EU follows Starmer by giving in to Trump
Keir Starmer's
Trump strategy. It's almost too excruciating to watch.
When, at last Monday's meeting in Scotland, the US president insulted a key ally and friend of the UK prime minister's (London mayor
Sadiq Khan
), referring to him as a 'nasty person', Starmer could only laugh it off, saying 'he's a friend of mine'.
And since when has a UK leader ever been forced into the role of guest (the event took place at
Donald Trump's
Turnberry golf resort) when meeting a foreign leader on home soil?
A human rights lawyer by trade, Starmer has largely refrained from calling out
Israel
for its murderous assault on civilians in
Gaza
for fear of deviating too much from US foreign policy.
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He is even said to have run his Palestinian state recognition plan by Trump before announcing it.
In contrast to his domestic policy agenda, which is littered with U-turns, Starmer has been nothing if not consistent when it comes to the US, offering Washington almost complete obedience.
Back in May when the UK agreed a very lopsided trade deal with the US, which applied a 10 per cent
tariff
on UK exports, there was a perception that the EU, with an eye on China's hardball stance, would drive a harder bargain.
The bloc, after all, plays gatekeeper to the biggest and richest consumer market in the world.
But after months of talking tough, threatening counter measures and anti-coercion instruments, the EU has effectively copied Starmer's template, capitulating almost entirely to Trump's wrecking-ball agenda.
Since when has a UK leader ever been forced into the role of guest when meeting a foreign leader on home soil? Photograph: Tierney L. Cross/ The New York Times
Even Canada and Mexico, which have potentially more to lose (more of their national income is tied into trade with the US), have pushed back harder against Trump.
The
preliminary EU-US agreement allows for a 15 per cent across-the-board tariff rate on EU exports
, a far cry from the zero-for-zero deal initially offered by
European Commission president Ursula von der Leyen
, while committing the EU to big purchases of US energy and armaments.
For its part, the EU has reduced tariffs on most US imports, in some cases to zero, while giving US exporters unprecedented access to Europe's 450 million-strong consumer market.
Justifying the terms of the deal, von der Leyen even adopted one of the central Maga talking points, namely that the EU's transatlantic trade with the US needed to be 'rebalanced', a reference to the EU's big trade surplus (in goods) with the US.
Previously EU leaders argued that the trading relationship with the US was not out of balance as the bloc buys far more services from US than it sells to them, making up for the lopsided nature of the goods trade.
The EU's Common Commercial Policy (CCP), whereby member states delegate authority to the Commission to broker trade deals on their behalf, is seen by many as the jewel in the EU's crown.
Farmers here may rail against the EU's environmental policies but Irish food and drink exports, now valued at a record €17 billion per annum, are in dozens of markets across the world largely because of the EU's CCP.
The bloc's negotiators are known to drive hard in trade talks. They took 10 years to reach a trade deal with Canada. They jumped out of negotiations with Australia in 2023 when Canberra upped its demand for access to the EU's beef, lamb and dairy markets.
This time the bloc rolled over.
Despite the spin coming from Brussels about the deal providing stability and trade certainty, 'Trump bludgeoned the EU on trade,' as one CNN headline put it.
Most of the analysis suggests the EU was over a barrel because of disagreement between member states (the herding 27 cats narrative); the US's transatlantic security guarantee; and the need to maintain US support for Ukraine. But the deal came with little or no security guarantees and no additional pledges around Ukraine.
While tariffs in the short term will improve the US's trade balance, they will come at the expense of higher prices domestically. Photograph: Christopher Furlong/ Getty Images)
Trump, despite the tough guy rhetoric, has largely played a passive role when it comes to Ukraine and Gaza, allowing belligerent leaders in Russia and Israel free rein.
There is also a worry that Trump, handed such an easy victory, will come back for more or at least find pretexts to extract more concessions.
From Ireland's perspective, the
15 per cent tariff on pharma
, the main element of the State's export trade with the US, represents damage but controlled damage in the context of a global retreat from free trade.
