
European spending drops as trade tensions hit consumer wallets
According to first estimates released by Eurostat on Monday, the seasonally adjusted volume of retail trade decreased by 0.7% in the eurozone and by 0.8% across the EU in May, compared to April.
The decline aligns with economists' forecasts but marks the sharpest drop since August 2023.
The setback follows a modest rebound in April, when sales rose by 0.3% in the eurozone and by 0.8% in the wider European Union.
On an annual basis, eurozone retail sales growth slowed from 2.7% in April to just 1.8% in May — the weakest expansion since July 2024.
Sector breakdown and national trends
Across the eurozone, all major retail sectors experienced contraction. Sales of food, drinks and tobacco fell by 0.7%, while non-food products — excluding automotive fuel — declined by 0.6%.
Automotive fuel sales dropped the most, falling by 1.3% in specialised stores.
In the broader EU, the declines were similarly spread, with food and beverage sales down 0.8%, non-food products dropping by 0.7%, and automotive fuel dipping 1.2%.
Among EU member states, the most severe monthly contractions were seen in Sweden (-4.6%), Belgium (-2.5%) and Estonia (-2.2%). Meanwhile, Portugal (+2.1%), Bulgaria (+2.0%) and Cyprus (+1.0%) posted the strongest increases.
Markets stay cautious as investors watch US trade moves
European equity markets remained largely flat on Monday.
The blue-chip Euro STOXX 50 hovered near 5,300 points, while the broader STOXX 600 was unchanged at 541, as investors awaited clarity on the direction of US trade policy.
The euro edged down 0.3% to $1.1730, while yields on 10-year German Bunds held steady at around 2.57%.
President Donald Trump is expected to issue a new wave of tariff warning letters later on Monday, targeting countries with trade surpluses with the United States.
While the list of recipients remains undisclosed, Commerce Secretary Howard Lutnick confirmed that the "Liberation Day" tariff package originally scheduled for 9 July would now take effect on 1 August.
Trump's administration had previously imposed a 20% import tax on EU-manufactured goods in April, but quickly reduced the rate to 10% as financial markets plummeted.
However, a separate deadline to reach an agreement with the European Union before tariffs rise as high as 50% has now been set for Wednesday.
So far, only China, the United Kingdom and Vietnam have managed to secure temporary exemptions through deals with Washington.
Trump has warned that any country aligning with the 'anti-American policies' of the BRICS bloc will face an additional 10% tariff — with no exceptions.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles

LeMonde
3 hours ago
- LeMonde
Tax on ultra-rich: 'France has the opportunity to lead the way,' say Nobel Prize-winning economists
This op-ed was signed by Daron Acemoglu (MIT), 2024 Nobel Prize in Economics; George Akerlof (Georgetown), 2001 Nobel Prize in Economics; Abhijit Banerjee (MIT), 2019 Nobel Prize in Economics; Esther Duflo (Collège de France and MIT), 2019 Nobel Prize in Economics; Simon Johnson (MIT), 2024 Nobel Prize in Economics; Paul Krugman (CUNY), 2008 Nobel Prize in Economics; Joseph Stiglitz (Columbia), 2001 Nobel Prize in Economics. They have never been so wealthy and yet contribute little, relative to their ability to pay, to the public coffers: From Bernard Arnault to Elon Musk, billionaires have lower tax rates than the average taxpayer. Pioneering research conducted in partnership with tax authorities in several countries demonstrates it: Ultra-wealthy individuals pay around 0% to 0.6% of their wealth in individual income tax – around 0.6% in a country like the United States and 0.1% in a country like France. When including all other mandatory levies (corporate taxes, social security contributions, consumption taxes, etc.) and expressing their tax payments as a fraction of income, their effective tax rates turn out to be lower than those of middle-class or upper-middle-class taxpayers. How did we get here? In short, because the ultra-wealthy can easily structure their wealth to avoid income tax, which is supposed to be the cornerstone of tax justice. In European countries, this optimization is achieved through the creation of family holding companies, in which dividends accumulate sheltered from taxation. In the US, the use of holding companies to dodge taxes has been prohibited since the 1930s, which explains why the wealthy are more heavily taxed there than in Europe – though some have still managed to find workarounds. Fortunately, this situation is not the result of a natural law or some ancient fate: It stems from human decisions and political choices. There is no inevitability here. Not only is it necessary to impose a stronger burden of justice on billionaires, but more importantly, it is possible.


