Latest news with #EU-U.S.
Qatar Tribune
a day ago
- Business
- Qatar Tribune
Eurozone growth falters as Germany shrinks, tariff headwinds mount
Agencies Europe's economy barely grew in the second quarter of the year, official data showed on Wednesday, as the rush to ship goods before new U.S. tariffs eased and output in Germany, the region's largest economy, unexpectedly declined. Gross domestic product (GDP) grew an anemic 0.1% compared to the previous quarter in the 20 countries that use the euro currency, the EU statistics agency Eurostat reported. And prospects are mediocre for the coming months, given the 15% tariff, or import tax, imposed on European goods in the U.S. under the EU-U.S. trade deal announced Sunday. The higher tariff will burden European exports with higher costs to either be passed on to U.S. consumers or swallowed in the form of lower profits. The eurozone growth still held up better than feared amid expectations for an unchanged reading in the second quarter, suggesting that businesses are adapting to trade uncertainty, potentially reducing the need for more European Central Bank (ECB) interest rate cuts to stimulate the bloc. Compared to the second quarter a year earlier, the bloc's economy expanded by 1.4%, ahead of expectations for 1.2%. The economy sagged after a stronger-than-expected 0.6% growth in the first quarter, a figure inflated by companies trying to move product ahead of U.S. President Donald Trump's additional tariff onslaught that was announced April 2, two days after the first quarter ended. When examined together, however, the first two quarters suggest resilience, supported by the most recent PMI reading, which showed that business activity accelerated faster than forecast, supported by a solid improvement in services and the continued recovery in manufacturing. Europe's economic powerhouse, Germany, unexpectedly shrank by 0.1% from the previous quarter. Italy's economy also contracted by 0.1% in the same period. Growth of 0.3% in France was boosted by a rise in auto and aircraft inventories, while domestic demand was otherwise stagnant. That left Spain as the only strong performer among the four largest eurozone economies at 0.7%. France's Economy Minister Eric Lombard said the figures for France demonstrated the country's companies were, however, proving resilient to U.S. tariff hikes. 'With the 15% U.S. universal tariff likely to subtract around 0.2% from the region's GDP, growth is likely to remain weak in the rest of this year,' said Franziska Palmas, senior Europe economist at Capital Economics. The 27-country EU economy expanded by 0.2% over the April-June period from the previous quarter, after registering 0.5% growth in the first three months of 2025. Germany's economy remains roughly the same size as it was before the pandemic six years ago, as its export-dominated business sector struggles with multiple issues, including stronger competition from China, a lack of skilled workers, higher energy prices, lagging infrastructure investment, and burdensome regulation and bureaucracy. Palmas said that Germany 'is likely to be hit harder than other major economies by tariffs and continue to struggle this year' before increased government spending from the new government under Chancellor Friedrich Merz, aimed at boosting defense and making up the infrastructure gap, starts to boost the economy in 2026. Economists also argue that a sharp increase in budget spending from next year could be a boost to growth that will offset much of the tariffs' impact. This economic resilience is a key factor why financial investors think the ECB is close to done easing borrowing costs after halving its key rate to 2% in the past 13 months. Markets see just a 50% chance of another cut by December and a small chance that rates will actually start rising toward the end of 2026 as the economy gathers speed and price pressure starts rising is far from over, however. The EU has yet to sign its trade deal with the U.S., and plenty of details remain to be worked out, indicating that it could take months for businesses to gain the confidence to make investment decisions. China has also yet to strike a deal with the U.S., raising fears that Beijing will be forced to dump surplus goods on the rest of the world, depressing prices elsewhere. Such dumping could then lower eurozone inflation and force the ECB into cutting interest rates on fears that below-target inflation, its main worry in the pre-pandemic decade, is returning.
