US stocks fall as Trump ramps up tariff threats
Trump dampened earlier optimism by firing off more than 20 letters to governments outlining new tariffs if agreements are not reached by Aug 1.
Bitcoin, meanwhile, pushed on with its climb, reaching an all-time high above US$118,000.
The dollar was higher against its main rivals, and oil prices gained.
Wall Street's three main indices fell, with both the S&P 500 and Nasdaq retreating from records.
But the pullback was relatively modest, implying that many investors are taking a wait-and-see approach to Trump's latest tariff broadsides.
"We have yet to see new substantial tariffs actually be enforced," said Adam Sarhan of 50 Park Investments, describing investors as sceptical that the biggest levies will actually be enacted.
A note from Oxford Economics characterised Trump's moves as "more tariff theatrics", while allowing that the levy on Canada produced "jitters".
In Europe, where investors were awaiting news of Trump's new tariff level targeting the European Union, the Paris stock market dropped 0.9 per cent and Frankfurt 0.8 per cent.
"The fallout hasn't been more pronounced because the market still continues to view all of this as a point of negotiating leverage," said analyst Patrick O'Hare of Briefing.com.
Trump dialled up his trade war rhetoric Thursday, warning that Canada faced a 35 per cent tax, while other countries would be handed blanket tariffs of up to 20 per cent, from the current 10 per cent.
That came after he outlined plans to impose 50 per cent tariffs on copper imports, while threatening 200per cent levies on pharmaceuticals, and hit Brazil with a new 50 per cent charge.
The moves are the latest by the White House in a campaign it says is aimed at ending decades of the United States being "ripped off".
Trump's initial bombshell tariffs announcement in April sent markets into turmoil until he paused them for three months, and the latest measures have had less impact.
London's FTSE 100 and the pound retreated after data showed the UK economy unexpectedly shrank in May - its second consecutive monthly decline.
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Straits Times
an hour ago
- Straits Times
EU says it still wants US trade deal, will defend interests
Sign up now: Get ST's newsletters delivered to your inbox US President Donald Trump has threatened a 30 per cent tariff on European goods starting on Aug 1, unless the US and EU agree a trade deal. BRUSSELS - The EU is ready to retaliate to safeguard its interests if the US proceeds with imposing a threatened 30 per cent tariff on European goods starting on Aug 1, European Commission President Ursula von der Leyen said on July 12. However, Dr von der Leyen, head of the EU executive which handles trade policy for the 27 member countries of the EU, said it was also ready to keep working towards an agreement by Aug 1. 'Few economies in the world match the European Union's level of openness and adherence to fair trading practices,' she said, in response to new threats by US President Donald Trump on July 12 escalating a trade war Europe had hoped to avoid. 'We will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required,' she said, of possible retaliatory tariffs on US goods entering Europe. European capitals swiftly backed that position. 'As part of European unity, it is more than ever up to the Commission to assert the Union's determination to defend European interests resolutely,' French President Emmanuel Macron said on X. German Economy Minister Katherina Reiche urged a statement for a 'pragmatic outcome to the negotiations'. Top stories Swipe. Select. Stay informed. World US slaps 30% tariffs on EU and Mexico; EU warns of countermeasures Singapore S'pore shows what's possible when digital innovation is matched with purpose: UK foreign secretary Singapore Casual racism should be tackled by getting more people to understand it is not acceptable: David Neo Asia Fuel was cut off during take-off: Preliminary report on Air India crash Singapore Pulling back the curtain: A backstage look at the 2025 NDP show segment Singapore $3 cashback for hawker centre meals and shopping at heartland stores with DBS PayLah initiative Singapore Body of 62-year-old man recovered from waters off East Coast Park Asia Aerobridge hits Qantas plane at Sydney Airport, damaging engine, delaying flight 'The tariffs would hit European exporting companies hard. At the same time, they would also have a strong impact on the economy and consumers on the other side of the Atlantic,' she said. Spain's Economy Ministry backed further negotiations but added that Spain and others in the EU were ready to take 'proportionate countermeasures if necessary'. Mr Trump has periodically railed against the European Union, saying in February it was 'formed to screw the United States' and asking why Europe exports so many cars but buys so few US cars in return. His biggest grievance is the US merchandise trade deficit with the EU, which in 2024 amounted to US$235 billion (S$300 billion), according to US Census Bureau data. The EU has repeatedly pointed to the US surplus in services, arguing it in part redresses the balance. Combining goods, services and investment, the EU and the United States are each other's largest trading partners by far. The American Chamber of Commerce to the EU said in March the trade dispute could jeopardise US$9.5 trillion of business in the world's most important commercial relationship. 'Europe must not allow itself to be intimidated by this, but must soberly seek a solution at the negotiating table on equal terms,' said Mr Dirk Jandura, president of the German exporters association BGA, adding the latest threats were a 'well-rehearsed' part of his negotiating strategy. Mr Carsten Brzeski, global head of macro at ING, said Mr Trump's move suggested that months of negotiations remained deadlocked and that things were inching towards a make-or-break moment for the transatlantic trade relationship. 'The EU will now have to decide whether to budge or to play hardball,' he said. 'Its hard to draw real conclusions right now other than this will bring market volatility and even more uncertainty.' Mr Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, noted that the brunt of the US tariffs, if implemented, would be felt by US consumers. 'The EU should take a hard line in negotiations, because model calculations show that tariffs against the EU have a stronger negative effect in the US than in the euro zone.' That said, there would also be clear repercussions for the euro area economy, already struggling with weak growth. The European Central Bank had used a 10 per cent tariff on EU exports to the US as the baseline in its latest economic projections, which put output growth in the euro area at 0.9 per cent this year and 1.1 per cent the next and 1.3 per cent in 2027. It said a 20 per cent US tariff would curb growth by 1 percentage point over the same period and also pull down inflation to 1.8 per cent in 2027, from 2 per cent in the baseline scenario. It did not even offer an estimate for the possibility of a 30 per cent tariff. REUTERS
