Swiss President, Economy Minister Head to Washington in Bid to Lower Tariffs
The 39 percent levy, announced on July 31, is set to take effect on Thursday and would mean Swiss companies face one of the steepest export duties. Only Laos, Burma (also known as Myanmar), and Syria have higher rates, at 40 and 41 percent, respectively (3 countries but only two rates stated?). The 27-member European Union has tariffs of 15 percent. The UK negotiated 10 percent tariffs.
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Yahoo
an hour ago
- Yahoo
Trump tariffs live updates: Trump says pharma tariffs could go to 250%, threatens EU if it fails on investment pledge
President Trump on Tuesday said he would announce tariffs on semiconductor and pharmaceutical imports "within the next week or so," as he prepares to add more sectoral duties to his mix of tariffs. "We'll be putting a initially small tariff on pharmaceuticals, but in one year — one and a half years, maximum — it's going to go to 150%. And then it's going to go to 250%, because we want pharmaceuticals made in our country," Trump said during a CNBC interview. Trump also threatened the European Union with increased tariffs if it failed to live up to a pledge to invest some $600 billion in the US. Meanwhile, the world is awaiting Trump's country-specific duties and jockeying ahead of their implementation. India has called out Trump after he threatened to "substantially raise" tariffs on Indian exports over its Russian oil purchases, slamming the move as unjustified. India said it would protect its interest and accused the US of a double standard on trade with Russia. Trump has signed an order to hike tariffs on Canada to 35%, while setting rates from 10% to 40% on dozens of partners. Those duties are set to come into full effect this week. Yahoo Finance's Ben Werschkul has more details on the latest orders. You can see the new rates Trump is set to levy in the graphic below: In the past several days, Trump has unleashed a flurry of deals and trade moves leading up to his self-imposed deadline: Trump granted Mexico, the US's largest trading partner, a 90-day reprieve on higher tariffs. The US agreed to a trade deal with South Korea. The agreement includes a 15% tariff rate on imports from the country, while the US will not be charged a tariff on its exports, Trump said. Trump imposed 50% tariffs on semi-finished copper products starting Aug. 1. The president signed an order to end the de minimis exemption on low-value imports under $800, thereby applying tariffs from Aug. 29. Trump signed another order to impose a total of 50% tariffs on many goods from Brazil. However, it exempts key US imports like orange juice and aircraft parts that benefit Embraer (ERJ). The US and EU agreed to a trade deal that imposes 15% tariffs on EU goods. The nations are still working on finalizing many terms of the deal. Read more: What Trump's tariffs mean for the economy and your wallet Here are the latest updates as the policy reverberates around the world. EU continues to press for tariff exemption on wine, spirits as part of US deal The EU is pushing for its wine and spirit exports to be exempt from US tariffs, while both sides work towards refining the deal they agreed last month. The WSJ reports: Read more here. Countries push for last-minute deals as Thursday tariff deadline looms Global importers are bracing for President Trump's next tariff deadline on Thursday morning, when the president's tiered approach to tariffs is expected to take effect. Yet some of the details around trade agreements remain fuzzy. Yahoo Finance's Ben Werschkul reports: Read more here. Trump's copper tariffs apply to $15B of products so far President Trump's copper (HG=F) tariffs are due to hit imports valued at more than $15B in 2024, highlighting the potential inflationary impact on American manufacturers. Trump's unveiling of 50% import duties rattled the global copper market last week, because the US president provided a surprise exemption to key forms of wiring metal. But it still leaves significant trade volumes subject to tariffs. Bloomberg News reports: Read more here. Trump threatens EU with increased tariffs if it doesn't meet investment pledge President Trump threatened to hike tariffs on the European Union back to 35% if the bloc fails to live up to a pledge to invest some $600 billion in the US. "A couple of countries came [and said], 'How come the EU is paying less than us?' And I said well, because they gave me $600 billion," Trump said during a CNBC interview. "And that's a gift, that's not like, you know, a loan," he said, claiming that the terms allow the US to direct where the EU invests. Trump says pharma duties could go to 250% President Trump said he would announce tariffs on semiconductor and pharmaceutical imports "within the next week or so." "We'll be putting a initially small tariff on pharmaceuticals, but in one year — one and a half