a day ago
- Business
European economy sees growth of only 0.1% as scramble to get ahead of US tariffs goes into reverse
FRANKFURT, Germany -- Europe's economy barely grew in the April-June quarter as frantic earlier efforts to ship goods ahead of new U.S. tariffs went into reverse and output fell for the continent's biggest economy, Germany. Gross domestic product grew an anemic 0.1% compared to the previous quarter in the 20 countries that use the euro currency, the EU statistics agency Eurostat reported Wednesday. Growth was 1.4% over the same quarter a year ago. And prospects are mediocre for the coming months, given the 15% tariff, or import tax, imposed on European goods in the U.S. under the EU-U.S. trade deal announced Sunday. The higher tariff will burden European exports with higher costs to either be passed on to U.S. consumers or swallowed in the form of lower profits. The economy sagged after stronger than expected 0.6% growth in the first quarter, a figure inflated by companies trying to move product ahead of U.S. President Donald Trump's additional tariff onslaught that was announced April 2, two days after the first quarter ended. Output fell 0.1% in Germany and Italy, while growth of 0.3% in France was boosted by a rise in auto and aircraft inventories while domestic demand was otherwise stagnant. That left Spain as the only strong performer among the four largest eurozone economies at 0.7% 'With the 15% U.S. universal tariff likely to subtract around 0.2% from the region's GDP, growth is likely to remain weak in the rest of this year,' said Franziska Palmas, senior Europe economist at Capital Economics. Germany's economy remains roughly the same size as it was before the pandemic six years ago, as its export-dominated business sector struggles with multiple issues including stronger competition from China, a lack of skilled workers, higher energy prices, lagging infrastructure investment, and burdensome regulation and bureaucracy. Economist Palmas said that Germany "is likely to be hit harder than other major economies by tariffs and continue to struggle this year" before increased government spending from the new government under Chancellor Friedrich Merz, aimed at making up the infrastructure gap, starts to boost the economy in 2026. On Wednesday, Germany's Cabinet approved a draft 2026 budget that foresees a second consecutive year of record government investment in priorities such as modernizing transport infrastructure, building homes, security and digitization. Spending is set to rise to 126.7 billion euros ($146.2 billion) next year from 115.7 billion euros in 2025. 'Our top priority is to secure jobs and ensure new economic strength,' Finance Minister Lars Klingbeil said. ___
Yahoo
a day ago
- Automotive
- Yahoo
Lamborghini's half-year operating profit slips on currency effects
MILAN (Reuters) -Italian luxury sports car maker Lamborghini said on Wednesday its operating income fell slightly in the first half even as it delivered record numbers of cars to customers, as currency effects weighed on its bottom line. Operating income stood at 431 million euros ($497 million) in the January to June period versus 458 million euros a year earlier, primarily due to unfavourable exchange rate trends in the second quarter, the company said in a statement. "The results... are solid despite global economic and political instability," CEO Stephan Winkelmann said. Net revenues amounted to 1.62 billion euros in the period as the carmaker, part of Germany's Volkswagen, delivered 5,681 cars, its highest amount ever for a first half. Its operating profit margin fell to 26.6% from 28.3% a year earlier. Winkelmann said the results confirmed that a decision to make all Lamborghini's range hybrid was the right one, as shown by the success of the Revuelto sportscar, its first plug-in hybrid, launched in 2023, and of the Urus SE SUV. "Our vision is shared by our customers," he said. "We now look forward to the market launch of the Temerario, which will complete the first fully hybrid range in the segment". Lamborghini, based near Bologna in Northern Italy, did not make any reference to Sunday's EU-U.S. framework trade deal, which imposed a 15% U.S. import tariff on most EU goods, despite the Americas region accounting for around 30% of its deliveries in the first half, or 1,732 cars. The Europe, Middle East and Africa region led deliveries in the period with 2,708 units, while Asia Pacific accounted for 1,241 units. Earlier this year Winkelmann said U.S. tariffs would have an impact on Lamborghini's revenue even though luxury product makers can pass on potential tariffs to customers, as there was a "sweet point" beyond which "you lose volumes". ($1 = 0.8672 euros)
Yahoo
a day ago
- Business
- Yahoo
European economy sees growth of only 0.1% as scramble to get ahead of US tariffs goes into reverse
FRANKFURT, Germany (AP) — Europe's economy barely grew in the April-June quarter as frantic earlier efforts to ship goods ahead of new U.S. tariffs went into reverse and output fell for the continent's biggest economy, Germany. Gross domestic product grew an anemic 0.1% compared to the previous quarter in the 20 countries that use the euro currency, the EU statistics agency Eurostat reported Wednesday. Growth was 1.4% over the same quarter a year ago. And prospects are mediocre for the coming months, given the 15% tariff, or import tax, imposed on European goods in the U.S. under the EU-U.S. trade deal announced Sunday. The higher tariff will burden European exports with higher costs to either be passed on to U.S. consumers or swallowed in the form of lower profits. The economy sagged after stronger than expected 0.6% growth in the first quarter, a figure inflated by companies trying to move product