nothing less than a reward for terrorism,' she wrote in the Telegraph.
