Trump Tariffs

Published on
14/07/2025 – 10:22 GMT+2

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Investors in Europe reeled from US President Donald Trump’s tariff threats on Monday morning, sending the major indexes into negative territory.

As of around 9.30am CEST, France’s CAC 40 was down 0.52% at 7,788.23, the UK’s FTSE 100 slipped 0.38% to 8,941.12, and Germany’s DAX dropped 0.85% to 24,049.73.

Spain’s IBEX 35 fell 0.80% to 13,897.80, while Italy’s FTSE MIB dropped 0.86% to 39,726.27.

The STOXX 600 slid 0.48% to 544.73 and the STOXX 50 fell 0.83% to 5,338.57.

The movements come as EU trade ministers are meeting on Monday morning to discuss President Trump’s surprise announcement of 30% tariffs on the European Union. Trump shared the plans on Saturday and said that the same rate, set to kick in on 1 August, would be applied to goods from Mexico.

European officials have been working to secure a deal with the US after the president threatened a 50% tariff on EU exports in May, up from an initially proposed 20% rate. President Trump then retracted the threat of a 50% duty, although retained separate tariffs on exports like steel, aluminium, and cars.

In response to Trump’s announcement over the weekend, the president of the European Commission Ursula von der Leyen said the EU would not impose retaliatory tariffs on US imports before 1 August, allowing time for negotiation.

Denmark’s foreign minister, Lars Løkke Rasmussen, also told reporters ahead of the meeting on Monday: “We shouldn’t impose countermeasures at this stage, but we should prepare to be ready to use all the tools in the toolbox.” 

He added: “So we want a deal, but there’s an old saying: ‘If you want peace, you have to prepare for war.'”

Maroš Šefčovič, the EU’s trade representative in its talks with the US, also said on Monday that negotiations would continue. “I’m absolutely 100% sure that a negotiated solution is much better than the tension which we might have after 1 August.”

He told reporters in Brussels: “I cannot imagine walking away without genuine effort. Having said that, the current uncertainty caused by unjustified tariffs cannot persist indefinitely and therefore we must prepare for all outcomes, including, if necessary, well-considered proportionate countermeasures.”

In light of US isolationism, the EU is also looking to expand trade with alternative partners. Leaders from the bloc will travel to China for a summit later this month, seeking to promote stronger relations despite disagreements over the alleged “dumping” of cheap Chinese goods in Europe. This accusation prompted the EU to impose its own tariffs on Chinese goods last year.

While in China for the summit, EU leaders will also be courting other Pacific nations like South Korea, Japan, Vietnam, Singapore, the Philippines, and Indonesia, whose prime minister visited Brussels over the weekend to sign a new economic partnership with the EU. 

The downbeat investor sentiment in Europe also comes despite pledges to increase defence spending. France’s president Emmanuel Macron on Sunday pledged to raise France’s military spending by €6.5 billion over the next two years. Macron said the 2026 defence budget would be raised by €3.5bn, and another €3bn in 2027.

Published on
10/07/2025 – 17:38 GMT+2

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The EU expects trade relations with the US to remain difficult, even once a principle agreement is reached to resolve the tariff dispute between the two transatlantic partners, according to EU diplomats.

“We are working non-stop to find an initial agreement with the US – to keep tariffs as low as possible, and to provide the stability that businesses need,” Commission President Ursula von der Leyen said on Thursday, adding: “But we are also not naïve. We know the relationship with the US may not return to what it once was.”

The EU is awaiting a decision from US President Donald Trump, who has an EU-US trade agreement on his desk with a view to resolve the tariff dispute that has been ongoing since mid-March, according to remarks by his trade secretary Howard Lutnick in the US media.

The US currently imposes 50% tariffs on EU steel and aluminium, 25% on cars and 10% on all EU imports.

But though a framework agreementnow appears within reach, that will only constitute a first step toward a more comprehensive trade deal, and what comes next is causing concern among Europeans.