The Irish pharma industry here makes big profits and can – according to insiders – absorb the 15 per cent hit without uprooting itself. Multinational investment plans work to 10-year cycles and are hardly likely to switch tack on the basis of six months of Trump-induced volatility.
The nightmare scenario for Ireland would be for a
Pfizer
to transfer all or part of its operations here back to the US in response to US protectionism.
The calculus in Brussels might be to let Trump play out his tariff plan which most economists believe will blow up in his face.
While tariffs in the short term will improve the US's trade balance, they will come at the expense of higher prices domestically, something that could destabilise the US economy and pave the way from another bruising encounter with bond markets.
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Irish Examiner
an hour ago
- Irish Examiner
Trump's global tariff agenda puts Ireland's pharmaceutical industry at serious risk
The whole world is in thrall to the whims of Donald Trump's tariff agenda, as it has been since the 47th president of the United States' swearing-in last January. We've learned a few uncomfortable truths along the way. Much of the early outcry from America's allies and trading partners surrounded the lack of economic logic to the imposition of tariffs – which are effectively a tax for Americans on foreign products, in theory making them less attractive to US consumers and heightening the allure of their own domestic suppliers. Critics said that the new regime would disrupt the world economy needlessly and perhaps bring about a global recession. That may well come to pass. The problem is that in this stand-off America has the greater wherewithal in terms of raw economic power. It holds the cards as Trump himself might say. And nations worldwide are beginning to fall into line, the EU just the latest after agreeing to a blanket 15% tariff on goods and services going forward. After President of the European Commission Ursula von der Leyen and US President Donald Trump agreed the trade deal, the spin is that the pain of those tariffs is worth it in order to avoid a global trade war. Also, 15% is better than 30% or worse, is the thinking. Photo:The spin is that the pain of those tariffs is worth it in order to avoid a global trade war. Also, 15% is better than 30% or worse, is the thinking. Whether that represents capitulation in the face of bullyboy tactics, given that little or nothing has been asked of the US in return, is a separate conversation. Ireland's pharmaceutical industry Here in Ireland we have a bigger problem though, and that problem is the pharmaceutical industry. That industry contributes massively to the economy here via billions of euro in corporation tax contributions, with about 90 companies employing 50,000 people in highly-paid roles. A total 30,000 of those jobs are with American firms. Should foreign pharmaceutical concerns exit Ireland the impact on the country would be catastrophic. The industry globally had pleaded with Trump for it to be exempted from any tariff regime, ostensibly for altruistic reasons – that lifesaving medicines shouldn't be subject to capricious taxation. At an EU level, the industry asked that the bloc not apply reciprocal tariffs, one wish that has at least been granted. Pfizer is one of the massive American pharmaceutical companies holding bases in Ireland, in this case Cork. File picture: Dan Linehan Oddly enough, in Trump's world of permanent grievance where everyone has been making a sucker of the United States for decades, the outsize presence the US pharmaceutical industry holds in Ireland is one situation on which he indisputably has a legitimate point. Drug prices in the US can retail for as much as five times what an EU citizen would pay. Meanwhile, American pharma firms make a pretty penny avoiding American tax by basing themselves here. Trump's protectionist agenda demands that those jobs and companies should return home. The Government has been worrying about and planning for a worst-case scenario in terms of tariffs on pharmaceuticals for months. Reaction from the pharma companies But what of the pharma industry itself? The official line from the Irish Pharmaceutical Healthcare Association (IPHA), the industry's lobby group here, is that it is reviewing the announcements coming out of Washington as and when they happen 'as key implications for the pharmaceutical sector remain uncertain'. A stance it's hard to argue with given the whole world has grown used to the haphazard nature of the Trump administration's demands. The European Federation of Pharmaceutical Industries and Associations (EFPIA) notes that tariffs are 'a blunt instrument that will disrupt supply chains, impact on investment in research and development, and ultimately harm patient access to medicines on both sides of the Atlantic'. It added that if the goal is to rebalance trade and ensure a 'fairer distribution' of how pharmaceutical innovation is financed, then 'there are more effective means than tariffs that would help'. Impact on pharma in Ireland The IDA, the body with prime responsibility for attracting foreign investment to Irish shores, says of the pharma implications that it 'welcomes' the deal made between Europe and the US, arguing it provides 'much-needed certainty for Irish, European and American businesses who together represent the most integrated trading relationship in the world'. 