years, maximum — it's going to go to 150%. And then it's going to go to 250%, because we want pharmaceuticals made in our country," Trump said during a CNBC interview. He said semiconductor and chip tariffs would be in a "different category." US tariff on EU goods set at flat 15% The EU said on Tuesday that European Union goods entering the US face a flat 15% tariff, including cars and car parts. The rate includes the Most Favoured Nation (MFN) tariff and won't exceed 15% even if the US raises tariffs on items like semiconductors and medicines. The EU said it still expects turbulence in its trade dealings with the US. Reuters reports: Read more here. India hits back at Trump's tariff threat India has called out President Trump after he threatened to "substantially raise" tariffs on Indian exports over its Russian oil purchases, slamming the move as unjustified. New Delhi said it would take all necessary steps to protect its economic interests. Bloomberg News reports: Read more here. Nvidia partner Hon Hai's July sales growth weakened by tariffs Nvidia's (NVDA) main server assembly partner Hon Hai Precision ( reported a sales slowdown for July due to US tariffs. Bloomberg News reports: Read more here. Mazda forecasts nearly $1B profit hit from US tariffs Reuters reports: Read more here. Diageo warns of $200M tariff hit Diageo (DEO) warned of a $200 million impact from tariffs on Tuesday and forecast flat full-year sales, after a periof of demand, share price turbulence and a sudden CEO exit. Reuters reports: Read more here. Trump administration posts guidance on tariff rollout Bloomberg News reports: Read more here. Rolex, luxury watchmakers brace for Trump's tariffs on Swiss imports Yahoo Finance's Pras Subramanian reports: Read more here. Trump says he will 'substantially' raise tariffs on India President Trump said on Monday he will "substantially" raise tariffs on India. Stocks still remained in rally mode following Friday's sell-off. "India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits," wrote Trump on Monday morning. "They don't care how many people in Ukraine are being killed by the Russian War Machine. Because of this, I will be substantially raising the Tariff paid by India to the USA," he added. President Trump's sweeping tariffs are set to come into full effect later this week. Last week, Trump announced a 25% tariff on goods from India, plus an additional import tax because of the country's purchasing of Russian oil. Swiss prepare 'more attractive offer' to US to avert 39% tariff Bloomberg reports: Read more here. EU to suspend US tariff countermeasures for 6 months The European Union announced on Monday that it would suspend its two packages of US tariff countermeasures for 6 months. This follows the trade deal the US and EU reached last week Sunday. Reuters reports: Read more here. Swiss gold trading takes spotlight in trade talks with Trump President Trump's tariffs on Switzerland were prompted by the country being the world's largest hub for gold refining. Gold flows in from places like South America, Africa and gets processed in Switzerland and then exported to countries like the US. This gold trade makes Switzerland's exports to the US look large and the refiners don't get to keep most of the profits. Bloomberg News: Read more here. Greer says US-China talks 'about halfway there' on rare earths US Trade Representative Jamieson Greer said on Sunday that rare earths were a key focus in last week's Stockholm talks. He told CBS the US had secured supply commitments from China but noted the two sides are "about halfway there." Bloomberg News reports: Read more here. Swatch CEO calls on Swiss president to meet Trump to solve tariff dispute Swiss stocks took a hit on Monday as the market reopened after a holiday. Worries about the impact of President Trump's 39% export tariffs and a push for drugmakers to lower prices have caused tension in the market. In addition, Swatch Group ( Chief Executive Nick Hayek called on Swiss President Karin Keller-Sutter to meet President Trump in Washington to negotiate a better deal than the 39% tariffs announced on Swiss imports into the United States. Hayek told Reuters on Monday he was confident an agreement could still be reached before the tariffs, which were announced on Friday, went into effect on Aug. 7. Bloomberg News reports: Read more here. Malaysia agrees to boost tech, LNG purchases from US as part of trade deal Reuters reports: Read more here. Trump presses India, China to halt Russian oil buys as trade talks roll on The US and China are making progress on a trade deal, but a major sticking point remains: Washington wants Beijing to stop buying oil from Iran and Russia. China has pushed back, saying it will secure energy based on its own national interests. 'China will always ensure its energy supply in ways that serve our national interests,' China's Foreign Ministry posted on X on Wednesday following two days of trade negotiations in Stockholm, responding to the U.S. threat of a 100% tariff. 