Having long advocated a zero-rated tariff offer on all industrial goods from both sides of the Atlantic, the Commission has now settled on a baseline tariff rate of 10% on EU goods arriving in the US. Exemptions may apply to aircraft and spirits, but progress on negotiations on other strategic sectors—such as cars, aluminium, steel, and pharmaceuticals—remains faltering.

The EU diplomat said that member states will not be satisfied with the agreement in principle said now to be in reach.

“Most people expect a deal, but if there’s a deal that doesn’t bring us to a better place from a European perspective than where we were before, we’ll have increased tariffs, it will affect negatively trade between the EU and the US,” he said.

Another EU diplomat predicted difficult negotiations among the 27 EU countries. Once the agreement in principle is approved, each country will take out its calculator to assess how its economy is affected, and what will need to be negotiated in a more comprehensive agreement to limit the negative impact on its trade.

In the short term, tensions could be high over whether the EU should implement the €21 billion retaliation list targeting US products, which has been suspended until July 14. Some countries, like Germany and Italy—highly exposed to trade with the US—favour a flexible, non-escalatory approach. Others, like France, want to show strength.

A second retaliation list is also reportedly ready. According to diplomats, the amount proposed by the Commission—€95 billion worth of US products—has been reduced. However, the Commission said that its implementation has not yet been determined.

Published on
09/07/2025 – 10:23 GMT+2

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US copper prices spiked after US President Donald Trump said he planned to place a 50% tariff on imports of the metal on Tuesday.

Copper futures traded in New York jumped around 13% to $5.69 a pound, a record closing-price, dramatically outpacing gains on copper futures traded in London.

As of around 3.30am EDT on Wednesday, the New York price had dropped to around $5.59, although it remained at a much higher level than before Trump’s announcement.

The president commented on the tariff during a televised cabinet meeting, without giving great detail, and Commerce Secretary Howard Lutnick said the administration would formalise the decision in the coming days. Lutnick suggested that the duty would come into effect around the end of this month, or in early August.

The development also comes as Trump is nearing his 1 August deadline, before which he has vowed to slap “so-called” reciprocal duties on countries running a trade surplus with the US.

The president has been sending out letters to trading partners, notifying them of tariff rates, and he said that seven more country-specific rates would be announced on Wednesday. So far, the US has reached trade agreements with the UK, China, and Vietnam.

Copper is used in a wide variety of products, meaning the tariff will affect electronics, construction, and industrial machinery, likely to push up inflation across the board.

This comes as Trump is putting pressure on Federal Reserve Chair Jerome Powell to cut interest rates. Powell said last week that the Fed would have eased monetary policy by now if not for the new US tariffs, which are sowing uncertainty and risking economic stability.

According to the US Geological Survey, the US imported about 810,000 metric tons of refined copper last year, about half of what it consumed. Chile is the most significant exporter to the US, followed by Canada.

A 50% tariff on the metal would bring the rate in line with the duties already placed on aluminium and steel, which became effective in June.

Although the exact rate was undisclosed, the copper duty itself was not unexpected, as Trump in February ordered a Section 232 investigation into imports of the metal. The probe intends to determine whether Trump has the right to impose the tariffs on national-security grounds.

Trump also said on Tuesday that a 200% tariff on pharmaceuticals was coming “very soon”, but he added that he would give the industry at least a year to adjust.

Published on 08/07/2025 – 13:04 GMT+2•Updated
13:13

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The EU and the US are preparing for a trade deal involving the US imposing a baseline 10% tariff on EU goods, according to several sources briefed by EU Trade Commissioner Maroš Šefčovič.

A preliminary agreement is expected to be concluded by Wednesday, with legal implementation by 1 August — the new deadline set by US President Donald Trump before additional tariffs come into effect if no deal is signed, sources said.

“The US will not drop the baseline tariffs, because they’re a revenue source,” the Parliament’s trade committee head MEP Bernd Lange (Germany/S&D) told reporters on Tuesday.

He said that aircraft and spirits would be exempted from the baseline 10% tariffs. Whether wines are included remains unclear.

The US currently apply 25% tariffs on EU cars, 50% tariffs on steel and aluminium and 10% tariffs on all other EU imports.

