China growth beats forecasts even as US tariff fears mount
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Daily Mail
38 minutes ago
- Daily Mail
EXCLUSIVE The 'massive' extent of new U.S. lethal arms package to Ukraine revealed as Republicans debate sending more aid
NATO Secretary Mark Rutte said the new flow of arms form the U.S. to Ukraine will be 'massive' – with further munitions packages to follow following talks with President Trump. Rutte described the package in comments to the Daily Mail as he briefed lawmakers on a scheme to use the new financing proposal to funnel lethal weaponry to Ukraine as it staves off repeated Russian drone and missile attacks. The former Dutch PM is meeting with lawmakers still assessing President Donald Trump 's sudden U-turn on Ukraine – if the president applying new pressure on Moscow even while continuing to say American taxpayers have borne too much of the burden, and has publicly refused to pick sides in the war. 'How do you say it in English? Infinite – it's not finite,' Rutte told the Daily Mail between meetings in the Senate. 'This will be packages designed … to make sure that Ukrainians get a handle what they need, of course, taking into account what US can deliver, because you also still have to make sure that you have enough stuff and gear here to defend yourselves,' he said. 'But this is potentially massive. And not only air defense, it is also missiles and ammunition,' he added. He stressed that the proposal is designed to make sure that 'you have enough in stock for yourself,' amid concerns among top Pentagon officials who ordered a temporary pause to aid while it assessed U.S. stockpiles. He said the 'potentially massive air defense, plus missiles and ammunition' packages still had to be arranged at the granular level. 'But NATO is good at this, because we have designed these packages over three and a half years now with Ukrainian.' Rutte spoke a day after meeting with Trump in the office. The president deferred to Rutte in response to a question by the Daily Mail about whether there was a ceiling on what the Europeans are willing to meet. 'It's not that you can have a shopping list and you can order whatever you want, because the U.S. has to make sure that the U.S. keeps his hands on what US needs also to keep the whole world safe. Because in the end, you are the police agent of the whole world.' He brought up Germany and other major NATO allies 'talking about big numbers.' 'They are really enthusiastic about this. They're willing to go very far, I will tell you,' Trump added. As he left the White House today, Trump denied a key element of Financial Times report that Trump had a fiery conversation with Ukrainian President Volodymyr Zelensky July 4 where he encouraged the Ukrainian to strike deep inside Russian territory. 'Volodymyr, can you hit Moscow? . . . Can you hit St Petersburg too?' Trump asked his counterpart, according to the report. Asked if Zelensky should target Moscow, Trump replied: 'No, he shouldn't target Moscow.' Trump defended his latest statements toward Russia – that he will impose 'secondary tariffs' after 50 days if there is no deal with Moscow. 'What we decided is us making up its stockpiles available for Ukraine, paid for better Europeans, in a way, of course, that you have enough in stock for yourself. Potentially massive air defense, plus missiles and ammunition. But of course, all the details now will be work through.
The Guardian
40 minutes ago
- The Guardian
US inflation rose in June as Trump's tariffs start to show in prices
Inflation accelerated in June as the impacts of Donald Trump's tariffs slowly started to show in US prices. Business leaders have said for months that the high, volatile rates of Trump's tariffs will force companies to raise consumer prices. Prices remained stable in the spring, particularly as many of Trump's highest tariffs were paused; however, they started increasing in May and have continued to rise in June. Annual inflation rose to 2.7% in June, up from 2.4% in May, according to the Consumer Price Index (CPI), which tracks the prices of a basket of goods and services each month. Core CPI, which leaves out energy and food prices, ticked up slightly to 2.9%, compared with 2.8% in May. The prices of appliances, furniture and toys, products typically manufactured outside the US, all rose. Food prices increased by 3%, with the price of beef rising by more than 2% over the month, coffee up 2.2% and citrus fruit prices rising 2.3%. While the price of eggs has been dropping over the last few months, a dozen eggs are still 27% more expensive than last year. Inflation remains far below the price peaks seen three years ago, when price increases reached as high as 9%, and even a year ago, when increases were closer to 3%. But tariffs have appeared to halt inflation's downward path. According to the Yale Budget Lab, Americans now face an average tariff rate of 18.7% – the highest rate since 1933. That includes 30% tariffs on China, a 50% tariff on steel and aluminum, 25% on auto parts and a universal 10% tariff on all imports. The levies currently in effect do not include those Trump is threatening to impose on other large US trading partners. Over the weekend, Trump threatened the EU and Mexico with 30% tariffs and Canada with a 35% tariff. Brazil is set to face 50% tariffs as punishment for the trial of the Trump ally Jair Bolsonaro, Brazil's former president, who is facing charges of attempting a coup. Prices will probably be pushed up much higher should these tariff rates go into effect, but it is unclear if and when that could happen. Trump initially set negotiation deadlines to 9 July, but pushed it back to 1 August as the date approached. Trump's trade advisers have said they aim to end negotiations by Labor Day at the beginning of September. Reacting to the latest inflation news, Trump renewed his call for the Federal Reserve to cut interest rates. 'Consumer Prices LOW. Bring down the Fed Rate, NOW!!!,' Trump wrote on Truth Social. As prices remain volatile, the Fed appears unlikely to adjust interest rates anytime soon, despite cutting rates three times in the fall. Fed officials, including the central bank's chair, Jerome Powell, have said that price increases are expected to continue in the summer, drawing away from the Fed's 2% inflation target.
