EU adopts new sanctions against Russia, Kallas says
FILE PHOTO: European Union High Representative for Foreign Affairs and Security Policy, Kaja Kallas, arrives to attend the UK-EU Summit at Lancaster House on May 19, 2025 in London, England. Carl Court/Pool via REUTERS/File Photo
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New Straits Times
2 hours ago
- New Straits Times
US trade war enters precarious 'Slow Grind' phase
US trade negotiations have transitioned from their opening act, with its many twists and turns, into a new, protracted chapter: the Slow Grind. It may be less turbulent than this past spring's drama, but no less worrying for investors. Now that the US and China have the framework for a trade agreement, attention may start to turn to the European Union, which appears next in line to strike a deal with the Trump administration. But the prospect of a swift resolution seems remote. Finding significant common ground to meaningfully reduce the EU's substantial goods surplus with the US, roughly US$200 billion annually, presents a formidable challenge, as major avenues appear blocked. The EU is highly unlikely to concede on agricultural market access given the region's strong and comprehensive policy for protecting local agriculture. Large-scale aircraft deals also seem improbable given the Airbus-Boeing rivalry. The contentious issue of pharmaceutical pricing will complicate any healthcare deals. While Europe could theoretically increase purchases of US defence equipment or relax "Buy European" policies in defence procurement, the political palatability of such moves is low. Consequently, the focus may inevitably shift towards the services sector, where the EU runs an approximately US$100 billion annual deficit with the US, driven largely by the operations of American technology giants. Here, a potential landing zone exists: the EU could conceivably ease some of its more burdensome technology regulations with limited immediate downside, offering a tangible, albeit partial, lever to address the overall trade imbalance. In fact, Section 899 in the Trump administration's proposed "One Big Beautiful Bill Act" — which threatens to increase taxes on entities from countries with "unfair foreign taxes" — appears to be aimed directly at digital taxes levied by EU countries on US technology companies. This suggests that this area could be a focal point in US-EU negotiations. US negotiations with the EU are also occurring against a markedly different backdrop than the one that prevailed in May during the earlier round of trade talks with China. Back then, the US was just emerging from a significant bout of financial market volatility and facing the risk of "empty shelves" if onerous tariffs on China remained in place, so both investors and business leaders were demanding urgent action. Importantly, EU exports to the US are predominantly industrial and luxury goods, not the daily consumables that directly impact the average American's pocketbook. Adding to this calmer backdrop, capital markets have shown signs of adapting to the current administration's seemingly unpredictable trade tactics. The S&P 500 index has rebounded 20 per cent since its post-Liberation Day low and is only around 2.0 per cent below its all-time high. One major risk, however, is that the US starts taking a harder line with Europe for fear of looking weak. Central to the US negotiation strategy is the perceived credibility of threats. Given the Trump administration's emphasis on the president's deal-making prowess, the US fundamentally cannot afford to be seen as backing down consistently, a scenario some critics have labelled "Trump Always Chickens Out" (TACO). Being perceived as unreliable with ultimatums would critically undermine the administration's negotiating power, not just with the EU, but globally. This need to maintain a credible hard line could add friction to the process, making concessions harder to make and progress slower to achieve. On the currency front, the euro may continue to appreciate against the US dollar — ending a more than decade-long trend of greenback strength — if wary European investors bring more capital back home. This could give the European Central Bank greater leeway to implement interest rate cuts, with less immediate concern about imported inflation. However, such euro strength has historically been negatively correlated with the performance of risk assets more broadly, adding another layer of complexity to the investment landscape. Further complicating the picture is the risk that the tentative deal just reached with China could unravel, reflecting the ongoing tug-of-war within the US administration between China hawks and pragmatists. The frenetic pace of the trade war's opening chapter has given way to a more arduous phase. This "Slow Grind" promises to generate more uncertainty, testing the patience of markets and policymakers alike, with progress likely measured in inches rather than miles.
