Stock markets fall as trade relief fades, eyes on data and earnings
The pact, which followed a similar one with Japan last week, still left many worried about the economic consequences, with auto companies particularly worried.
"The 15 percent blanket levy on EU and Japanese imports may have helped markets sidestep a cliff, but it's no free pass," said Stephen Innes at SPI Asset Management.
"With the average effective US tariff rate now sitting at 18.2 percent... the barrier to global trade remains significant. The higher tail risk didn't detonate, but its potential impact on the global economy hasn't disappeared either."
And National Australia Bank's Ray Attrill added: "It hasn't taken long for markets to conclude that this relatively good news is still, in absolute terms, bad news as far as the near term (through 2025) implications for eurozone growth are concerned."
Traders are also keeping an eye on US talks with other major economies, including India and South Korea.
After a tepid day on Wall Street -- which still saw the S&P and Nasdaq hit records -- Asia turned negative.
Tokyo, Hong Kong, Shanghai, Sydney, Singapore, Wellington, Taipei, Manila and Jakarta were all in the red.
The euro held its losses from Monday, having taken a hit from worries about the effects of the trade deal on the eurozone.
The first of two days of negotiations between top US and Chinese officials in Stockholm concluded Monday with no details released, though there are hopes they will agree to extend a 90-day truce that ends on August 12.
The two imposed triple-digit tariffs on each other earlier this year in a tit-for-tat escalation, but then walked them back under the temporary agreement reached in May.
Investors are also looking ahead to a busy few days that includes earnings from tech titans Apple, Microsoft, Meta and Amazon, as well as data on US economic growth and jobs creation.
That all comes as the Fed concludes its policy meeting amid increasing pressure from Trump to slash rates, even with inflation staying stubbornly high.
While it is expected to stand pat on borrowing costs, its post-meeting statement and comments from boss Jerome Powell will be pored over for clues about its plans for the second half of the year in light of the tariffs.
Oil prices extended Monday's rally after Trump shortened a deadline for Russia to end its war in Ukraine to August 7 or 9, following which he vowed to sanction countries buying its crude.
Key figures at around 0230 GMT
Tokyo - Nikkei 225: DOWN 0.9 percent at 40,623.32 (break)
Hong Kong - Hang Seng Index: DOWN 1.1 percent at 25,290.03
Shanghai - Composite: DOWN 0.1 percent at 3,595.46
Euro/dollar: DOWN at $1.1592 from $1.1597 on Monday
Pound/dollar: DOWN at $1.3354 from $1.3356
Dollar/yen: UP at 148.61 yen from 148.52 yen
Euro/pound: UP at 86.81 pence from 86.80 pence
Brent North Sea Crude: UP 0.1 percent at $70.11 per barrel
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
LeMonde
8 minutes ago
- LeMonde
Macron says US-EU deal 'not the end' of talks
France's President Emmanuel Macron said Wednesday, July 30, the European Union had not been "feared" enough in negotiations with the United States towards a trade deal, pledging to be "firm" in follow-up talks. "It's not the end of it," Macron told ministers during a cabinet meeting, according to participants. European Commission President Ursula von der Leyen clinched the framework accord with US President Donald Trump on Sunday after dashing to Scotland as the August 1 deadline loomed for steep levies that threatened to cripple Europe's economy. EU exports are now set to face tariffs of 15% on most products – higher than customs duties before Trump returned to the White House, but much lower than his threatened 30%. "Europe does not see itself enough as a power yet. To be free, you have to be feared. We were not feared enough," said Macron. "France has always held a stance of being firm and demanding. It will continue to do so," he added. The European Union could obtain "new exemptions" in follow-up talks to firm up the deal in details, he said. He however said that negotiations had been held in "difficult circumstances" and that the deal at least "offered visibility and predictability" in the short term. "It preserved French and European interests" in important exporting sectors including aviation, he added.
Euronews
2 hours ago
- Euronews
Customs duties: What will be the impact on European consumers?