Lange said negotiations are ongoing on attempts to remove tariffs on cars, with much at stake for the German automotive industry, which is highly exposed to trade with the US.

“There are already estimates that up to 50,000 jobs could be at risk,” Lange added.

Germany and Italy — the largest EU exporters of goods to the US along with Ireland — remain concerned by US proposals not to exempt key sectors such as cars, steel and aluminium or pharmaceuticals, according to an EU diplomat.

EU retaliatory measures remain on the table but have not yet been finalised by the Commission. The EU must still decide when to use them.

“There is no immediate plan to do anything with the list,” Commission spokesperson Olof Gill said on Monday.

A first list of measures covering €21 billion worth of US products has been suspended until 14 July.

A second list, reduced following lobbying by industries and EU member states from €95 billion to €72 billion worth of US products, according to the French news agency AFP, has yet to be submitted for final approval by EU member states. 

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The EU and the US are moving toward an agreement that would take the form of a headline “political understanding” to resolve their tariffs dispute before a July 9th deadline, rather than a comprehensive deal, according to several diplomats and an EU official.

“If there is to be an agreement, the most realistic outcome would likely be a general framework or a ‘principle agreement’ — something that, due to time constraints, would resemble the kind of understanding the US has reached with the UK or even with China,” a senior EU diplomat said, adding: “This would not be a detailed, comprehensive trade deal, but rather a political understanding laying the groundwork for more concrete arrangements.”

The potential agreement was discussed at a behind closed doors meeting in Brussels on Monday, with European Commission officials briefing EU ambassadors about the ongoing negotiations between the EU and the US. Ambassadors were also informed of a new US counterproposal which offered  “nothing very concrete”, one of the diplomats said.

The EU and the US are under pressure from the looming 9th of July deadline, after which US President Donald Trump has threatened to impose 50% tariffs on EU imports if negotiations fail.

Since mid-March, Washington has implemented a new policy that calls into question its trade relations with partners across the globe. The US currently imposes tariffs of 50% on EU steel and aluminium, 25% on cars, and 10% on all EU imports.

After weeks of fruitless discussions, negotiations between the Commission — which holds the mandate to negotiate on behalf of the 27 member states in trade matters — and the Trump administration began in mid-June, but their outcome remains in doubt.

The Commission initially proposed a zero-tariff agreement on industrial products and an offer to purchase strategic goods such as US liquefied natural gas. But it now appears to be coming to terms with a deal that would maintain a baseline 10% tariff on EU imports. Lower tariffs might then be negotiated for strategic sectors such as aircraft, for which transatlantic production lines are interdependent.

However, member states are divided over a potential deal with a baseline 10% tariff. Germany and Italy are reportedly in favour, while countries like Ireland and France remain more sceptical.

“If the US maintain 10% tariffs, there will have to be compensation on goods and products imported from the US,” French president Emmanuel Macron stated on 26 June after an EU summit, adding: “The levy must be the same — 10% for 10%, or the equivalent of 10%.”

A second EU diplomat told Euronews that the agreement could be deliberately short in order for the two parties to reach further and more detailed agreements in different sectors.

“It is not excluded that some sectors could be addressed while others are not,” an EU official said.

Commission officials also asked ambassadors to consider several scenarios, including the possibility of an “asymmetrical agreement” in which the EU would make more concessions than the US, the prospect of no deal, and the option of the EU triggering retaliatory measures.

During the same meeting with the member states, the Commission indicated that a second list of countermeasures proposed on 8 May was still under development, according to a third EU diplomat. This list was subject to feedback from industry over several weeks and member states will still need to formally adopt it.

The proposed list targets €95 billions’ worth of US products. It would come on top of a first list or retaliation which covers  €21 billions’ worth of US products and was suspended until the 14 July after Donald Trump announced a 90-Day truce in the trade dispute.

A team of Commission experts is in Washington this week to advance the negotiation.

The EU’s trade commissioner Maroš Šefčovič is set to travel there on Wednesday for a meeting on Thursday with his US counterparts, US secretary of commerce Howard William Lutnick  and US trade representative Jamieson Lee Greer.

