EU readies retaliatory list targeting US services
United States President Donald Trump blindsided the EU earlier this month by threatening to slap 3% tariffs on the bloc's goods, despite months of talks to get an agreement.
If they don't clinch a deal by Aug 1, Brussels has warned it will have no choice but to retaliate against Trump's steep levies because of their economic impact, and has drawn up two lists of US goods to target.
The European Commission, steering trade policy for the 27-country bloc, is also working on a list of American services -- including financial services -- it could hit with restrictions, for example on public procurement, EU diplomats said.
It could also mean excluding certain suppliers, one diplomat said, adding that the commission had not yet put forward any list to EU member states.
Any action on services would be in addition to two sets of retaliatory tariffs on goods: one put forward this week that targets €72 billion (US$83 billion) of US products, and another worth €21 billion, drawn up in response to steel and aluminium tariffs.
One EU diplomat said the bloc could retaliate step-by-step, hitting the United States with first the smaller, then the larger counter tariffs on goods -- before potentially escalating to services.
The official also stressed the EU had yet to even approve the measures by vote and that they could still change, but another diplomat said Brussels would have no choice but to respond "forcefully".
Most EU member states want to keep options on the table but have backed the commission's attempts to try once again to get an agreement before firing off retaliatory measures.
The EU's top trade negotiator, Maros Sefcovic, jetted to Washington on Wednesday for talks with his US counterparts but the commission did not provide details on meetings.
There are questions over Europe's appetite for a damaging fight with Trump if he slaps on the 30% levies as promised.
But France has been pushing for Brussels to take a harder line and consider deploying its most powerful trade tool, known as the anti-coercion instrument, if negotiations with the United States end in disappointment.
Even if Brussels were to activate this so-called trade "bazooka", it could take months before any measures were taken, according to the rules.
First, the commission would have four months to investigate the third country it accuses of detrimental trade policies -- then member states would have eight to 10 weeks to back any proposal for action.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Bangkok Post
14 hours ago
- Bangkok Post
EU readies retaliatory list targeting US services
BRUSSELS — The European Union (EU) executive is preparing a list of proposed restrictions on US services companies -- including tech giants -- should Brussels fail to strike a trade deal with Washington, European diplomats said on Thursday. United States President Donald Trump blindsided the EU earlier this month by threatening to slap 3% tariffs on the bloc's goods, despite months of talks to get an agreement. If they don't clinch a deal by Aug 1, Brussels has warned it will have no choice but to retaliate against Trump's steep levies because of their economic impact, and has drawn up two lists of US goods to target. The European Commission, steering trade policy for the 27-country bloc, is also working on a list of American services -- including financial services -- it could hit with restrictions, for example on public procurement, EU diplomats said. It could also mean excluding certain suppliers, one diplomat said, adding that the commission had not yet put forward any list to EU member states. Any action on services would be in addition to two sets of retaliatory tariffs on goods: one put forward this week that targets €72 billion (US$83 billion) of US products, and another worth €21 billion, drawn up in response to steel and aluminium tariffs. One EU diplomat said the bloc could retaliate step-by-step, hitting the United States with first the smaller, then the larger counter tariffs on goods -- before potentially escalating to services. The official also stressed the EU had yet to even approve the measures by vote and that they could still change, but another diplomat said Brussels would have no choice but to respond "forcefully". Most EU member states want to keep options on the table but have backed the commission's attempts to try once again to get an agreement before firing off retaliatory measures. The EU's top trade negotiator, Maros Sefcovic, jetted to Washington on Wednesday for talks with his US counterparts but the commission did not provide details on meetings. There are questions over Europe's appetite for a damaging fight with Trump if he slaps on the 30% levies as promised. But France has been pushing for Brussels to take a harder line and consider deploying its most powerful trade tool, known as the anti-coercion instrument, if negotiations with the United States end in disappointment. Even if Brussels were to activate this so-called trade "bazooka", it could take months before any measures were taken, according to the rules. First, the commission would have four months to investigate the third country it accuses of detrimental trade policies -- then member states would have eight to 10 weeks to back any proposal for action.