New Straits Times
3 hours ago
- New Straits Times
Macron slams Trump's Greenland threats during landmark visit
NUUK: French President Emmanuel Macron on Sunday criticised US President Donald Trump's threats to annex Greenland, as he made a visit to the Danish autonomous territory. "That's not what allies do," Macron said as he arrived in Nuuk, Greenland's capital. Macron is the first foreign head of state to visit the vast territory – located at the crossroads of the Atlantic and the Arctic – since Trump's annexation threats. Trump, since returning to the White House in January, has repeatedly said America needs the strategically located, resource-rich island for security reasons, and has refused to rule out the use of force to secure it. Denmark has also repeatedly stressed that Greenland "is not for sale." Macron said his visit was aimed at conveying "France's and the European Union's solidarity" for "the sovereignty and territorial integrity" of Greenland. Danish Prime Minister Mette Frederiksen, Greenlandic Prime Minister Jens-Frederik Nielsen, and dozens of Greenlanders waving their territory's red-and-white flags, were on hand to greet the French president. Macron kicked off his six-hour visit with talks on board a Danish frigate with Frederiksen and Nielsen. He was to later visit a glacier to see firsthand the effects of global warming. A visit to a hydroelectric plant was initially scheduled but was cancelled at the last minute. Macron's trip to Greenland was "a signal in itself, made at the request of Danish and Greenlandic authorities", his office said ahead of the trip. The Danish invitation to Macron contrasts sharply with the reception granted to US Vice President JD Vance, whose one-day trip to Greenland in March was seen as a provocation by both Nuuk and Copenhagen. During his visit to the US Pituffik military base, Vance castigated Denmark for not having "done a good job by the people of Greenland", alleging they had neglected security. The Pituffik base is an essential part of Washington's missile defence infrastructure, its location putting it on the shortest route for missiles fired from Russia at the United States. Polls indicate that the vast majority of Greenland's 57,000 inhabitants want to become independent from Denmark – but do not wish to become part of the United States. Unlike Denmark, Greenland is not part of the European Union but is on the list of Overseas Territories associated with the bloc. The Arctic has gained geostrategic importance as the race for rare earths heats up and as melting ice caused by global warming opens up new shipping routes. Copenhagen in January announced a US$2 billion plan to boost its military presence in the Arctic region. Nato also plans to set up a Combined Air Operations Centre (CAOC) in Norway above the Arctic Circle, as Russia aims to bolster its military presence in the region. During his visit, Macron plans to discuss Arctic security and how to include the territory in "European action" to contribute to its development, while "respecting its sovereignty", his office said. Macron scheduled glacier visit was to Mount Nunatarsuaq, about 30 kilometres (19 miles) from Nuuk, to see firsthand the effects of global warming on the frontlines in the Arctic. The Arctic is warming four times faster than the rest of the planet, according to a 2022 study in scientific journal Nature, and Greenland's ice sheet melted 17 times faster than the historical average during a May 15-21 heatwave, a recent report showed. France intends to "massively reinvest in the knowledge of these ecosystems," following in the footsteps of famed French explorer Paul-Emile Victor who carried out multiple expeditions to Greenland, Macron's office said.
The Star
4 hours ago
- The Star
China's military conducts patrols in South China Sea, warns Philippines
FILE PHOTO: Chinese structures are pictured in Subi Reef in disputed South China Sea, April 21, 2017. - Photo: Reuters file BEIJING: China's military held joint sea and air patrols in the South China Sea on Saturday (June 14), a spokesperson for the People's Liberation Army's Southern Theater Command said. Spokesperson Tian Junli said in a statement on Sunday (June 15) that the Philippines has courted countries outside the region to organise "joint patrols" and "raised security risks" in the region. "The theater command forces remain on high alert, resolutely safeguarding China's national sovereignty and maritime rights," he said, adding that "all military activities that seek to stir up trouble in the South China Sea or create flashpoints are fully under control." The Philippine embassy in Beijing did not immediately respond to an emailed request for comment. The Philippines and the United States conducted joint maritime drills in the South China Sea for a seventh time earlier this month. Tensions have continued to run high between China and the Philippines over territorial disputes in the South China Sea, a conduit for more than US$3 trillion of annual ship-borne commerce. China claims almost the entire South China Sea, including parts claimed by Brunei, Indonesia, Malaysia, the Philippines and Vietnam. In 2016 the Permanent Court of Arbitration in the Hague ruled that China's claims were not supported by international law, a decision that Beijing rejects. - Reuters