On Monday, Šefčovič confirmed that the bloc had received “the first draft of the [US] proposals for the eventual agreement in principle.”

Published on 27/06/2025 – 1:22 GMT+2•Updated
1:44

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France and Germany exhibited diverging strategies in the trade dispute between the EU and the US ongoing since mid-March, following a Council summit in Brussels on Thursday. While Germany is eager to reach a swift agreement at all costs, France emphasised the important that bloc should not display weakness.

In a press conference after the summit, German Chancellor Friedrich Merz said the Council encouraged the Commission to use the remaining two weeks to come to a swift agreement. But he said that the Council had encouraged von der Leyen to pursue the EU’s own countermeasures if necessary. He said it was important to conclude something quickly and flagged the risks to the auto, chemicals and pharma sectors if 9 July arrives and the Trump tariffs take effect.

“My hope is that we can reach a swift conclusion,” French President Emmanuel Macron said after an EU summit on Thursday in Brussels, adding: “However, this willingness should not be mistaken for weakness. We want to conclude quickly because it serves our collective interest, supports the stability of international trade, and benefits our businesses—but not at any price.”

On Monday, German Chancellor Friedrich Merz criticized the Commission’s strategy as overly technical and called for accelerating the negotiations by focusing on strategic sectors such as automobiles, steel, and energy, chemicals and pharma.

The US currently imposes 50% tariffs on EU steel and aluminium, 25% on cars and a 10% baseline on all EU imports.

Negotiations between the US and the EU have gained momentum since President Donald Trump and Commission President Ursula von der Leyen met at the G7 summit in Canada on 16 June, as the critical 9 July deadline approaches, after which Trump has threatened to impose 50% tariffs on all EU imports.

On Thursday evening, EU Commission President Ursula von der Leyen announced to EU member states that she had received a US counter-proposal to the EU’s offer, though she did not disclose any details.

For several months, the EU has been offering the US a zero-for-zero tariff deal on all industrial products, along with commitments to purchase strategic goods such as liquid natural gas and soybeans.

However, few believe that securing 0% tariffs from the US is still a realistic possibility. “Since they decided to impose multiple tariffs on their trade partners across the globe, the US now has an appetite for the revenue that tariffs generate,” an EU official said, implying that the US rejected the EU offer.

The Commission is now reconsidering its approach to a future tariff-based deal, though the specific terms have yet to be determined. “The prevailing assumption is that a 10% tariff might be the benchmark,” an EU diplomat said.

“On some areas 10% is not so much, the EU imposes 10% on a lot of imports of cars, whether they are Chinese or Japanese,” another EU official told Euronews, adding that “for other products, such as aircraft, it’s much more complicated because the production line is very interdependent between the US and the EU. That’s why, you need a granular analysis.”

If the EU manages to reach an agreement by 9 July, it will not be a comprehensive agreement, two senior EU diplomats said.

“The most realistic outcome would likely be a general framework or a “principled agreement”, due to time constraints,” an EU diplomat commented.

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The euro breached the $1.17 mark on Thursday, reaching levels last seen in September 2021. This 13% year-to-date surge positions the common currency on course for its strongest annual performance since 2017 — and potentially even since 2003. The rally therefore brings the euro closer to the psychologically significant 1.20 threshold.

Since Donald Trump’s inauguration on 20 January 2025, the euro has appreciated roughly 15% against the dollar. But what are the reasons behind the euro’s recent success, and how much further can it rise?

Fiscal turn in Germany is a game changer

The explanation lies in an unusual convergence of fiscal stimulus in Europe, waning confidence in US monetary policy, and a build-up of speculative dollar short positions that are fuelling the euro’s ascent.

While the European Central Bank (ECB) has extended its rate-cutting cycle, the key shift underpinning the euro’s strength has come from fiscal policy — particularly in Germany.

In March, the Bundestag approved a constitutional amendment exempting military and infrastructure spending from the country’s strict “debt brake” law.

