European markets rally; Trump delays 50% EU tariffs
LA DEFENSE: This photograph shows the logo of Euronext, a pan European stock exchange, above financial information of the index CAC40. US President Donald Trump has called for a 50 percent tariff on imports from the European Union, raising the stakes in his global trade war. – AFP
PARIS: European stock markets rallied Monday after US President Donald Trump delayed 50-percent tariffs on the European Union until July 9 to give more time for negotiations. Trump sent the markets into a tailspin again on Friday when he threatened to hit EU goods with the huge tariff from June 1 as talks were "going nowhere". Along with that threat, he warned that he would hit smartphone makers with 25-percent tolls if they did not make their handsets in the United States.
Trump provided some relief Sunday by saying he was putting off the EU tariffs until July 9 after a "very nice call" with European Commission President Ursula von der Leyen, adding that officials will "rapidly get together and see if we can work something out". Von der Leyen vowed to move "swiftly" to reach a deal. The Paris CAC 40 index was up 1.2 percent in midday deals while the Frankfurt gained 1.7 percent. London and Wall Street were closed for holidays, but US futures were higher while Asia struggled.
Analysts said the latest unexpected salvos from the White House highlighted the uncertain path investors are having to walk owing to the president's volatile policy pivots. "The stock market seems to dance to Trump's tune: first a threat, then a pullback, quickly followed by a rebound as speculative investors anticipate a concession from the US president," said Jochen Stanzl, chief market analyst at CMC Markets trading platform. "This morning's confirmation of such expectations reinforces the so-called 'Trump Pattern', which is increasingly seen as a successful strategy for risk-tolerant investors." The dollar remained under pressure after dropping Friday.
Steel saga
Investors have also fretted over Trump's economic policies, with US long-term government bond yields surging last week over concerns that his tax relief and spending cuts plan - which was approved by the House - will increase the US debt pile. Traders are also looking ahead to Wednesday's release of minutes from the Fed's earlier May policy meeting, hoping for an idea about the central bank's views on the economy. That is followed by the Fed's preferred measure of inflation - US personal consumption expenditures - on Friday.
In company news, shares in Seoul-listed Samsung rose almost one percent despite Trump's threat of tariffs on smartphone makers. In Tokyo, Nippon Steel rallied as much as 7.4 percent after Trump threw his support behind a new "partnership" between the Japanese firm and US Steel. It ended up 2.1 percent. His remarks Friday were the latest in a long saga surrounding Nippon Steel's $14.9-billion takeover of US Steel, first announced in late 2023. He said US Steel's headquarters would remain in Pittsburgh and that the partnership would create at least 70,000 jobs and add $14 billion to the US economy. However, neither the White House nor the two companies have published details of the new arrangement and many questions remain. US Steel soared 21 percent in New York on Friday. - AFP
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