'We are very much reliant (on the US market), there's no arguing with that,' says one industry insider. Last year a massive €44bn in pharmaceutical products were exported directly from Ireland to the US. 'But when you stand back €100bn was exported globally. So half went to America, but it's not like all business went there, though it is certainly the biggest partner,' says the source. That doesn't mean that those massive American companies holding bases here – MSD, Pfizer, ELI Lilly, Johnson and Johnson etc – are about to up sticks on the back of the new tariff regime. 'They are not going to leave today or tomorrow, no. But it could definitely impact future investment decisions,' the source says. One of the problems is that a great deal of uncertainty still surrounds the 15% tariff agreement, particularly with regard to pharma. One of the Eli Lilly production buildings at its state-of-the-art facility in Dunderrow, Kinsale, Co Cork. For starters, most people concerned thought that the pharmaceutical industry wasn't to be included in the deal. Then about two hours after the deal was agreed European Commission president Ursula von der Leyen said it would be included, a point Trump appeared to back up. The following day the White House produced a 'fact sheet' describing how the new regime would work, and affirming the 15% rate for pharma. Except that the same sheet stated that the European Union would pay the tariff – which isn't how tariffs work. Then there is the Section 232 investigation which the US Department of Commerce initiated into the pharma industry in April – aiming to establish if how the pharmaceutical system worldwide currently functions impacts negatively on the US from a national security standpoint. Should the answer arrived at be a 'yes', then additional tariffs on pharma may well follow (such investigations typically take a minimum of six months to conclude, so we'll probably get an answer sometime towards the end of the year). 'Pharma plans in the long-term,' says Aidan Meagher, tax partner specialising in life sciences with consultants EY, noting that most pharma manufacturers will have been planning for this scenario for months and will have frontloaded stock into the American market, thus negating immediate impacts in the near term. He says that companies will be likely looking at 'dual sourcing' initiatives, supplying the American market from within the US itself and using Irish operations for its trade around the rest of the globe. 'Ireland needs to up its game' But Meagher says that it would be 'remiss' of Ireland, and the pharma industry here, to take a 'wait and see' approach, perhaps with the supposition that Trump's policies will last for the remaining three-and-a-half years of his term, and no longer. 'It is all about the next investment. A lot of these drugs only have patent protection for a certain life or longevity. Ireland needs to maintain investment and to incentivise the right kind of activity in terms of attracting that innovation,' he says. That means thinking outside the box in terms of tax credits for research and development, and improvements to infrastructure, particularly housing, Meagher says, areas in which we are notably lagging behind in terms of international competition. But he argues that the situation is far from a doomsday scenario. 'It's not as simple as that, it's a whole range of business factors that need to be considered – it's all about impacts for specific companies,' he says. 'It's not all necessarily doom and gloom. Companies have had plenty of time to consider this. And pharma companies are long-term thinkers. Ireland has had just two issues with the FDA (the US food and drug administration, responsible for approving new drugs) in its history. "The country has a strong reputation. These countries have invested significantly and Ireland is the owner of a lot of valuable intellectual property.' But it's certainly not a time to be complacent, Meagher argues. 'We have dropped down the competitiveness radar, and our competitors now aren't in the EU – they're in Switzerland, Singapore and the US itself. We need to be a top competitor for inward investment, and R&D and infrastructure will be critical. That is where Ireland needs to up its game.'
