EU Sanctions Iranian Oil Tycoon for Role in Russian Trade
Hossein Shamkhani, whose father is a senior adviser to Supreme Leader Ayatollah Ali Khamenei, was added to the bloc's sanctions list for his role in the Russian oil trade and as 'a central player' in the country's so-called 'shadow fleet,' the EU said. It also named his Dubai-based firms Admiral Group and Milavous Group Ltd.
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Yahoo
7 minutes ago
- Yahoo
Trump is winning his trade war … but Americans will pay the price
President Donald Trump nabbed a major win over the weekend when he announced a trade agreement with the European Union that would slash the rate of tariffs down to 15 percent. While not the fabled '90 deals in 90 days' that his trade adviser Peter Navarro had pledged when Trump initially paused his 'reciprocal tariffs,' it was still a fairly big deal given that the European Union is the biggest trading partner of the United States. And last week, Trump announced the 'largest TRADE DEAL in history' with Japan. And a few months ago, he announced a multibillion-dollar deal with the United Kingdom. All of these countries or blocs are massive trading partners. But it didn't lead to the euphoria on Wall Street that Trump likely wanted. As of the stock market's closing bell on Monday afternoon, the S&P 500 barely budged and the Dow Jones Industrial Average dipped slightly. It might be because Americans will continue to pay more for products than they did before the deal. But one economist had another thought about the 'biggest deal ever,' as Trump alternately put it, landing with a thud. 'I also think that the markets have taken TACO a bit too seriously,' Tara Hoops, director of economic analysis at the Chamber of Progress, told The Independent. Referencing the acronym for 'Trump Always Chickens Out' — where he has gained a reputation for talking a big game regarding imposing tariffs, or in demanding ceasefires in Ukraine and Gaza, and then backing down hours or days later — Hoops said, Wall Street is in a mode 'where no one is actually believing the frameworks that are coming out.' For all of Trump's talk about how the reciprocal tariffs might lead to a renaissance of American manufacturing, Hoops flagged a fatal flaw: American auto manufacturers will pay 50 percent tariffs on steel and an additional 25 percent on other automobile parts. 'Meanwhile, the same people could just go to the EU and pass on to the consumer,' Hoops said. ' So the only person who is winning here might be Trump, because it seems to him that he has a deal, but the consumers are the ones who have to pay more for these goods.' Trump has said that the United Kingdom will know 'pretty soon' if it will face 50-percent tariffs, but that will likely be cold comfort. And the 50-percent tariffs on European aluminum and steel will remain. Stan Veuger, a senior fellow at the conservative American Enterprise Institute, said that the European Commission started with far too much optimism about the contours of a trade deal with the United States, where they hoped there would be zero tariffs on either sides. 'I think that was really a complete misread of what the Trump administration was going to do on trade,' he told The Independent. 'It might not have been driven by naiveté but rather fear about whether the United States would uphold commitments in Ukraine and NATO. 'I think the combination of those two — just really a misread of Trump's attitudes on trade combined with those concerns about security relationships — made them not retaliate, not respond aggressively, make them not try to build an alliance with Canada and South Korea, other major American trading partners,' he added. Veuger noted that in recent months, even as Trump has paused his tariffs, the value of the dollar has gone down. 'But it's certainly not comprehensive, and also really doesn't resolve all of the trade issues that exist between the US and the EU, for example,' he said. Another unintended consequence may be that Americans might have to replace products they purchase from other countries with lower-quality products made in the United States. And Trump's rupture on tariffs means that other countries will not necessarily trust the word of an American president — because they can simply retract it the way Trump has. So far, Commerce Secretary Howard Lutnick has said that this Friday is the drop-dead date for tariffs. But this week will also show some critical tests for whether Trump puts the foot on the gas for tariffs. On Wednesday, the quarterly GDP report will drop, which will show how much the U.S. economy grew. It will be a helpful barometer because it will simultaneously show how markets reacted to the 'Liberation Day' announcements as well as the pause. That same day, the Federal Reserve will meet and make its announcement on interest rates. Trump has not been happy with Fed Chairman Jerome Powell's decision not to cut rates and he likely will keep them the same this go around as the market absorbs the rates. Lastly, on Friday, the Bureau of Labor Statistics will release its jobs report, which will again be another measurement of the health of the economy since Trump's announcement. If any of these indicators are weak, cause the stock market to nosedive or the cost of U.S. bonds to spike again, it might be time to fire up some tortillas and get ready for a fresh batch of TACO.