The impact of a tentative trade deal struck by the European Union and United States on European consumers will be limited, experts have said. On Sunday, the US and the EU agreed to a deal in order to avoid a trade war between the world's two largest economies, warding off US President Donald Trump's threat of 30% tariffs on most European goods if no deal was reached by 1 August. Under the preliminary agreement, around 70% of EU exports bound for the US will now be subject to a 15% tariff. The remaining 30% of goods are open to further negotiations. The EU has not put in place any tariff barriers targeting American products, so their prices will not rise in Europe. "The impact on European consumers will be limited," Agustín Reyna, Director General of the European Consumers' Organisation (BEUC), said. "Customs duties are paid by the importer. In this case, the 15% tax that the United States imposes on EU products applies to American importers. So that means that certain products could become more expensive for American citizens", Reyna told Euronews. Increase in Chinese products In the long term, Chinese products currently exported to the United States could find their way onto the European market, which could lead to lower prices in Europe. "The main effect will be a drop in demand for European products in the United States, less demand for Chinese products in the United States, and this means that these products will then try to find a market in Europe, which will generally lead to lower prices," Niclas Poitiers, a researcher at Bruegel, told Euronews. These lower prices for European consumers would however be bad news for certain businesses. "There are certain companies that are in direct competition with Chinese competitors. And for these companies, they could face stronger competition and they could also have difficulty with these lower prices. So there is a negative effect," Poitiers said. Drop in demand for EU products in the US? European companies exporting to the United States risk facing a drop in demand on the other side of the Atlantic as their products risk becoming more expensive. This could lead to a drop in their revenues and potentially jobs in Europe. "There are certain companies in certain sectors, like pharmaceuticals, for example, where there is a large proportion of exports and employment for things that go to the United States. But for most sectors, this represents a small proportion of production," Niclas Poitiers said. As a result of the deal, Trump has expressed hope that foreign companies will be encouraged to open factories in the US to avoid paying customs duties. However, the unpredictability of his agreements and the uncertainty surrounding the duration of these tariff barriers could, conversely, discourage European companies from investing in the US. 'Counterproductive' In Brussels, residents interviewed about the terms of the new agreement said they thought the deal would have little impact on their purchasing power. "I don't think it will have an impact on my daily life, maybe a little, but it will affect Americans more," said Ian, from England. He added: "I think tariffs are counterproductive. I think I'd prefer free trade and I think it's damaging for Americans to impose tariffs on everyone." Carolina, an Italian citizen, believes that the trade agreement "will have an impact on everyone in different ways, depending on the areas in which we work and the lives we lead." The EU is too highly dependent on the US and should have greater economic autonomy, she said.
Euronews
2 hours ago
- Euronews
Trump announces tariffs on India and penalty for Russian imports
US President Donald Trump announced on Wednesday in a post on Truth Social that he plans to impose a 25% tariff on goods from India and an additional import tax because of India's import of Russian crude oil. "Remember, while India is our friend, we have, over the years, done relatively little business with them because their tariffs are far too high, among the highest in the world," the post said. He then criticised what he described as India's 'strenuous and obnoxious' trade barriers. India relies on Russia for around 35% of its crude oil imports, reaching a two-year import peak in June of this year, according to the Times of India. The US has imposed sanctions on Russian oil producers and tankers due to the ongoing full-scale invasion of Ukraine. It also imports $80 billion or around €70 billion in Russian military equipment, such as fighter jets, missile systems, submarines and helicopters. Trump accused India of buying "a vast majority of their military equipment from Russia and are Russia's largest buyer of energy" at a time when "everyone wants to Russia to stop the killing in Ukraine." As a result, he intends to charge an additional unspecified 'penalty' starting on Friday as part of the launch of the administration's revised tariffs on multiple countries. India and Russia have close relations, and New Delhi has not supported Western sanctions on Moscow over its war in Ukraine. Earlier in July, NATO Secretary General Mark Rutte warned that India, China and Brazil could face "secondary sanctions" for continuing to buy Russian oil during a meeting with Trump in the White House.
