EU delays retaliatory trade tariffs against US
It comes after Trump wrote a letter to von der Leyen announcing his plans to impose 30% tariffs on EU imports from 1 August.He warned that if the trade partner retaliated with import duties of their own against the US, he would hit back by raising tariffs above 30%.In a pre-recorded interview with Fox News which aired on Saturday night, Trump said some countries were "very upset now" but he insisted the tariffs meant "hundreds of billions of dollars" were "pouring in".Von der Leyen told journalists on Sunday: "The United States has sent us a letter with measures that would come into effect unless there is a negotiated solution, so we will therefore also extend the suspension of our countermeasures until early August."At the same time, we will continue to prepare for the countermeasures so we're fully prepared."The European Commission president insisted that the EU has "always been very clear that we prefer a negotiated solution". "This remains the case, and we will use the time that we have now till August 1," she added. As of Saturday, the Trump administration has now proposed tariff conditions on 24 countries and the EU, which is composed of 27 countries.On 12 April, White House trade adviser Peter Navarro set a goal to secure "90 deals in 90 days".So far, the president has announced the outlines of two such pacts with the United Kingdom and Vietnam as negotiations with others continue.
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Reuters
30 minutes ago
- Reuters
Ericsson Q2 profit beats expectations, but US tariffs crimped margin growth
STOCKHOLM, July 15 (Reuters) - Swedish telecom equipment maker Ericsson ( opens new tab reported on Tuesday a swing to a bigger second-quarter adjusted profit than expected, helped by sales growth in North America and cost cuts, but said U.S. tariffs dampened a rise in its profit margin. Ericsson's shares fell 3% in early trading after the result. Operating profit excluding restructuring charges was 7.0 billion crowns ($728.5 million) against a year-earlier loss of 11.9 billion and a mean forecast of 6.1 billion in an LSEG poll of analysts. "We have structurally lowered our cost base and are strongly focused on delivering further efficiencies," CEO Borje Ekholm said in a statement. U.S. tariffs hampered growth in its profit margins, the company said. President Donald Trump on Saturday threatened to impose a 30% tariff on imports from the European Union starting on August 1. "With production in many parts of the world, including in North America, we will try to balance production, given the development with tariffs," Sandström said. "But of course, we cannot guarantee that we are immune to tariffs." Ericsson missed sales growth estimates, with quarterly group sales, which included a currency headwind of 4.7 billion crowns, falling 6% to 56.1 billion crowns against a mean forecast of 59.3 billion in the poll. Organic sales, however, grew 2%. The company said sales growth was strongest in its largest market, North America, offsetting slowdowns in markets such as India. Business in the U.S. continues to benefit from a solid pace of investments by mobile operators, CFO Lars Sandström told Reuters. He added that he expects the Indian market to pick up soon. Growth in the U.S. has helped Ericsson's profit margin, which stood at 47.5%, a jump from 43.1% in the year-earlier period when sales were higher in low-margin markets such as India.
Reuters
37 minutes ago
- Reuters
For Europe, 30% US tariff would hammer trade, force export model rethink
BRUSSELS, July 15 (Reuters) - The 30% tariff on European goods threatened by U.S. President Donald Trump would, if implemented, be a game-changer for Europe, wiping out whole chunks of transatlantic commerce and forcing a rethink of its export-led economic model. European ministers meeting in Brussels on Monday remained convinced they can bring Trump back from the brink before his Aug. 1 deadline and reach a deal that would keep the $1.7 trillion two-way trading relationship broadly intact. But the wild swings in Trump's mood towards the European Union - which he has sometimes labelled as friendly and at other times accused of being set up specifically to destroy the United States - keep the 30% threat very much alive for now. "It will be almost impossible to continue the trading as we are used to in a transatlantic relationship," EU trade chief Maros Sefcovic said of the 30% rate before meeting ministers and officials of the 27 EU capitals to give them an update. "Practically it prohibits the trade." EU officials had been hoping they could limit the damage by agreeing a baseline tariff around 10% - the one currently in place - with additional carve-outs for key sectors like autos. Last year the United States accounted for a fifth of all EU exports - its largest partner. Trump's bugbear is the $235 billion U.S. deficit generated by the goods component of that trade, even though the U.S. earns a surplus on services. The impact of making European exports - from pharmaceuticals to autos, machinery or wine - too expensive to be viable for American consumers would be instantly tangible. Economists at Barclays estimate an average tariff rate on EU goods of 35% including both reciprocal and sectoral duties combined with a 10% retaliation from Brussels would shave 0.7 percentage points off euro zone output. This would eat up most of the euro zone's already meagre growth and likely lead the European Central Bank to cut its 2% deposit rate further. "Inflation would likely undershoot the 2% target more deeply, and for longer, prompting a more accommodative monetary policy stance – with the deposit rate potentially reaching 1% by (March 2026)," the Barclays economists said. An earlier estimate by German economic institute IW found tariffs of 20% to 50% would cost Germany's 4.3 trillion euro economy more than 200 billion euros between now and 2028. While arguably small in percentage terms, that lost activity could still upend Chancellor Friedrich Merz's plans to push through tax cuts and spend more on renewing the country's long neglected infrastructure. "We would have to postpone large parts of our economic policy efforts because it would interfere with everything and hit the German export industry to the core," Merz said at the weekend of a 30% rate. Further down the line, it raises bigger questions over how Europe recoups the lost activity to generate the tax revenues and jobs