Times
an hour ago
- Times
Europe needs faster economic growth, not an unnecessary trade war
Having been in Paris for a few days — not a state visit, although I did see some of the Bastille Day military parade — I thought it was time to write about Europe's economy. Judging by the crowds flocking to see an excellent exhibition by one of our most successful exporters, the artist David Hockney, the entente cordiale is in pretty good shape. Anyway, there are two reasons for writing about Europe's economy. The first is the euro and the eurozone economy, which continue to defy predictions of impending disaster. The second is to counter some high-profile nonsense about the wider European Union economy. It is little more than ten years since the euro went through the darkest hours in its short history: the eurozone crisis that almost resulted in 'Grexit', Greece's departure, with widespread predictions that Italy would also soon follow it out of the door. Marine Le Pen, leader of France's populist National Front, now called National Rally, then favoured 'Frexit' from the euro and the EU, although does not now. • EU has few cards with Donald Trump, and it's bad at playing them The euro survived, has been strong recently, and a few days ago it was announced that on January 1 next year it will add its 21st member, Bulgaria. Founded at the start of 1999 with 11 members — Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain — its most recent new member was Croatia two years ago. It joined other later members, namely Greece, Slovenia, Cyprus, Malta, Slovakia, Estonia, Latvia and Lithuania. It is an academic question now, but I was always strongly against the UK joining the euro, even though it was one of the hottest topics in British politics 20 years ago. The late Eddie George, Lord George, the former Bank of England governor, put it well when he said that we would have been the elephant in the rowing boat, risking capsizing both it and us. Our two previous flirtations with European currency arrangements, the 'snake' in the early 1970s and the European exchange rate mechanism (ERM) in the early 1990s, had both ended in disaster. For countries that joined and stuck with the euro, apart from convenience, membership has brought wider credibility benefits, lowering the cost of government borrowing. Against 10-year UK gilt yields approaching 4.6 per cent, their eurozone equivalents are in a range of 2.69 per cent (Germany) to 3.55 per cent (Italy). New eurozone members have bought into that credibility. Croatian 10-year government bond yields are around 3.15 per cent. Our government would love to be able to borrow that cheaply. • Strength of sterling offers holidaymakers alternatives to America The eurozone is always associated with slow growth and has recently been dragged down by very weak growth in Germany, although that may now be changing. Despite this, the eurozone has comfortably outgrown the UK since the EU referendum in 2016 and formal Brexit on January 31, 2020. It is on this growth point that a corrective is due. A few days ago, Jamie Dimon, chief executive of JP Morgan Chase, one of the most influential men in finance, was blunt, telling a conference in Dublin that the EU's gross domestic product had slumped from 90 per cent of US GDP to just 65 per cent in the past ten to 15 years. 'That's not a good sign. You are losing,' he said. While Dimon had some good points to make in his speech, highlighting the EU's lack of enough global-scale companies and the need to complete the EU's single market in services, particularly financial services, this was a schoolboy error. What he was describing was an exchange rate effect. Fifteen or so years ago, during and after the financial crisis, the euro was a lot stronger against the dollar, reaching a peak of nearly $1.60. Converting the EU's GDP, measured in euros, to dollars thus gave a high figure. The euro's subsequent drop against the dollar — it briefly fell below parity last year and is currently around $1.17 — thus explains most of the fall in EU GDP measured in dollar terms. • EU GDP driven by surge in Irish economy Fortunately, economists have a way of dealing with this obvious distortion, adjusting exchange rates for what is known as purchasing power parity, which takes into account different price levels. On this basis, according to World Bank data, the EU's GDP was 97 per cent of that of America in 2010 and 96 per cent last year. A better measure, GDP in purchasing power parity adjusted also for inflation, probably gives a fairer picture. Measured this way, the EU's GDP was slightly bigger than that of America through the 2010s but a crossover occurred in 2020, when the UK left. Last year, the EU's GDP was 95 per cent of that of the US. Although proper comparisons show the EU in a better light, this leaves no room for complacency. The EU's population is roughly 450 million, compared with 333 million for the US. EU per capita GDP, properly measured, is about 72 per cent of America's, with the UK slightly below the EU average. Within the EU, only Luxembourg and Ireland exceed US per capita GDP, each for special and somewhat distorted reasons, though Denmark and the Netherlands also come close. When it comes to growth, America has done well in recent years, pulling away during Joe Biden's presidency and the pandemic and Russia invasion, growing more than twice as fast as the eurozone and three times as fast as the UK since late 2019. Latest figures suggest that growth is just about holding up in the EU but it faces the potential wrecking ball of Donald Trump's 30 per cent tariffs and is threatening to retaliate, which would harm European consumers. There is no justification, of course, for Trump's tariffs. The EU's overall trade surplus with the US last year, taking account of goods and services, was a modest €50 billion (£43 billion), less than 3 per cent of bilateral trade. Markets think the US president's bark is worse than his bite and that recent experience suggests he will chicken out on tariffs. Political leaders cannot, however, rely on that. Europe needs faster growth, not a growth-sapping trade war. David Smith is Economics Editor of The Sunday Times