'Coercion and pressuring will not achieve anything. China will firmly defend its sovereignty, security and development interests," the ministry said. In India, Prime Minister Narendra Modi has rejected pressure from President Trump, encouraging people to buy local goods. India has not told its oil refiners to stop purchasing Russian oil, and those decisions remain up to each company. 'The world economy is going through many apprehensions — there is an atmosphere of instability,' Modi said at a rally in the northern state of Uttar Pradesh on Saturday. 'Now, whatever we buy, there should be only one scale: we will buy those things which have been made by the sweat of an Indian.' EU continues to press for tariff exemption on wine, spirits as part of US deal The EU is pushing for its wine and spirit exports to be exempt from US tariffs, while both sides work towards refining the deal they agreed last month. The WSJ reports: Read more here. The EU is pushing for its wine and spirit exports to be exempt from US tariffs, while both sides work towards refining the deal they agreed last month. The WSJ reports: Read more here. Countries push for last-minute deals as Thursday tariff deadline looms Global importers are bracing for President Trump's next tariff deadline on Thursday morning, when the president's tiered approach to tariffs is expected to take effect. Yet some of the details around trade agreements remain fuzzy. Yahoo Finance's Ben Werschkul reports: Read more here. Global importers are bracing for President Trump's next tariff deadline on Thursday morning, when the president's tiered approach to tariffs is expected to take effect. Yet some of the details around trade agreements remain fuzzy. Yahoo Finance's Ben Werschkul reports: Read more here. Trump's copper tariffs apply to $15B of products so far President Trump's copper (HG=F) tariffs are due to hit imports valued at more than $15B in 2024, highlighting the potential inflationary impact on American manufacturers. Trump's unveiling of 50% import duties rattled the global copper market last week, because the US president provided a surprise exemption to key forms of wiring metal. But it still leaves significant trade volumes subject to tariffs. Bloomberg News reports: Read more here. President Trump's copper (HG=F) tariffs are due to hit imports valued at more than $15B in 2024, highlighting the potential inflationary impact on American manufacturers. Trump's unveiling of 50% import duties rattled the global copper market last week, because the US president provided a surprise exemption to key forms of wiring metal. But it still leaves significant trade volumes subject to tariffs. Bloomberg News reports: Read more here. Trump threatens EU with increased tariffs if it doesn't meet investment pledge President Trump threatened to hike tariffs on the European Union back to 35% if the bloc fails to live up to a pledge to invest some $600 billion in the US. "A couple of countries came [and said], 'How come the EU is paying less than us?' And I said well, because they gave me $600 billion," Trump said during a CNBC interview. "And that's a gift, that's not like, you know, a loan," he said, claiming that the terms allow the US to direct where the EU invests. President Trump threatened to hike tariffs on the European Union back to 35% if the bloc fails to live up to a pledge to invest some $600 billion in the US. "A couple of countries came [and said], 'How come the EU is paying less than us?' And I said well, because they gave me $600 billion," Trump said during a CNBC interview. "And that's a gift, that's not like, you know, a loan," he said, claiming that the terms allow the US to direct where the EU invests. Trump says pharma duties could go to 250% President Trump said he would announce tariffs on semiconductor and pharmaceutical imports "within the next week or so." "We'll be putting a initially small tariff on pharmaceuticals, but in one year — one and a half years, maximum — it's going to go to 150%. And then it's going to go to 250%, because we want pharmaceuticals made in our country," Trump said during a CNBC interview. He said semiconductor and chip tariffs would be in a "different category." President Trump said he would announce tariffs on semiconductor and pharmaceutical imports "within the next week or so." "We'll be putting a initially small tariff on pharmaceuticals, but in one year — one and a half years, maximum — it's going to go to 150%. And then it's going to go to 250%, because we want pharmaceuticals made in our country," Trump said during a CNBC interview. He said semiconductor and chip tariffs would be in a "different category." US tariff on EU goods set at flat 15% The EU said on Tuesday that European Union goods entering the US face a flat 15% tariff, including cars and car parts. The rate includes the Most Favoured