Yahoo
8 minutes ago
- Yahoo
Trump is getting the world economy he wants — but the risk to growth could spoil his victory lap
WASHINGTON (AP) — President Donald Trump is getting his way with the world economy. Trading partners from the European Union to Japan to Vietnam appear to be acceding to the president's demands to accept higher costs — in the form of high tariffs — for the privilege of selling their wares to the United States. For Donald Trump, the agreements, driven by a mix of threats and cajoling, are a fulfillment of a decades-long belief in protectionism and a massive gamble that it will pay off politically and economically with American consumers. On Sunday, the United States and the 27-member state European Union announced that they had reached a trade framework agreement: The EU agreed to accept 15% U.S. tariffs on most of its goods, easing fears of a catastrophic trans-Atlantic trade war. There were also commitments by the EU to buy $750 billion in U.S. energy products and make $600 billion in new investments through 2028, according to the White House. 'We just signed a very big trade deal, the biggest of them all,' Trump said Monday. But there's no guarantee that Trump's radical overhaul of U.S. trade policy will deliver the happy ending he's promised. The framework agreement was exceedingly sparse on details. Most trade deals require months and even years of painstaking negotiation that rise and fall on granular details. High-stakes negotiations break Trump's way Financial markets, at first panicked by the president's protectionist agenda, seem to have acquiesced to a world in which U.S. import taxes — tariffs — are at the highest rates they've been in roughly 90 years. Several billion in new revenues from his levies on foreign goods are pouring into the U.S. Treasury and could somewhat offset the massive tax cuts he signed into law on July 4. Outside economists say that high tariffs are still likely to raise prices for American consumers, dampen the Federal Reserve's ability to lower interest rates, and make the U.S. economy less efficient over time. Democrats say the middle class and poor will ultimately pay for the tariffs. 'It's pretty striking that it's seen as a sigh of relief moment,' said Daniel Hornung, a former Biden White House economic official who now holds fellowships at Housing Finance Policy Center and the Massachusetts Institute of Technology. 'But if the new baseline across all trading partners is 15%, that is a meaningful drag on growth that increases recession risks, while simultaneously making it harder for the Fed to cut.' The EU agreement came just four days after Japan also agreed to 15% U.S. tariffs and to invest in the United States. Earlier, the United States reached deals that raised tariffs on imports from Vietnam, Indonesia, the Philippines and the United Kingdom considerably from where they'd been before Trump returned to the White House. More one-sided trade deals are likely as countries try to beat a Friday deadline, after which Trump will impose even higher tariffs on countries that refuse to make concessions. Trump's long-held theory now faces reality The U.S. president has long claimed that America erred by not taking advantage of its clout as the world's biggest economy and erecting a wall of tariffs, in effect making other countries ante up for access to America's massive consumer market. To his closest aides, Trump's use of tariffs has validated their trust in his skills as a negotiator and their belief that the economists who warned of downturns and inflation were wrong. The S&P 500 stock index was basically flat on Monday, but stocks have more than recovered from the tariff-induced selloff in April. 'Where are the 'experts' now?' Commerce Secretary Howard Lutnick posted on X. But the story is not over. For one thing, many of the details of Trump's trade deals remain somewhat hazy and have not been captured in writing. The U.S. and Japan, for instance, have offered differing descriptions of Japan's agreement to invest $550 billion in the United States. 'The trade deals do seem to count as a qualified win for Trump, with other countries giving the U.S. favorable trade terms while accepting U.S. tariffs,' said Eswar Prasad, a Cornell University economist. "However, certain terms of the deals, such as other countries' investments in the U.S., seem more promising in the abstract than they might prove in reality over time.'' Trump is also facing a court challenge from states and businesses arguing that the president overstepped his authority by declaring national emergencies to justify the tariffs on most of the world's economies. In May, a federal court struck down those tariffs. And an appeals court, which agreed to let the government continue collecting the tariffs for now, will hear oral arguments in the case Thursday. And he's yet to reach an accord with China — which has deftly used the threat of retaliatory tariffs and withholding exports of rare earth minerals that are desperately needed for electric vehicles, computer chips and wind turbines to avoid caving in to Trump's demands. The U.S. and China are talking this week in Stockholm, Sweden. Economists remain skeptical of the impacts on US consumers There is also skepticism that tariffs will produce the economic boom claimed by Trump. Analysts at Morgan Stanley said 'the most likely outcome is slow growth and firm inflation,' but not a recession. After all, the 15% tariffs on the EU and Japan are a slight increase from the 10% rate that Trump began charging in April during a negotiation period. While autos made in the EU and Japan will no longer face the 25% tariffs Trump had imposed, they will still face a 15% tax that has yet to appear in prices at U.S. dealerships. The administration has said the lack of auto price increases suggests that foreign producers are absorbing the costs, but it might ultimately just reflect the buildup of auto inventories to front-run the import taxes. 