Euro Rises after US, EU Agree to Tariff Deal
Meeting in Scotland on Sunday, U.S. President Donald Trump and European Commission President Ursula von der Leyen announced the deal, which will result in a 15% tariff on EU goods, half what Trump had threatened to impose from August 1.
Senior U.S. and Chinese negotiators are due to meet in Stockholm on Monday with an aim to extend a trade truce and prevent steep tariff hikes. Meanwhile, investor attention is shifting towards corporate earnings and central bank meetings in the U.S. and Japan.
'It could be a positive week, just purely from the fact that now we know the rules of the game, if you like,' said Rodrigo Catril, senior currency strategist at National Australia Bank.
'Now that there is more clarity, you would think that not only in the U.S., but around the globe, there will be a little bit more willingness to look at investment, to look at expansions, and to look at where the opportunities are,' he said on a NAB podcast.
The euro stood at $1.1763 EUR=, up 0.2% so far in Asia. The common currency rose 0.2% to 173.78 yen EURJPY=EBS.
Trump said the EU plans to invest some $600 billion in the U.S. and dramatically increase its purchases of American energy and military equipment. The pact is similar to one forged with Tokyo negotiators last week that will see Japan investing some $550 billion in the U.S. and a 15% tariff imposed on its cars and other imports.
The baseline 15% tariff will still be seen by many in Europe as too high, compared with Europe's initial hopes to secure a zero-for-zero tariff deal.
China is facing an August 12 deadline to reach a durable trade pact with the U.S. No breakthrough is expected in the U.S. and China talks in Stockholm, but analysts said another 90-day extension of a trade truce struck in mid-May was likely.
The U.S. dollar advanced on Friday, bolstered by solid economic data that suggested the Federal Reserve could take its time in resuming interest rate cuts. Both the Fed and the Bank of Japan are expected to hold rates steady at this week's policy meetings, but traders are focusing on the subsequent comments to gauge the timing of the next moves.
The dollar was little changed at 147.68 yen JPY=. The dollar index =USD, which tracks the greenback against major peers, fell 0.1% to 97.534.
Sterling traded at $1.34385 GBP=D3, down almost 0.1%. The Australian dollar fetched $0.6576 AUD=D3, up 0.2%, while New Zealand's kiwi dollar was flat at $0.6019 NZD=D3.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Japan Times
10 minutes ago
- Japan Times
Japan food exports expand 15.5% in January to June
Japan's exports of agricultural, forestry and fishery products and other food items grew 15.5% from a year earlier to ¥809.7 billion ($5.48 billion) between January and June, the agriculture ministry said Monday. Exports to the United States, which announced "reciprocal" tariffs in April, hit a record first-half high of ¥141.0 billion, up 22.0%. The surge was driven by robust demand for scallops, green tea and yellowtail. The U.S. was the largest destination for such exports from Japan, accounting for 18.6% of the total exports. According to a survey by the ministry, some businesses still refrained from exporting due to concerns over uncertainty regarding U.S. President Donald Trump's tariffs. Exports to Taiwan and South Korea also hit record highs. The ministry attributed this to increased recognition of Japanese cuisine thanks to a rise in visitors to Japan, as well as an increase in Japanese restaurants. Meanwhile, exports were the highest on record for 19 items including beef, green tea and yellowtail. Scallop exports saw the sharpest increase, jumping ¥10.9 billion to around ¥35.0 billion. Exports of the shellfish to the U.S., Vietnam and Thailand grew. Green tea exports followed with ¥26.3 billion, up ¥10.4 billion. Shipments of matcha green tea powder, used for lattes and desserts, to the U.S., European and Southeast Asian markets were higher. The ministry has set an export target of ¥2 trillion for 2025. To achieve this, exports must increase over 47% in the July-December second half. The ministry plans to accelerate efforts to fully resume exports of fishery products to China.
Japan Times
22 minutes ago
- Japan Times
The EU's economic surrender only deepens its dependence on the U.S.