This legal reform paved the way for a €500 billion infrastructure fund, earmarked for green energy, digital transformation, and regional development through 2035 — all structured off-budget to bypass debt constraints.

Simultaneously, Berlin has pledged to increase defence spending to 3.5% of GDP, aligning with NATO’s Readiness 2030 goals and the broader €800 billion ReArm Europe initiative.

US turmoil weighs on dollar sentiment

Across the Atlantic, the US economy has shown signs of softening. First-quarter GDP contracted, driven partly by a front-loading of imports ahead of new tariffs which were set to take effect in April.

However, market attention has focused more sharply on the political pressure mounting against Federal Reserve Chair Jerome Powell.

Despite Powell reiterating this week that rate cuts are premature — citing solid growth and tariff-driven inflation uncertainties — investor confidence in Fed independence has been shaken.

According to BBVA analysts: “Jerome Powell is not leaning toward a rate cut as soon as July, although there is an internal debate at the Fed about the timing of the next rate cut, and it may well continue to grow.”

They added that the dollar’s weakness has deepened “amid reports that US President Donald Trump is considering selecting and announcing a replacement for Fed Chair Jerome Powell by September or October”. This is despite the fact that Powell’s term is set to end in May 2026.

Markets interpret this as a potential “shadow chairman” scenario, where someone behind the scenes could keep interest rates low, thereby putting negative pressure on the dollar.

Euro-dollar outlook: What analysts are watching

Francesco Pesole, analyst at ING, underscored the growing relevance of upcoming US employment data.

“News on the jobs market has significant impact potential now that inflation figures for May have failed to trigger a dovish response by Powell. The rationale could be that if something moves on the second part of the mandate (full employment), a few more FOMC members could join the dovish ranks despite inflation concerns.”

He noted that markets currently price a one-in-four chance of a rate cut on 30 July and 62 basis points of easing by the end of the year.

Meanwhile, investor positioning continues to steer euro-dollar movements.

Matthew Ryan, Head of Market Strategy at Ebury, said: “EUR/USD is almost entirely driven by rising dollar shorts, rather than a more positive outlook for the common bloc’s economy.” In other words, the euro is rising against the dollar because investors are betting against the greenback, rather than placing more faith in the euro.

Technical indicators also point to continued momentum. Luca Cigognini, analyst at Intesa Sanpaolo, commented: “The short-term structure of EUR/USD remains generally bullish. A break above 1.1717, now a resistance level, could push the euro toward 1.1750, raising the next target to 1.1800/1.1820.”

Beyond those levels, traders are eyeing resistance at 1.1910 — the highs of August 2021 — followed by the psychological barrier at 1.20.

Higher targets include 1.2350 (January 2021) and 1.2550 (February 2018), but much will depend on how economic indicators and political developments evolve in the second half of the year.

Published on
20/06/2025 – 8:00 GMT+2

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The German Aerospace Industries Association (BDLI) wants only completed products aircraft and helicopters to be targeted by the EU for retaliatory tariffs – leaving the market for the supply of parts unscathed – if trade negotiations between the EU and the US founder, the group has told Euronews. It’s position aligns it with the French sector’s stance.

“If the EU must respond, counter-tariffs should focus strictly on fully finished aerospace end products – such as complete aircraft and helicopters – and explicitly exclude spare parts or critical products,” BDLI said in an email to Euronews. “This is essential to avoid unintended harm to European and global production networks.”

US aircraft are included in the European Commission’s draft listof €95 billion worth of US products that could face duties if ongoing negotiations fail. The list was open for industry consultation until 10 June and now awaits approval by EU member states.

Trade tensions between the EU and the US risk reignitingthe long-standing rivalry between aerospace giants Boeing and Airbus. However, the two economies’ production systems are tightly intertwined. For instance, the LEAP engine, used in both Airbus and Boeing jets, is co-produced by US-based General Electric and France’s Safran.

Published on 18/06/2025 – 18:37 GMT+2•Updated
18:43

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The conflict in the Middle East will further worsen the global economic outlook, already strained by ongoing trade disputes, the managing director of the International Monetary Fund (FMI) has told Euronews in an interview.