Nation (MFN) tariff and won't exceed 15% even if the US raises tariffs on items like semiconductors and medicines. The EU said it still expects turbulence in its trade dealings with the US. Reuters reports: Read more here. The EU said on Tuesday that European Union goods entering the US face a flat 15% tariff, including cars and car parts. The rate includes the Most Favoured Nation (MFN) tariff and won't exceed 15% even if the US raises tariffs on items like semiconductors and medicines. The EU said it still expects turbulence in its trade dealings with the US. Reuters reports: Read more here. India hits back at Trump's tariff threat India has called out President Trump after he threatened to "substantially raise" tariffs on Indian exports over its Russian oil purchases, slamming the move as unjustified. New Delhi said it would take all necessary steps to protect its economic interests. Bloomberg News reports: Read more here. India has called out President Trump after he threatened to "substantially raise" tariffs on Indian exports over its Russian oil purchases, slamming the move as unjustified. New Delhi said it would take all necessary steps to protect its economic interests. Bloomberg News reports: Read more here. Nvidia partner Hon Hai's July sales growth weakened by tariffs Nvidia's (NVDA) main server assembly partner Hon Hai Precision ( reported a sales slowdown for July due to US tariffs. Bloomberg News reports: Read more here. Nvidia's (NVDA) main server assembly partner Hon Hai Precision ( reported a sales slowdown for July due to US tariffs. Bloomberg News reports: Read more here. Mazda forecasts nearly $1B profit hit from US tariffs Reuters reports: Read more here. Reuters reports: Read more here. Diageo warns of $200M tariff hit Diageo (DEO) warned of a $200 million impact from tariffs on Tuesday and forecast flat full-year sales, after a periof of demand, share price turbulence and a sudden CEO exit. Reuters reports: Read more here. Diageo (DEO) warned of a $200 million impact from tariffs on Tuesday and forecast flat full-year sales, after a periof of demand, share price turbulence and a sudden CEO exit. Reuters reports: Read more here. Trump administration posts guidance on tariff rollout Bloomberg News reports: Read more here. Bloomberg News reports: Read more here. Rolex, luxury watchmakers brace for Trump's tariffs on Swiss imports Yahoo Finance's Pras Subramanian reports: Read more here. Yahoo Finance's Pras Subramanian reports: Read more here. Trump says he will 'substantially' raise tariffs on India President Trump said on Monday he will "substantially" raise tariffs on India. Stocks still remained in rally mode following Friday's sell-off. "India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits," wrote Trump on Monday morning. "They don't care how many people in Ukraine are being killed by the Russian War Machine. Because of this, I will be substantially raising the Tariff paid by India to the USA," he added. President Trump's sweeping tariffs are set to come into full effect later this week. Last week, Trump announced a 25% tariff on goods from India, plus an additional import tax because of the country's purchasing of Russian oil. President Trump said on Monday he will "substantially" raise tariffs on India. Stocks still remained in rally mode following Friday's sell-off. "India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits," wrote Trump on Monday morning. "They don't care how many people in Ukraine are being killed by the Russian War Machine. Because of this, I will be substantially raising the Tariff paid by India to the USA," he added. President Trump's sweeping tariffs are set to come into full effect later this week. Last week, Trump announced a 25% tariff on goods from India, plus an additional import tax because of the country's purchasing of Russian oil. Swiss prepare 'more attractive offer' to US to avert 39% tariff Bloomberg reports: Read more here. Bloomberg reports: Read more here. EU to suspend US tariff countermeasures for 6 months The European Union announced on Monday that it would suspend its two packages of US tariff countermeasures for 6 months. This follows the trade deal the US and EU reached last week Sunday. Reuters reports: Read more here. The European Union announced on Monday that it would suspend its two packages of US tariff countermeasures for 6 months. This follows the trade deal the US and EU reached last week Sunday. Reuters reports: Read more here. Swiss gold trading takes spotlight in trade talks with Trump President Trump's tariffs on Switzerland were prompted by the country being the world's largest hub for gold refining. Gold flows in from places like South America, Africa and gets processed in Switzerland and then exported to countries like the US. This gold trade makes Switzerland's exports to the US look large and the refiners don't get to keep most of the profits. Bloomberg News: Read