EU deal, China talks, Gaza aid and a Bezos-backed pick-up
The U.S. agrees a trade deal with the European Union. Meanwhile, top U.S. and Chinese economic officials resume tariff talks in Stockholm. Israel announces a halt in military operations for 10 hours a day in parts of Gaza and new aid corridors into the enclave. And the back-to-basics EV pick-up created with funding from Amazon founder Jeff Bezos.
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Reuters
10 minutes ago
- Reuters
German finance minister to push for steel quotas on Washington trip
BERLIN, Aug 4 (Reuters) - German Finance Minister Lars Klingbeil will advocate for a quota system on steel exports to be included in the EU's trade deal with the United States at a meeting with his U.S. counterpart, Scott Bessent, later on Monday, he told a radio broadcaster. "There is talk of a quota system for steel, and it would be good if there were one," Klingbeil told Deutschlandfunk radio on Monday before his planned meeting in Washington. There are a number of chapters that have not yet been finalised in the trade deal struck, said Klingbeil, and steel is a particularly important issue for the German economy and jobs. "I will test out what steps the American government is prepared to take and what the solution might look like," said Klingbeil, even though the EU is responsible for negotiations. The EU's trade deal with Trump in July was greeted with a mix of relief and anger, with tariffs set at 15% for most products but negotiations continuing for certain sectors, including steel and aluminium, which carry tariffs of 50%. German Chancellor Friedrich Merz had said on Friday the EU will negotiate with the United States on steel, with a focus on quotas that can be exported without too high tariffs. Klingbeil also urged quick clarification of other outstanding details in the trade dispute, including the investments promised by the EU and in the energy sector. "It should happen in the next few days," he said.
Scotsman
39 minutes ago
- Scotsman
Readers' Letters: Here's how John Swinney can dig himself out of a hole
A reader has thoughts on how John Swinney can help himself, and Scotland Sign up to our daily newsletter – Regular news stories and round-ups from around Scotland direct to your inbox Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... John Swinney is digging a lot of holes for himself these days, culminating in the protests at his Edinburgh Fringe interview by pro-Palestine protesters demanding a more forceful condemnation of Israel's actions in Gaza. He is paying the price for copying his predecessors playing at being world leaders instead of doing the job they were elected for. He may have found, however, a tightrope with which to pull himself out of the Indyref2 hole, if he succeeds in arguing down the planned motion to use a majority of list votes cast for pro-independence parties as a mandate for skipping Indyref2 and starting negotiations to leave the Union. Advertisement Hide Ad Advertisement Hide Ad That should be easy because for the past several years the vote share of anti-UK parties in council and Westminster by-elections has hovered around 30 per cent, peaking at 35 per cent (30 per cent for the SNP) in last year's general election. First Minister John Swinney appearing with comedian Susan Morrison at the Edinburgh Fringe - the event was disrupted five times by six different groups of protesters (Picture: Craig Paton/PA Wire) Winning an outright majority of seats is going to be a big ask, but forming a government might be possible because it is very possible that the pro-UK party vote will be split in favour of the SNP. In that scenario I suspect Mr Swinney will then look at the total percentage of votes cast for Scexit parties, decide to stay put and leave it to the new intake to sort out. Allan Sutherland, Stonehaven, Aberdeenshire Festival fatality? Has the left wing damaged the Edinburgh Festival irreparably? Last year it was the Baillie Gifford crisis and now the Scottish Government is having to bail out the book festival. This year it is the Palestinians and the hard left versus anyone associated with Israel that is the battleground, with Israel effectively being 'sent off' even before kick-off. The Scotsman front page (2 August) featured the smiling face of Miriam Margolyes, with the strapline regarding humour, political content and shocking language. Ms Margoyles has herself used shocking language against Israel to the extent of calls for her OBE to be removed. There appears to be no one left to take Israel's side. How can an arts festival be so biased. There are always two sides, or more, to the same story. This flies