Irish Times
2 hours ago
- Irish Times
Data credibility fears fuelled after Trump orders firing of labour official
Sharp downward revisions to jobs data on Friday, followed by Donald Trump 's sudden order to fire the head of the Bureau of Labor Statistics , stoked investor fears about the integrity of economic data and the Fed's ability to read the true state of the US economy. News of a surprise weakening in the US labour market last month jolted investors, while revisions to job figures for the past two months raised worries the US central bank may have been flying blind in recent months and may need to play catch-up with interest rate cuts, investors said. Fed governor Adriana Kugler's early resignation from her term on Friday also potentially shakes up what was already a fractious succession process for Fed leadership amid difficult relations with Mr Trump. The US president on Friday renewed his call for Federal Reserve chair Jerome Powell to resign. 'Powell should resign, just like Adriana Kugler, a Biden Appointee, resigned,' Mr Trump said in a post on Truth Social. READ MORE 'Kugler's resignation allows the president to further shape the FOMC [Federal Open Market Committee] in his own image,' said Jamie Cox, managing partner at Harris Financial Group. Nonfarm payrolls increased by 73,000 jobs in July after rising by a downwardly revised 14,000 in June, the Labor Department's Bureau of Labor Statistics said in its employment report on Friday. Economists polled by Reuters had forecast payrolls increasing by 110,000 jobs after rising by a previously reported 147,000 in June. The report comes two days after the US central bank left unchanged its benchmark interest rate and avoided signalling imminent rate cuts, dialling back market expectations for an easing at the next policy meeting in September. That changed dramatically on Friday, with odds for a 25 basis point cut in September jumping to about 81 per cent after the data from 38 per cent on Thursday, according to CME Group data. 'The Fed's job is becoming increasingly difficult based on the deterioration of the economic data,' said Matthew Miskin, co-chief investment strategist at Manulife John Hancock Investments. 'These revisions are massive and really are a game changer to the Fed's reaction function, and so I think this Fed meeting is one that they'd like to revise.' Mr Trump on Friday said, without evidence, that numbers contained in the July jobs report from the Bureau of Labor Statistics were rigged. 'In my opinion, today's Jobs Numbers were RIGGED in order to make the Republicans, and ME, look bad,' Trump said in a Truth Social post. He ordered that the commissioner of the Labor Department's Bureau of Labor Statistics Erika McEntarfer be fired after the data release. 'It's definitely a case of shooting the messenger,' said Dean Smith, chief strategist at FolioBeyond. 'Firing the head of BLS is not going to improve data collection and dissemination ... it's going to undermine confidence in the data going forward,' he said. Revisions for May and June came in well above the norm, the Bureau of Labor Statistics said. It gave no reason for the revised data but noted that 'monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.' May's nonfarm payroll gain was slashed by 125,000, from 144,000 to just 19,000, while June's downward revision was by 133,000. In total, employment over the two months is now 258,000 lower than initially reported. 'It is painfully obvious that the US government has an improper model for payroll calculations,' said Michael Green, portfolio manager at Simplify Asset Management. 'If you don't have reliable data, you make bad policy.' Spencer Hakimian, founder of macro hedge fund Tolou Capital Management, said lay-offs across several government departments, part of Mr Trump's plans to reduce wasteful government spending, have prompted him to rely more heavily on alternative measures of economic strength than just government data, such as credit card data, and data from Truflation, an independent inflation index alternative to official government inflation measures. Mr Powell said in a press conference on Wednesday the labour market remained strong, and that the central bank was still in the early stages of grasping how Mr Trump's overhaul of import taxes and other policy shifts would play out for inflation, employment and economic growth. 'Had those figures been the initial prints a month or two ago it would have significantly changed the labour market narrative over the entire summer,' said Adam Hetts, global head of multi-asset and portfolio manager at Janus Henderson Investors, in a note. Treasury yields, which move inversely to bond prices, dropped on Friday, with benchmark 10-year yields down by a whopping 15 basis points to 4.22 per cent – their biggest daily drop since April. Two-year yields were down by about 25 basis points to 3.69 per cent, registering their biggest daily decline since August last year. Stocks declined too, also weighed on by Mr Trump's latest tariffs salvo. The benchmark S&P 500 index lost 1.6 per cent, bringing stocks to their lowest since early July. The deterioration in the labour picture comes amid steep US tariffs on large trade partners that – while not as high as feared earlier this year – are still largely expected to worsen inflation and slow economic activity. (c) Copyright Thomson Reuters 2025