Euronews
4 hours ago
- Euronews
EU-China tensions escalate over medical device trade restrictions
Beijing announced on Sunday that it will restrict government purchases of medical devices from the EU valued at over 45 million yuan (approximately €5.3 million) as a direct response to the European Commission's decision to limit Chinese firms' access to the bloc's public procurement market. Under the Commission's previous move last month, Chinese companies are barred from bidding on public contracts for medical devices in the EU single market exceeding €5 million. Additionally, winning bids must contain no more than 50% of components sourced from China. In a statement, China said it had 'no choice but to implement countermeasures". A spokesperson for China's ministry of commerce added that Beijing has repeatedly expressed, through bilateral dialogues, its willingness to address differences with the EU through dialogue, consultation, and bilateral procurement arrangements. 'Unfortunately, the EU has ignored China's goodwill and sincerity and continues to impose restrictive measures and build new protectionist barriers,' the statement read. This latest escalation follows Beijing's announcement last week of anti-dumping duties of up to 34.9% on European brandy imports for the next five years. The pattern of reciprocal trade actions continues to define the EU-China economic relationship. In recent weeks, China extended its anti-dumping investigation into EU pork imports by six months, while the EU imposed tariffs of up to 45% on Chinese electric vehicles (EVs). These developments come at a sensitive time in EU-China relations, which are undergoing a cautious diplomatic reset. A key milestone in the evolving dialogue will be the upcoming EU-China Summit, scheduled to take place in Beijing in the second half of July 2025. Concerns from Europe MedTech Europe, the EU's medical devices industry association, expressed regret over China's latest decision, saying it further restricts access to the Chinese public procurement market. 'Measures of this nature risk deepening trade tensions and ultimately deny patients timely access to indispensable medical technologies,' the group said in a statement. 'We urge both the European Union and China to engage in constructive dialogue to resolve current challenges to market access and to uphold fair, predictable, and reciprocal trading conditions.' The European Chamber of Commerce in China echoed these concerns, warning that the announcement increases uncertainty for European businesses operating in the country. In particular, the lack of specificity in the new restrictions raises the risk that local authorities managing public tenders may enforce the measures in an overly stringent manner. This could exclude even highly localised European medical device manufacturers from bidding for contracts, according to the Chamber. For instance, although the Chinese government has indicated that European-invested enterprises in China will be exempt from the restrictions, the notice does not clarify what qualifies as a 'European-invested enterprise'. According to the European Chamber, it also remains unclear whether volume-based procurement tenders, which often exceed the threshold, will fall under the new rules.


France 24
4 hours ago
- France 24
Trump steps up pressure for deals as US tariff deadline nears
Trump is due to send a first batch of letters to up to 15 trading partners from noon local time (1600 GMT), warning that US levies on imports will snap back to elevated levels if foreign governments fail to reach agreements with Washington. The duties will not bounce back until August 1, Treasury Secretary Scott Bessent said over the weekend, a move that appears to give more room for dealmaking. Trump imposed a 10 percent tariff on imports from almost all trading partners in early April, but some economies including the European Union were slated to have this rate increase further. As markets plunged at the time, Trump halted the steeper levies to allow for talks. That pause expires on Wednesday. "We are going to have several announcements in the next 48 hours," Bessent told CNBC in an interview Monday. "We've had a lot of people change their tune in terms of negotiations. So my mailbox was full last night with a lot of new offers, a lot of new proposals," Bessent said. He reiterated that higher tariff rates for countries would not return until August 1. There was no immediate response from the White House on whether Trump would formally extend the Wednesday deadline. Asked about the letters Trump plans to send out, Bessent said these would inform partners of the tariff rate their products face when trading with the United States, unless they want to "come back and try to negotiate." Limited results? While the Trump administration has signaled hopes of striking dozens of deals by early July, there have been limited results so far. Washington has unveiled pacts only with Britain and Vietnam, while the United States and China agreed to temporarily lower tariff levels on each other's products that earlier reached three-digits. Bessent told CNBC Monday that he would "be meeting with my Chinese counterpart sometime in the next couple of weeks." The two sides have so far held high-level talks in Geneva and London. But Washington and Beijing's pause on tit-for-tat tariffs is due to expire in mid-August. On whether he was disappointed in the number of trade deals achieved so far, Trump's trade adviser Peter Navarro maintained that he is "happy with the progress we've had." "Every country that we run a major deficit with is fully engaged," he told CNBC on Monday. On Sunday night, Trump wrote on his Truth Social platform that Washington would deliver "tariff letters" or deals to various countries on Monday. In a separate post that night, Trump threatened another 10 percent tariff on countries aligning themselves with the emerging BRICS nations, accusing them of "Anti-American policies" after they slammed his duties at a summit. For now, partners are still rushing to avert Trump's tariffs altogether. The European Commission said that EU chief Ursula von der Leyen had a "good exchange" with Trump on trade when the pair spoke Sunday. Japan's Prime Minister Shigeru Ishiba, however, said Sunday that he "won't easily compromise" in trade talks with Washington.