more here. President Trump's tariffs on Switzerland were prompted by the country being the world's largest hub for gold refining. Gold flows in from places like South America, Africa and gets processed in Switzerland and then exported to countries like the US. This gold trade makes Switzerland's exports to the US look large and the refiners don't get to keep most of the profits. Bloomberg News: Read more here. Greer says US-China talks 'about halfway there' on rare earths US Trade Representative Jamieson Greer said on Sunday that rare earths were a key focus in last week's Stockholm talks. He told CBS the US had secured supply commitments from China but noted the two sides are "about halfway there." Bloomberg News reports: Read more here. US Trade Representative Jamieson Greer said on Sunday that rare earths were a key focus in last week's Stockholm talks. He told CBS the US had secured supply commitments from China but noted the two sides are "about halfway there." Bloomberg News reports: Read more here. Swatch CEO calls on Swiss president to meet Trump to solve tariff dispute Swiss stocks took a hit on Monday as the market reopened after a holiday. Worries about the impact of President Trump's 39% export tariffs and a push for drugmakers to lower prices have caused tension in the market. In addition, Swatch Group ( Chief Executive Nick Hayek called on Swiss President Karin Keller-Sutter to meet President Trump in Washington to negotiate a better deal than the 39% tariffs announced on Swiss imports into the United States. Hayek told Reuters on Monday he was confident an agreement could still be reached before the tariffs, which were announced on Friday, went into effect on Aug. 7. Bloomberg News reports: Read more here. Swiss stocks took a hit on Monday as the market reopened after a holiday. Worries about the impact of President Trump's 39% export tariffs and a push for drugmakers to lower prices have caused tension in the market. In addition, Swatch Group ( Chief Executive Nick Hayek called on Swiss President Karin Keller-Sutter to meet President Trump in Washington to negotiate a better deal than the 39% tariffs announced on Swiss imports into the United States. Hayek told Reuters on Monday he was confident an agreement could still be reached before the tariffs, which were announced on Friday, went into effect on Aug. 7. Bloomberg News reports: Read more here. Malaysia agrees to boost tech, LNG purchases from US as part of trade deal Reuters reports: Read more here. Reuters reports: Read more here. Trump presses India, China to halt Russian oil buys as trade talks roll on The US and China are making progress on a trade deal, but a major sticking point remains: Washington wants Beijing to stop buying oil from Iran and Russia. China has pushed back, saying it will secure energy based on its own national interests. 'China will always ensure its energy supply in ways that serve our national interests,' China's Foreign Ministry posted on X on Wednesday following two days of trade negotiations in Stockholm, responding to the U.S. threat of a 100% tariff. 'Coercion and pressuring will not achieve anything. China will firmly defend its sovereignty, security and development interests," the ministry said. In India, Prime Minister Narendra Modi has rejected pressure from President Trump, encouraging people to buy local goods. India has not told its oil refiners to stop purchasing Russian oil, and those decisions remain up to each company. 'The world economy is going through many apprehensions — there is an atmosphere of instability,' Modi said at a rally in the northern state of Uttar Pradesh on Saturday. 'Now, whatever we buy, there should be only one scale: we will buy those things which have been made by the sweat of an Indian.' The US and China are making progress on a trade deal, but a major sticking point remains: Washington wants Beijing to stop buying oil from Iran and Russia. China has pushed back, saying it will secure energy based on its own national interests. 'China will always ensure its energy supply in ways that serve our national interests,' China's Foreign Ministry posted on X on Wednesday following two days of trade negotiations in Stockholm, responding to the U.S. threat of a 100% tariff. 'Coercion and pressuring will not achieve anything. China will firmly defend its sovereignty, security and development interests," the ministry said. In India, Prime Minister Narendra Modi has rejected pressure from President Trump, encouraging people to buy local goods. India has not told its oil refiners to stop purchasing Russian oil, and those decisions remain up to each company. 'The world economy is going through many apprehensions — there is an atmosphere of instability,' Modi said at a rally in the northern state of Uttar Pradesh on Saturday. 'Now, whatever we buy, there should be only one scale: we will buy those things which have been made by the sweat of an Indian.'