When U.S. President Donald Trump and European Commission President Ursula von der Leyen shook hands at Trump's Scottish golf resort late last month, they weren't just announcing a new trade deal — they were formalizing Europe's economic and ideological surrender. By agreeing to 15% tariffs on most exports to the United States, the European Union has capitulated to Trump's zero-sum worldview. In doing so, it has abandoned the principles of multilateralism that have long guided global trade. The economic consequences are immediate and severe. European exporters now face tariffs nearly 10 times higher than the previous trade-weighted average of 1.6%. Volkswagen alone has reported a €1.3 billion ($1.5 billion) hit due to higher U.S. tariffs. But the tariff rate itself is just part of the problem. The real damage lies in what the EU agreed to pay for the 'privilege' of maintaining access to the U.S. market: a commitment to purchase $750 billion worth of American energy over three years and to invest another $600 billion in the U.S. economy. These staggering sums will inevitably divert resources from European development and innovation while legitimizing bilateral coercion over the multilateral, rules-based World Trade Organization system. As critics have rightly pointed out, this massive outflow comes directly at the expense of domestic investment. What makes the EU's surrender especially troubling is how unnecessary it was. As America's largest economic partner, with nearly $1 trillion in annual trade, the EU has considerable leverage. While the U.S. runs a $235.6 billion goods deficit with the EU, the bloc's €148 billion services deficit with the U.S. offered clear avenues for retaliation, from digital taxes to restrictions on American tech giants. Weeks earlier, anticipating a stalemate, European policymakers had prepared counter tariffs targeting €93 billion worth of American goods. But the EU had far more potent weapons at its disposal. Its Anti-Coercion Instrument, for example, could have barred U.S. companies from government contracts, revoked intellectual-property rights and imposed broader trade restrictions. Yet national leaders, fearing Trump's retaliation and under pressure from domestic industries eager to maintain access to the U.S. market, refused to authorize von der Leyen to use any of these tools, forcing her to negotiate from a position of weakness. The contrast with other U.S. trading partners could not be starker. When the United Kingdom secured a 10% tariff rate from Trump in May, European leaders expressed concern about accepting similar terms. Now, they hail 15% tariffs on EU exports as a diplomatic breakthrough. The uncomfortable truth is that Britain, acting alone, negotiated better terms than the EU as a whole. This failure exposes the fundamental weakness of European governance. Lacking a true EU-wide governance system, the bloc remains incapable of translating competing national agendas into a unified position. With von der Leyen hamstrung by member states prioritizing narrow domestic interests over European cohesion, the result was a deal that pleases no one but Trump and locks Europe into a state of structured dependency. The EU's failure to push back against Trump is especially troubling given its stated goal of achieving strategic autonomy. Some may argue that the deal — technically not a formal trade agreement but rather a set of statements outlining an ongoing negotiation process — buys time. By appeasing Trump, the argument goes, the Commission has maintained transatlantic ties while creating space for future carve-outs. But if this were truly a time-buying strategy, we would expect the EU to take concrete steps to advance strategic autonomy: boosting defense spending, accelerating supply-chain diversification and investing in retaliatory capabilities. Instead, after years of pledging to reduce reliance on foreign powers, EU leaders chose to replace Russian energy imports with American supplies and commit to massive purchases of U.S. military equipment. Europe's subordination both reflects and reinforces the continent's dependence on U.S. power. For decades, European countries have failed to meet NATO's defense-spending targets, content to shelter under the U.S. nuclear umbrella. Now, the same deference is playing out on the economic front, as the EU proves unable to marshal its collective weight in the face of Trump's pressure tactics. This military and economic dependency has created a structural imbalance that extends across defense, trade and energy, leaving Europe in a state of permanent vassalization. Trump's ability to extract sweeping economic concessions and defense-spending commitments shows how effectively the U.S. can weaponize Europe's security anxieties to pursue broader geopolitical objectives. The $600 billion investment pledge, much of it earmarked for military-equipment purchases, forces Europe to subsidize American defense contractors while undermining its own industrial base. By giving in to Trump's demands, the EU missed a rare opportunity to demonstrate that large markets cannot be bullied. Instead of setting a powerful precedent for other regions confronting U.S. economic pressure, it has validated Trump's transactional approach, emboldening not only future American administrations but also other global powers eager to turn trade into an instrument of geopolitical coercion. While the immediate crisis may have passed, the long-term damage to EU credibility and autonomy will be long-lasting. The widespread perception that Europe surrenders without resistance will undoubtedly invite further challenges to European interests. Rather than attempting to shift the blame to von der Leyen, EU member states must ask themselves whether avoiding a trade war was worth abandoning Europe's foundational commitment to multilateralism and forfeiting any credible path toward strategic autonomy. Until European leaders find the courage to break the cycle of dependency by empowering EU institutions to act decisively against external coercion, these humiliating capitulations will only multiply, reducing the continent to a prosperous yet powerless appendage of the American empire. Alberto Alemanno, professor of European Union law at HEC Paris and visiting professor at the College of Europe in Bruges and Natolin, is founder of The Good Lobby and the author of "Lobbying for Change: Find Your Voice to Create a Better Society" (Icon Books, 2017). © Project Syndicate, 2025
Nikkei Asia
an hour ago
- Nikkei Asia
Vietnam's VinFast opens 1st India plant, seeks local sourcing
Pham Sanh Chau, VinFast's Asia CEO, left, and Ashwin Patil, deputy CEO of VinFast India, unveil the newly launched VF 7 electric vehicle at India's five-day auto show in New Delhi on Jan. 18. © Reuters THOOTHUKUDI, India (Reuters) -- Vietnamese electric vehicle maker VinFast is in talks with several component manufacturers as it looks to source more from India, the company's Asia CEO said on Monday. The firm is in discussions with several of its current component suppliers, and some want to shift part of their production to an industrial park in India, VinFast Asia CEO Pham Sanh Chau told Reuters on the sidelines of the inauguration of its Indian plant in the southern city of Thoothukudi. Global manufacturers are increasingly looking to diversify their supply chains by shifting production to India, as rising geopolitical tensions, trade restrictions, and cost pressures make China less attractive as the sole manufacturing base. "We also have an inquiry from (a manufacturer in) Vietnam who would love to shift their plastic production to support our car," he added, though he did not provide names of companies considering the shift. VinFast plans to roll out cars to showrooms in India later this month, he said. The pricing and exact launch date have not yet been disclosed. Last year, VinFast and Tamil Nadu state agreed to work toward an investment of up to $2 billion, with an intended commitment of $500 million for the first five years. The plant is expected to have an annual production capacity of up to 150,000 vehicles. Chau also said the Indian plant had received orders from Sri Lanka, Nepal and Mauritius, and these initial overseas orders were positioning the India facility to become an export-oriented manufacturing hub, though the firm's immediate focus remained on meeting demand from Indian customers. VinFast has set a global delivery target of 200,000 cars for 2025, having sold about 72,100 units in the first half of the year, primarily in its home market.