ahead of U.S. President Donald Trump's additional tariff onslaught that was announced April 2, two days after the first quarter ended. Output fell 0.1% in Germany and Italy, while growth of 0.3% in France was boosted by a rise in auto and aircraft inventories while domestic demand was otherwise stagnant. That left Spain as the only strong performer among the four largest eurozone economies at 0.7% 'With the 15% U.S. universal tariff likely to subtract around 0.2% from the region's GDP, growth is likely to remain weak in the rest of this year,' said Franziska Palmas, senior Europe economist at Capital Economics. Germany's economy remains roughly the same size as it was before the pandemic six years ago, as its export-dominated business sector struggles with multiple issues including stronger competition from China, a lack of skilled workers, higher energy prices, lagging infrastructure investment, and burdensome regulation and bureaucracy. Economist Palmas said that Germany "is likely to be hit harder than other major economies by tariffs and continue to struggle this year" before increased government spending from the new government under Chancellor Friedrich Merz, aimed at making up the infrastructure gap, starts to boost the economy in 2026. On Wednesday, Germany's Cabinet approved a draft 2026 budget that foresees a second consecutive year of record government investment in priorities such as modernizing transport infrastructure, building homes, security and digitization. Spending is set to rise to 126.7 billion euros ($146.2 billion) next year from 115.7 billion euros in 2025. 'Our top priority is to secure jobs and ensure new economic strength,' Finance Minister Lars Klingbeil said. ___ Geir Moulson contributed from Berlin. Sign in to access your portfolio
Yahoo
a day ago
- Business
- Yahoo
World shares are mixed after China-US talks end without a trade deal
BANGKOK (AP) — World shares were mixed on Wednesday after the U.S. and China ended their latest round of trade talks without a deal. The latest data showed Europe's economy barely grew in the April-June quarter as frantic earlier efforts to ship goods ahead of new U.S. tariffs went into reverse and Germany's economy contracted. The outlook for coming months is mediocre given the 15% tariff imposed on European goods in the U.S. under a EU-U.S. trade deal announced Sunday. The higher tariff will burden European exports with higher costs to either be passed on to U.S. consumers or swallowed in the form of lower profits. Germany's DAX rose 0.2% to 24,274.40, while the CAC 40 in Paris gained 0.6% to 7,907.33. Britain's FTSE 100 shed 0.3% to 9,114.09. The future for the S&P 500 gained nearly 0.1% while that for the Dow Jones Industrial Average was barely changed. Beijing's top trade official said China and the United States agreed during two days of talks in Stockholm, Sweden, to work on extending an Aug. 12 deadline for imposing higher tariffs on each other. The U.S. side said an extension was discussed, but not decided on. Treasury Secretary Scott Bessent said President Donald Trump would make that call. If there is no extension, tariffs could 'boomerang' back to higher levels, he said. China's powerful Politburo met Wednesday and promised help for companies hit by trade shocks, but held back on any specific large government spending commitments. 'It did leave the door open to more support being introduced in future, but the urgency around stimulus appears to have diminished as trade tensions have eased,' Julian Evans-Pritchard of Capital Economics said in a report. A Friday deadline is looming for many of Trump's proposed tariffs on other countries. Several highly anticipated economic reports are also on the way, including the latest monthly update on the job market. 'Markets had been floating on a cloud of trade optimism — first Japan, then the EU — but the sugar high is wearing off. Now, with U.S.-China talks dragging on in Stockholm, there's a growing sense that the momentum is stalling,' Stephen Innes of SPI Asset Management said in a commentary. Hong Kong's Hang Seng index shed 1.4% to 25,176.93, while the Shanghai Composite index gained 0.2% to 3,615.72. Tokyo's Nikkei 225 index fell less than 0.1% to 40,654.70. Gains for electronics companies were offset by losses for major exporters like Toyota Motor Corp. and Honda Motor Co. Australia's S&P/ASX 200 climbed 0.6% to 8,756.40 and in South Korea, the Kospi gained 0.7% to 3,254,47. Taiwan's Taiex rose 1.1%. In India, the Sensex added 0.2%. On Tuesday, U.S. stock indexes edged back from their record levels as a busy week for Wall Street picked up momentum. The S&P 500 fell 0.3% and the Dow lost 0.5%. The Nasdaq composite was down 0.4%. Treasury yields sank as the Federal Reserve began a two-day meeting on interest rates. Despite pressure from President Donald Trump for lower rates, which would give the economy a boost, the widespread expectation is that the Fed will wait for more data about how Trump's tariffs are affecting inflation and the economy before making its next move. The U.S. economy appears to be slowing. One report Tuesday said that U.S. employers were advertising fewer job openings at the end of June than a month before, though still more than economists expected. A separate report said confidence rose among U.S. consumers, but a measure of their expectations about the near term remains below the level that typically signals a recession ahead. In other dealings early Wednesday, U.S. benchmark crude oil shed 57 cents to $68.64 per barrel, while Brent crude, the international standard, gave up 58 cents to $71.10 per barrel. The dollar fell to 148.20 Japanese yen from 148.48 yen. The euro slipped to $1.1542 from $1.1546. 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