The Journal
3 hours ago
- The Journal
Mapped: The growing global support for Palestinian statehood
MOMENTUM IS BUILDING behind Palestinian statehood, as a growing number of Western powers signal their intent to formally recognise it. France, the United Kingdom and Canada have all announced plans to recognise a Palestinian state, a major policy shift for the key US allies, joining more than 140 countries that already do. Their decisions come amid worsening famine conditions in Gaza, as starvation is rampant across the territory. While recognition of Palestine is not new among nations in Africa, Asia, and Latin America, these latest developments mark a significant shift within the West, particularly among G7 and NATO countries that have historically aligned with Israel. Growing recognition mapped Recognition by these major Western powers would mark the first such move by any member of the G7, and would increase pressure on others, including Germany, Italy and the United States, to reconsider their stance. France plans to formalise recognition in September. The UK has said it will proceed unless Israel agrees to a ceasefire. Canada has tied its decision to democratic reforms by the Palestinian Authority, including elections in the West Bank that exclude Hamas. Israel and the United States have strongly opposed the announcements, arguing they 'reward Hamas' and undermine ceasefire efforts. US President Donald Trump warned Canada that its decision could threaten a future trade deal. Palestinian statehood has long been recognised by much of the Global South, as well as by key G20 members including China, India, Brazil and South Africa. In Europe, support has grown steadily over the past year. Ireland, Spain and Norway formally recognised Palestine in May 2024 in a joint move, and Slovenia, Malta and others are signalling similar intentions. Ireland is among 15 nations that have called for the world to recognise a Palestinian state and reiterated commitment for a two-state solution at the High-level International Conference which took place in New York this week. The joint foreign ministers statement expressed the call for a ceasefire, concern over the high number of civilian casualties and humanitarian situation in Gaza, and calls on countries across the world to recognise the state of Palestine. France's minister for foreign affairs, Jean-Noel Barrot, posted the letter to his X account alongside the message: 'In New York, along with 14 other countries, France is launching a collective appeal: we express our desire to recognise the State of Palestine and invite those who have not yet done so to join us.' Advertisement The statement is backed by Ireland, Andorra, Australia, Canada, Finland, France, Iceland, Luxembourg, Malta, New Zealand, Norway, Portugal, San Marino, Slovenia, and Spain. Palestine state recognition Palestine currently holds non-member observer status at the United Nations. In 2024, a US veto at the Security Council blocked an attempt to grant full UN membership, despite 12 countries voting in favour. Proponents of recognition argue that statehood is essential for advancing a credible two-state solution. As one senior Egyptian official told the New York Times, 'The Israelis used to claim they had no partner for peace. The problem now is that there is no partner for peace in Israel.' What does recognition mean? Palestine exists, and does not. It has embassies, Olympic teams, and wide international support, but lacks the basic features of a fully functioning state: borders, sovereignty and control of its territory. The Palestinian Authority has limited authority in parts of the West Bank under Israeli occupation. In Gaza, also considered occupied, Israel is waging devastating attacks. Palestinians continue to demand East Jerusalem as their capital, while Israel maintains control across the region. In practical terms, recognising a Palestinian state changes little on the ground. But symbolically, it matters. After decades of stalled diplomacy, expanding Israeli settlements and cycles of violence, many now see recognition as a long-overdue statement, not a solution in itself, but a step towards one. If the UK and France recognise a Palestinian state, it also means that four out of the five permanent members of the UN Security Council (France, the UK, Russia and China) will speak with a single voice on the issue. This would effectively isolate the US and their support for Israel, in theory. Lastly, there could be implications for the International Criminal Court (ICC), which issued warrants for the arrest of Netanyahu and former Israeli Defense Minister Yoav Gallant in November for 'crimes against humanity and war crimes' in Gaza. Netanyahu has called the charges 'outrageous' and the international court an 'enemy of humanity.' Experts say the recognition of Palestine could have legal consequences in the context of the ICC jurisdiction. However, France has said it would not arrest Netanyahu and Gallant because it would be incompatible with international legal obligations concerning immunities granted to states not party to the ICC, such as Israel. Readers like you are keeping these stories free for everyone... A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation. Learn More Support The Journal