“Being hit by a trade war has consequences. We have projected a decline in global growth by half a percentage point,” Kristalina Georgieva said, adding: “What we witness now is more turbulence in the Middle East, which adds to uncertainty and therefore is bad for business.”

Since Donald Trump’s return to power as leader of the world’s largest economy, international trade has been disrupted by a wave of tariffs imposed by the US administration on its global partners.

Mexico and Canada were the initial targets, followed by a prolonged standoff between the US and China, which saw reciprocal tariffs between the pair soar to more than 100%.

On 2 April— a day he dubbed “Liberation Day”—Trump imposed tariffs on a wide range of countries, including the EU. He then declared a 90-day truce, set to expire on 9 July.

Negotiations are currently underway with the EU, which currently faces tariffs of 50% on steel and aluminum, 25% on cars, and 10% on all its exports to the US.

However, the director of the IMF, which is responsible for financial stability across the world and facilitate global trade, admitted that “the global economy has proven to be remarkably resilient to shocks, and that resilience continues.”

In her view, economic uncertainty is becoming the new normal.

“We live in a more shock-prone world, a world of higher uncertainty,” Georgieva said, adding: “For this world, countries need to work hard to be more resilient. Do reforms at home that would make your economies stronger.”

Georgieva, a former vice-president of the European Commission, also expressed optimism with the economic outlook despite the bleak growth figures.

She considered that the recent trade agreement between China and the US and the deal Trump has brokered with the UK to be good signs, saying: “We are in a better place.”

In an uncertain context, she also sees opportunities to be seized—an outlook shared by the European Commission, which is pursuing a strategy of diversifying its trading partners by expanding the number of trade agreements worldwide.

“In Europe, we see an increase in bilateral and plurilateral agreements, which I expect to be a big feature of the future of trade globally,” she told Euronews, adding that it is a great moment for Europe, “a defender of rules-based” global trade exchanges.

Published on
12/06/2025 – 8:00 GMT+2

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The EU is wrangling over a provision of Donald Trump’s so-called “Big Beautiful Bill” for the US budget that could see European companies taxed higher than others in retaliation for certain taxes imposed on US enterprises overseas, the vice-chair of the European Parliament’s tax subcommittee has told Euronews.

The German European People’s Party MEP Markus Ferber said the European Commission has raised the proposed legislation—already approved by the House of Representatives—in ongoing tariff negotiations with the Trump administration.

“We are concerned because within this ‘One Big Beautiful Bill’ there are special taxes aimed at jurisdictions that impose taxes on the US,” Ferber told Euronews.

He added that jurisdictions like the EU, which have already implemented the OECD agreement establishing a global minimum tax of 15% on multinationals, are directly targeted.

“It could also affect member states that have introduced a digital services tax,” he noted.

The OECD agreement, approved by 140 countries – though as yet unratified by the US – introduced a global minimum tax of 15% on the profits of multinational companies, regardless of where those profits are declared, with effect from 1 January 2024. The EU has transposed the agreement into law and applies it to multinationals operating within the Union, to the ire of the Trump administration.

Meanwhile countries such as Denmark, Portugal and Poland have implemented digital services taxes targeting US tech giants, while others are in the process of creating one.

The US is now looking to retaliate against taxes it deems unfair through a provision of the “Big Beautiful Bill” which would hit foreign investors with a bump in US income tax by five percent points each year, potentially taking the rate up to 20%, in addition to existing taxes.

The Commission is concerned, officials said.

According to Ferber, the EU executive has put this provision of the US budget bill on the negotiating table. “But we are not sure yet that the US agreed to put it in the basket,” the MEP said.

For several weeks, the EU and the US have been discussing a resolution to the trade dispute that has been ongoing since mid-March.

The US impose 50% tariffs on EU steel and aluminium, 25% on cars and 10% on all EU imports.

For its part, the EU has prepared countermeasures targeting around €115 billion worth of US products. These measures are either suspended until July or still awaiting approval by EU member states.