CNA
2 hours ago
- CNA
Trump says Mexico, EU to face 30% tariff from Aug 1
WASHINGTON: President Donald Trump on Saturday (July 12) targeted Mexico and the European Union with steep 30 per cent tariffs, dramatically raising the stakes in already tense negotiations with two of the largest US trading partners. Both sets of duties would take effect Aug 1, Trump said in formal letters posted to his Truth Social platform. The president cited Mexico's role in illicit drugs flowing into the United States and a trade imbalance with the EU as meriting the tariff threat. Both partners swiftly slammed the new duties, with the EU warning they could disrupt supply chains - but insisting it would continue talks seeking an agreement with the US - while Mexico branded them an "unfair deal." French President Emmanuel Macron expressed "very strong disapproval" of the step and called on the bloc to "resolutely defend European interests." Since returning to the presidency in January, Trump has unleashed sweeping stop-start tariffs on allies and competitors alike, roiling financial markets and raising fears of a global economic downturn. But his administration is coming under pressure to secure deals with trading partners after promising a flurry of agreements. So far, US officials have only unveiled two pacts, with Britain and Vietnam, alongside temporarily lower tit-for-tat duties with China. NOT ENOUGH The fresh duties for Mexico announced by Trump would be higher than the 25 percent levy he imposed on Mexican goods earlier this year, although products entering the United States under the US-Mexico-Canada Agreement (USMCA) are exempted. "Mexico has been helping me secure the border, BUT, what Mexico has done, is not enough," Trump said in his letter to Mexican President Claudia Sheinbaum. "Starting August 1, 2025, we will charge Mexico a Tariff of 30% on Mexican products sent into the United States." The Mexican government said it had been informed of the new threat during talks in the United States on Friday. "We mentioned at the table that it was an unfair deal and that we did not agree," the Mexican economy and foreign ministries said in a joint statement. The EU tariff is also markedly steeper than the 20 per cent levy Trump unveiled in April, as negotiations with the bloc continue. "Imposing 30 per cent tariffs on EU exports would disrupt essential transatlantic supply chains, to the detriment of businesses, consumers and patients on both sides of the Atlantic," European Commission chief Ursula von der Leyen said in a statement, in reply to Trump's letter to her. "We remain ready to continue working towards an agreement by August 1. At the same time, we will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required," she added. Meanwhile, Macron backed efforts to reach an agreement that "reflects the respect that trade partners such as the European Union and the United States owe each other." But he urged the bloc to "step up the preparation of credible countermeasures" to implement if the two sides fail to reach an agreement in time. PRECARIOUS MOMENT The EU, alongside dozens of other economies, had been set to see its US tariff level increase from a baseline of 10 per cent on Wednesday, but Trump pushed back the deadline to Aug 1. Mexico and Canada come under a separate tariff regime. Since the start of the week, Trump has sent out letters to more than 20 countries with updated tariffs for each, including a 35 per cent levy for Canada. A US official told AFP Saturday that the USMCA exemption was expected to remain for both Mexico and Canada, although the president has yet to make final decisions. Brussels said Friday that it was ready to strike a deal with Washington to prevent the return of 20 per cent levies. The EU has prepared retaliatory duties on US goods worth around 21 billion euros after Trump also slapped separate tariffs on steel and aluminium imports earlier this year, and they are suspended until Jul 14. European officials have not made any move to extend the suspension but could do it quickly if needed. "Despite all the movement toward a deal, this threat shows the EU is in the same camp of uncertainty as almost every other country in the world," said Josh Lipsky, chair of international economics at the Atlantic Council.
International Business Times
4 hours ago
- International Business Times
Wall Street Ends Lower as Trump Targets Canada with Tariffs, Nvidia Hits $4 Trillion
The impact of the US president's tariff threats was evident in the US markets. Wall Street slid on Friday, led by a decline in Meta Platforms, after Donald Trump announced that the U.S. was stepping up sanctions against Canada and other trading partners. Trump said he would impose a 35% tariff on Canadian imports and suggested that many others would receive a blanket 15 to 20% import tariff. The S&P 500 dropped 0.33% to 6,259.75, and the Nasdaq was down 0.22% at 20,585.53, while the Dow finished 0.63% lower at 44,371.51. Reports of potential new EU antitrust fines saw Meta fall 1.3%. Nvidia Surges, Drone Stocks Soar Even with the sharp downturn, shares of Nvidia rose 0.5%, to a market value of $4.02 trillion, its highest ever, boosting confidence in AI-related stocks. Meta Platforms shares dropped by 1.3% after reports said it's unlikely to change its EU data practices, possibly facing new antitrust fines. Defense companies AeroVironment and Kratos Defense surged about 11% each after the U.S. Defense Secretary said more drone production is needed. Kraft Heinz gained 2.5% on news of a potential breakup of the company, and Levi Strauss surged 11% after boosting its full-year profit outlook. Looking Ahead to Earnings Season Volume was light, with 15.4 billion shares changing hands on U.S. exchanges, below the 20-day average of 18.3 billion. The S&P 500 was down 0.3% for the week, while the Dow dropped 1% and the Nasdaq lost 0.1%. Analysts have expected earnings in the second quarter to rise 5.7% from a year earlier, pulled up by tech but dragged down by energy and consumer sectors. Next week's results from JPMorgan, Netflix, and Johnson & Johnson could show whether Trump's tariffs are cutting into corporate profits.