'Dealers built stocks ahead of tariff implementation, damping the immediate impact on retail prices. That cushion is starting to wear thin,' Morgan Stanley said in a separate note. 'Our Japan auto analyst notes that as pre-tariff inventory clears, replacement vehicles will likely carry higher price tags.' Economist Mary Lovely of the Peterson Institute for International Economics warned of a 'slow-burn efficiency loss'' as U.S. companies scramble to adjust to Trump's new world. For decades, American companies have mostly paid the same tariffs – and often none at all – on imported machinery and raw materials from all over the world. Now, as a result of Trump's trade deals, tariffs vary by country. 'U.S. firms have to change their designs and get inputs from different places based on these variable tariff rates,'' she said. 'It's an incredible administrative burden. There's all these things that are acting as longer-term drags on economy, but their effect will show up only slowly.'' Mark Zandi, chief economist at Moody's Analytics, said that the United States' effective tariff rate has risen to 17.5% from around 2.5% at the start of the year. 'I wouldn't take a victory lap,'' Zandi said. 'The economic damage caused by the higher tariffs will mount in the coming months.'' ___ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
12 minutes ago
- Yahoo
Former prime minister Stephen Harper says Russian President Vladimir Putin 'took what is a fledging democracy and turned it back into a tyranny.'
Former prime minister Stephen Harper says Russian President Vladimir Putin is "a real-life Bond villain" and "an evil man" who will leave Russia poor and in chaos. "It's a tragedy that somebody with his ability just wasn't imbued with any sense of ideals or higher purpose," Harper said on Monday during a keynote session at the Council of State Governments Midwestern Legislative Conference in Saskatoon. Harper's comments were in response to a question from the moderator about which global leader, whether ally or rival, left the strongest impression on him. "I try in my memoirs to say good things about people or not say much at all," Harper said before he launched into a sharp critique of the Russian president. The former prime minister acknowledged that Putin is smart, hard-working and "a real psychological expert," but that he is also "an evil man. He took what is a fledging democracy and turned it back into a tyranny." WATCH | Harper says Putin will leave Russia in 'chaos': "I don't accept a drink from him or anything like that," Harper joked — a likely reference to allegations the Russian government has poisoned dissidents like Alexei Navalny, who died last year in a remote Russian prison. Harper's frustrations with the Russian president go back more than a decade. In 2014, Harper was lauded by Australian media for admonishing Putin over Russia occupying and annexing Crimea. Australian media reported Harper told Putin to "get out of Ukraine" at a private leaders' retreat ahead of the official opening of the Group of 20 summit in Brisbane. Harper told the Saskatoon conference that he and Putin "had a notoriously bad relationship by the end — quite deliberate on my part, actually …" "Privately I was calling him out on this stuff all the time and quite getting under his skin actually, which I enjoyed," Harper said. U.S. actions 'we can't forget' During his keynote, Harper said Americans should understand that Canadians "are a combination of just angry and bewildered by what is happening here. That is very real and it is very deep." He added that U.S. President Donald Trump's administration believes "everybody needs America, but America doesn't need anybody. That just isn't true." "The Trump administration is completely right to deal with some of its trade challenges. But declaring a trade war on 200 other countries at the same time? Come on. That's not how you move the ball forward long term." Canada is working to reach a trade agreement with Trump by Aug. 1. The U.S. president has threatened to slap a 35 per cent tariff on goods that don't comply with the Canada-U.S.-Mexico Agreement (CUSMA) on that date. WATCH | Canada's team downplays prospects for deal by Aug. 1: Harper said Canada seeing the United States "flex its muscles in a way that has nothing to do with values or ideals, that is something we can't forget. We cannot make ourselves entirely dependent on that relationship." He agreed with Canada's decision to spend more on defence and said "we should have been doing it all along." Between 2012 and 2015, the Conservatives — led by Harper — faced substantial criticism for cutting the Department of National Defence budget by $2.7 billion annually in order to reach a balanced budget. Carney has committed to meeting the NATO benchmark of spending two per cent of the country's gross domestic product on defence by the end of current fiscal year in March. As part of a new pact with NATO leaders, Canada has also promised to spend five per cent of GDP on defence-related projects by 2035.