in the face of just what art is all about. Advertisement Hide Ad Advertisement Hide Ad Can the Edinburgh Festival survive constant controversy especially given the steep costs for performers and the public alike and even the Fringe's Best Joke competition being cancelled? Exit stage left? Gerald Edwards, Glasgow Sort cladding The SNP's progress in removing possible fatal cladding from residential properties would embarrass a snail (your report, 2 August). Only 0.2 per cent of the possibly 1,500 buildings concerned have had the work completed. Unless they begin to take this seriously, it could perhaps outdo the ferries fiasco. Or worse. Forget the meetings with the US President, Mr Swinney. Or your regular missives on Gaza. This is something over which you have total responsibility. The SNP walk straight into avoidable quagmires time after time after time. We must hope and pray there is no tragic ending to this instance. Alexander McKay, Edinburgh Going bananas A few days ago a correspondent referred to Scotland as something akin to 'becoming a banana republic'. This stuck with me when I read about the plight of children in England living in temporary accommodation with their families. There are 164,040 children in this sorry position, the highest number on record (in Scotland the figure is a little over 10,000). Child poverty is a scourge in the UK (particularly in England and Wales) at the moment and the Labour government could mitigate things if they introduced an equivalent to the Scottish Child Payment or were not joined at the hip to the Tories' two-child benefit cap. They could also initiate a wealth tax to be applied to billionaires/millionaires but Rachel Reeves has made her opposition to this crystal clear. Advertisement Hide Ad Advertisement Hide Ad I have no wish to indulge in point scoring on what is clearly a serious issue right across the UK, but surely the desperate situation south of the Border in terms of child poverty and children without permanent homes makes England much closer to a banana republic than Scotland! Alan Woodcock, Dundee Time to deliver Steve Witkoff, Donald Trump's Special Envoy, will visit Russia this week on the back of the President ordering two nuclear submarines to be 'repositioned' closer to Russia. This unprecedented situation came after former Russian President Dmitry Medvedev accused the President's trade ultimatums of taking 'a step towards war', potentially nuclear war. This war of words is not new but the action is. The timing of Trump's decision may not be accidental given Witkoff's pending meeting with Putin. Russia seems to have been taken by surprise, with no Kremlin response so far. Medvedev is known to be a close comrade of Putin, having yielded power to him; it is possible Putin may have endorsed or even authored his comments. Since Witkoff's last trip to Moscow in April the war with Ukraine has escalated. Trump has ramped up the rhetoric and his latest action may help persuade Putin he will follow through on threats of punitive sanctions on Russia and its trading partners. Witkoff, however, is the weak link. The billionaire has very little political experience and his negotiating strategy is based on real estate dealing. After multiple trips to Israel and Russia, talks have yielded little. Like President Biden's principal negotiator, Antony Blinken, Witkoff is Jewish, which will rankle with Gaza's leaders, especially with his habit of blaming only Hamas for the conflict and failure to find peace. He has been described as 'out of his depth' when negotiating with Putin, whom he considers honest, smart and a great guy. With Trump upping the pressure, Witkoff's rapprochement with Putin will be put to the test. More is at stake, and it's time he delivers. Neil Anderson, Edinburgh Write to The Scotsman Advertisement Hide Ad Advertisement Hide Ad
Reuters
40 minutes ago
- Reuters
Brexit's parallels with Trump tariffs tell a tale
LONDON, Aug 4 (Reuters) - In figuring out why the U.S. tariff shock hasn't sent the economy or financial world into a tailspin, Britain's exit from the European Union trade bloc provides something of a playbook - and without a particularly happy ending. Aside from vast differences in economic scale and global reach, the two episodes bear some comparison in how they upended years of deeply integrated free trade and possibly in how business, the economy at large and financial markets reacted. The 2016 Brexit referendum and Trump's tariffs this year were each widely billed as economic shocks that would send the financial world into paroxysms. They didn't, at least not at the outset. To be sure, both were followed by dramatic downward lurches