Bangkok Post
18 hours ago
- Bangkok Post
Investors urged to buy gold as price surges
DBS Vickers Securities recommends investors increase their exposure to gold and reduce their allocation of government bonds from developed economies, predicting the bullion price will hit US$3,765 an ounce by the fourth quarter of this year. Wey Fook Hou, chief investment officer at DBS Bank, noted that the first 100 days of US President Donald Trump's second term sent shockwaves across global markets, especially by escalating a global tariff war. While these moves aim to reposition the US geopolitically, ongoing policy uncertainty is raising the risk premium on American financial assets. In addition, the recent passage of sweeping tax reforms has intensified worries about the long-term fiscal stability of the US. According to the Congressional Budget Office, the US federal budget deficit is projected to reach $1.9 trillion this year, with debt levels rising to 118% of GDP by 2035. Moody's downgrade of US sovereign credit to Aa1, with 30-year bond yields exceeding 5%, underscores rising investor anxiety over the sustainability of US fiscal policy. Trump's "beautiful tariff war" has two main objectives, first to strategically counter China's influence, and also to generate revenue to address mounting national insolvency. "However, even with an aggressive 20% universal import tariff, the net revenue gain after dynamic economic effects would be just $185.2 billion, insufficient even to cover federal interest payments," Mr Wey noted. These fiscal constraints have prompted DBS to revise its investment strategy, he said. For equities, the bank has maintained a neutral stance overall, with expected performance divergence across regions and sectors. Belief in US technology stocks has also stayed intact, with services favoured over goods-based sectors. Meanwhile DBS suggests investors increase their allocation to European and Asia ex-Japan equities, citing fiscal stimulus, attractive dividend yields, and valuation discounts versus developed markets. For fixed income, developed market government bonds were downgraded to neutral amid persistent inflation and fiscal strain. DBS favours high-quality credit with A or BBB ratings, and has adopted a "duration barbell" strategy, focusing on those with 2–3 year and 7–10 year maturities, capital securities, and short-duration high-quality debts. DBS is overweight on alternative assets, especially gold, with a price target of $3,765 an ounce by this year's fourth quarter. The bank also recommends income-generating private equity, including infrastructure, as "a source of resilient returns in a volatile environment". "Investors tracking fiscal risks are expected to shift further away from US and Japanese assets. As capital diversifies from dollar-denominated holdings, Asian local currency bonds are emerging as beneficiaries," Mr Wey said. The US dollar is likely to continue weakening, pressured by inconsistent and controversial policies under the Trump administration. As a result, alternative safe-haven currencies are expected to gain favour, added Mr Wey. Chanpen Sirithanarattanakul, head of research at DBS Vickers Securities (Thailand), expects Thailand's GDP to grow just 1.8% in 2026 if US tariffs are 18%-20%, with a Stock Exchange of Thailand (SET) index estimate of 1,300 points. However, if tariffs stay elevated at 36%, growth could slow to just 1%, and the SET index target would be adjusted, she said. Despite macro challenges, selected Thai sectors remain attractive, including hospitals and telecommunications. The baht is projected to appreciate slightly to 32.8 baht against the greenback this year, and to 32 baht to the dollar in 2026. The brokerage expects Thai interest rates to be cut once or twice this year, with another cut likely in 2026. "Domestic political developments, especially in August and September, as well as US tariff policy, will have a significant impact on investment sentiment," Ms Chanpen noted.
Bangkok Post
a day ago
- Bangkok Post
Thailand to offer ‘no tariffs on 90% of US goods'
Thailand is ready to offer scrapping tariffs on 90% of US goods, up from 60% in an earlier proposal, in a bid to avert a punishing 36% levy threatened by President Donald Trump, according to a business group advising Thai negotiators. The government's third proposal would potentially eliminate tariffs and non-tariff barriers on about 10,000 US products, Chanintr Chalisarapong, vice-chairman of the Thai Chamber of Commerce, told Bloomberg News in an interview on Thursday. He added that he expects the final tariff on Thailand will be set in a range of 18% to 20% — down from Trump's most recent threatened level of 36%. The new proposal, which was to be presented to Washington during a conference call scheduled for Thursday night, could reduce Thailand's $45.6-billion trade surplus with the US by 70% within three years and lead to balanced trade within five years, according to Mr Chanintr. The new figures are even more ambitious than Thailand's July 6 offer to cut tariffs on over 60% of products and eliminate the trade gap in seven or eight years. 'I expect our proposal to be solid and practical. The numbers should be satisfactory to the US,' said Mr Chanintr, who has consulted with negotiators led by Finance Minister Pichai Chunhavajira over the past week to finalise details. 'What we'll be offering is potentially more than Indonesia and Vietnam,' he said. 'Since we're a manufacturing country, we have potential to use a lot more US goods and process them into products that we can export.' Thailand is one of the Southeast Asian countries racing to finalise terms with the US. Failure to secure a reduced tariff with its largest export market, which accounted for about 18% of Thailand's total shipments last year, could result in a sharp decline in merchandise shipments and shave as much as one percentage point off its projected export-driven economic growth. Trump has announced deals for 20% tariffs on Vietnamese goods and 19% for Indonesia, though transshipments through both countries would face higher levies. Bangkok rushed to sweeten its proposal after Trump announced last week that the 36% tariff level on Thailand would start Aug 1. Mr Pichai, who had submitted a second proposal by then, said he was shocked and had been expecting a lower number. Thailand's new proposal may also include a tax exemption for US digital services that operate in Thailand or serve Thai customers, Mr Chanintr said. As well, it may also pledge more imports of liquefied natural gas, Boeing planes, and key US food and agricultural products. The latter could include corn, soybeans and barley, which are important to Trump voters in rural states, he added. Cheap US food and farm products are expected to help cut costs for the Thai pet food industry, which exports heavily to other countries. Lower costs for Thailand's animal feed industry will also likely boost productivity for the domestic poultry, livestock, and food-processing industries down the value chain, Mr Chanintr said. Mr Pichai, who has said he was pushing for a best-case rate of 10%, is expected to hold more talks with US Trade Representative Jamieson Greer. In their meeting in Washington earlier this month, Mr Pichai agreed to cut import taxes for US products that are in short supply in Thailand and tighten rules to prevent transshipments. 'We'd like for talks to conclude soon so that trade can continue. There's been too much uncertainty,' Mr Chanintr said, adding he is confident Thailand can secure a deal before Aug 1. 'We're so close to the finish line.' Thai growth is already under pressure from Southeast Asia's highest household debt and sluggish domestic consumption. A favourable deal would also ease investor concerns stoked by political turmoil following the court-ordered suspension of Prime Minister Paetongtarn Shinawatra over alleged ethical misconduct in handling a border dispute with Cambodia. Thailand's exports rose about 15% in the first five months of the year, driven largely by frontloading during the 90-day pause to allow tariff talks. 'This is a global trade war, not a bilateral one,' Mr Chanintr said. 'Don't forget how high the stakes are.'