needed to fund ambitions ranging from caring for ageing populations to military rearmament. Under its existing policy of trade diversification, the EU has done well in striking preliminary deals with new partners but - as the continued delay over completion of the giant EU-Mercosur trade pact shows - it has struggled to get them fully signed and sealed. "The EU does not have different markets to pull up to and sell into," Varg Folkman, policy analyst at the European Policy Centre think tank said of the long and complex timelines involved in classic free trade deals. Some observers have argued the stand-off with Trump is what the EU needs to complete long-delayed reforms of its single market, boosting domestic demand and rebalancing its economy away from the exports which account for around half of output. The International Monetary Fund has estimated the EU's own internal barriers to the free flow of activity are the equivalent of tariffs of 44% for goods and 110% for services. Mooted reforms such as creating freer cross-border capital markets have made little headway in more than a decade. "It is easier said than done. There isn't an agreement to deepen. The barriers are imposed by the EU members themselves to benefit their own," Folkman said of the web of national regulations. How all this plays into the EU's negotiating strategy in the less than three weeks ahead remains to be seen - but for now, the bloc has stuck to its line of being open to talks while readying retaliatory measures if they break down. One thing that might persuade Trump to reach a deal, some European observers suggest, is that the lingering uncertainty may by itself push back the timing of the Federal Reserve interest rate cut the U.S. president so desires. "The latest developments on the trade war suggest that it will take more time to get a sense of the 'landing zone' on of course raises uncertainty for everyone, including the Fed," AXA chief economist Gilles Moec said. "With this new for cutting quickly get even harder to justify."
The Guardian
40 minutes ago
- The Guardian
Trump shrugs off Farage's call for parliament to be recalled so he can address MPs during state visit
Update: Date: 2025-07-15T07:36:04.000Z Title: Donald Trump Content: Good morning. has given an interview to the BBC's chief North America correspondent, Gary O'Donoghue, and, while the most important lines are about Russia, it contains some interesting snippets about the UK. Trump is making an unprecedented second state visit in September and yesterday a mini Westminster row broke out about the timing of the trip (starting just after the Commons starts its conference season recess), and the fact this means Trump isn't being invited to give a speech to MPs and peers. No 10 implied yesterday that this was just a scheduling coincidence – and nothing to do with the fact that some parliamentarians are bitterly opposed to hosting Trump, who is widely reviled as a threat to American democracy. Yesterday Nigel Farage, the Reform UK leader, said (to GB News, of course) that parliament should be recalled so that Trump could get the chance to speak in the Royal Gallery or Westminster Hall (the venues normally used for these events). But, when O'Donoghue asked Trump about this, he discovered that the US president doesn't agree with Farage, and isn't bothered about the prospect of not getting the President Macron treatment. Asked if he would like parliament to be recalled so he could make a speech there, Trump replied: I think let them go and have a good time [ie, let MPs have their recess]. I don't want that to … Asked what he wanted to achieve from the state visit, Trump said: I think just we I want to have a good time and respect to King Charles because he's a great gentleman. We have not heard Farage's reaction yet. His X feed still has this video near the top, featuring the Reform UK leader calling for the recall of parliament. Parliament must be recalled for 's state visit to the does @Keir_Starmer think Macron is a better friend of Britain than Trump? Trump's response suggests Farage might be less in touch with the views of the president, and the Maga movement, than he sometimes claims. And, given Trump's unpopularity in the UK generally, it is probably not wise for Farage to appear even more sensitive to any slights to Trump's dignity than the man himself. I will post more from the interview soon. Here is the agenda for the day. 9.30am: Keir Starmer chairs cabinet. 9.30am: Rachel Reeves, chancellor, announces a package of reforms to financial services in Leeds. 9.30am: James Cleverly, the former Tory home secretary, gives a speech to the IPPR thinktank. 9.30am: The Department for Work and Pensions publishes universal credit claim figures, including for the first time details of foreign nationals getting UC. 10am: Sir Adrian Montague, chair of Thames Water, and Chris Weston, its chief executive, give evidence to the Commons environment committee. 10.15am: Richard Hughes, chair of the Office for Budget Responsibility, and colleagues give evidence to the Commons Treasury committee about the OBR's fiscal risks report. Noon: Downing Street holds a lobby briefing. After 12.30pm: MPs start debates on two Tory opposition day motions. The first one calls for the two-child benefit cap to stay, and the second one calls on the government to commit to uprating tax thresholds in line with inflation and to rule out new taxes on savings, homes and pensions. Also today, the Department for Education is publishing new guidance on sex education. If you want to contact me, please post a message below the line when comments are open (normally between 10am and 3pm at the moment), or message me on social media. I can't read all the messages BTL, but if you put 'Andrew' in a message aimed at me, I am more likely to see it because I search for posts containing that word. If you want to flag something up urgently, it is best to use social media. You can reach me on Bluesky at @ The Guardian has given up posting from its official accounts on X, but individual Guardian journalists are there, I still have my account, and if you message me there at @AndrewSparrow, I will see it and respond if necessary. I find it very helpful when readers point out mistakes, even minor typos. No error is too small to correct. And I find your questions very interesting too. I can't promise to reply to them all, but I will try to reply to as many as I can, either BTL or sometimes in the blog.