in the two countries' respective currencies. But, to some extent, the steep drop in sterling after the referendum vote and the dollar's plunge on President Donald Trump's tariff plan this year helped offset some of the wider impact - at least on stock markets that are loaded with global firms with outsized foreign revenue. More broadly, however, the difficulty in isolating their immediate net impact means no "big bang" economic crisis unfolds to prove critics right - even if their enduring legacy turns out to be a slow burn of economic potential and lost output, often obscured by multiple other crosswinds. In Britain's case, the seismic effects of the COVID-19 pandemic distorted any attempt to easily assess Brexit when it actually happened. Tortuous negotiations with the EU meant the UK's departure eventually occurred on the eve of the health crisis in 2020 and the new trade rules did not come into force until a year later. But in the four years between the referendum surprise and the pandemic, the UK economy never entered a recession nor recorded a negative quarterly GDP print - confounding pro-EU supporters at the time and bolstering the Brexit lobby. Emerging from the twin hits, however, the economy has almost flatlined since. FTSE 100 stocks, helped by the weaker pound, kept pace with the S&P 500 (.SPX), opens new tab and world indexes for about a year after the referendum before chronic underperformance set in. Since 2018, the UK market has lagged MSCI's all-country index by some 35%. What's more, it's taken more than eight years for the pound's effective exchange rate to recover its pre-referendum levels. Few mainstream economists now doubt that Brexit has taken a serious toll on the UK economy - even if blame for that gets sprayed in multiple directions - and oceans of ink have been spilled trying to disentangle the precise impacts. One academic study, opens new tab by a number of Bank of England economists earlier this year concluded that uncertainty following the referendum resulted in little change in goods exports and imports before the exit was finalized. But after the new rules hit, UK imports fell 3% and overall exports fell 6.4%, largely because of the 13% hit in exports to the EU. While this slump seems relatively modest compared to the official forecasts of the longer-term hit, opens new tab, the pain has been borne disproportionately by small businesses. Additionally, these findings exclude the Brexit hit to services and London's finance sector, which registered a much bigger economic dent. And the cumulative damage to London and the service sector, opens new tab over the next 10 years continues to worry the City. The U.S. tariff story is of a completely different order, of course, as it will reverberate across the world economy. But there are some parallels, not least in certain aspects of the market reactions and the initial resilience. Economists estimate that the tariffs could lop anywhere from 0.5% to 1.0% off U.S. GDP over time. That's a $150-$300 billion hit, which, though painful, would not be an instant crisis for an economy that's growing at a roughly 2% annualized rate, where imported goods represent just 11% of GDP and where tech and AI trends are generating considerable tailwinds. But as former White House economic adviser Jason Furman pointed out in a New York Times essay last week, the tariff damage is likely not a one-off hit. The loss of 0.5% of GDP, he argued, is "the equivalent of every household in America taking around $1,000 and lighting it on fire - then doing it again every year. Forever." In the end, the main point of the British comparison is to show how extreme partisan arguments on the pros or cons of such giant economic policy changes don't necessarily get resolved cleanly in adaptive, hardy and hyper-complex modern economies. The upshot is there's rarely a big crash to prove a point. And that in itself is unnerving if politically-motivated policies then appear workable on the surface and resist instant pushback - only to act as a drain on the economy over a protracted period. Many observers reasonably argue that sovereign democratic politics should always trump economic conventions and even directions. But do people eventually notice when it goes wrong? The latest YouGov opinion poll, opens new tab shows 56% of Britons now think it was wrong to leave the EU - some nine years after their narrow vote to leave. The jury on Trump's tariffs is still out. The opinions expressed here are those of the author, a columnist for Reuters -- Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. Follow ROI on LinkedIn. Plus, sign up for my weekday newsletter, Morning Bid U.S.