TechCrunch
an hour ago
- TechCrunch
The EU AI Act aims to create a level playing field for AI innovation. Here's what it is.
The European Union's Artificial Intelligence Act, known as the EU AI Act, has been described by the European Commission as 'the world's first comprehensive AI law.' After years in the making, it is progressively becoming a part of reality for the 450 million people living in the 27 countries that comprise the EU. The EU AI Act, however, is more than a European affair. It applies to companies both local and foreign, and it can affect both providers and deployers of AI systems; the European Commission cites examples of how it would apply to a developer of a CV screening tool, and to a bank that buys that tool. Now, all of these parties have a legal framework that sets the stage for their use of AI. Why does the EU AI Act exist? As usual with EU legislation, the EU AI Act exists to make sure there is a uniform legal framework applying to a certain topic across EU countries — the topic this time being AI. Now that the regulation is in place, it should 'ensure the free movement, cross-border, of AI-based goods and services' without diverging local restrictions. With timely regulation, the EU seeks to create a level playing field across the region and foster trust, which could also create opportunities for emerging companies. However, the common framework that it has adopted is not exactly permissive: Despite the relatively early stage of widespread AI adoption in most sectors, the EU AI Act sets a high bar for what AI should and shouldn't do for society more broadly. What is the purpose of the EU AI Act? According to European lawmakers, the framework's main goal is to 'promote the uptake of human centric and trustworthy AI while ensuring a high level of protection of health, safety, fundamental rights as enshrined in the Charter of Fundamental Rights of the European Union, including democracy, the rule of law and environmental protection, to protect against the harmful effects of AI systems in the Union, and to support innovation.' Yes, that's quite a mouthful, but it's worth parsing carefully. First, because a lot will depend on how you define 'human centric' and 'trustworthy' AI. And second, because it gives a good sense of the precarious balance to maintain between diverging goals: innovation vs. harm prevention, as well as uptake of AI vs. environmental protection. As usual with EU legislation, again, the devil will be in the details. How does the EU AI Act balance its different goals? To balance harm prevention against the potential benefits of AI, the EU AI Act adopted a risk-based approach: banning a handful of 'unacceptable risk' use cases; flagging a set of 'high-risk' uses calling for tight regulation; and applying lighter obligations to 'limited risk' scenarios. Techcrunch event Tech and VC heavyweights join the Disrupt 2025 agenda Netflix, ElevenLabs, Wayve, Sequoia Capital — just a few of the heavy hitters joining the Disrupt 2025 agenda. They're here to deliver the insights that fuel startup growth and sharpen your edge. Don't miss the 20th anniversary of TechCrunch Disrupt, and a chance to learn from the top voices in tech — grab your ticket now and save up to $675 before prices rise on August 7. Tech and VC heavyweights join the Disrupt 2025 agenda Netflix, ElevenLabs, Wayve, Sequoia Capital — just a few of the heavy hitters joining the Disrupt 2025 agenda. They're here to deliver the insights that fuel startup growth and sharpen your edge. Don't miss the 20th anniversary of TechCrunch Disrupt, and a chance to learn from the top voices in tech — grab your ticket now and save up to $675 before prices rise. San Francisco | REGISTER NOW Has the EU AI Act come into effect? Yes and no. The EU AI Act rollout started on August 1, 2024, but it will only come into force through a series of staggered compliance deadlines. In most cases, it will also apply sooner to new entrants than to companies that already offer AI products and services in the EU. The first deadline came into effect on February 2, 2025, and focused on enforcing bans on a small number of prohibited uses of AI, such as untargeted scraping of internet or CCTV for facial images to build up or expand databases. Many others will follow, but unless the schedule changes, most provisions will apply by mid-2026. What changed on August 2, 2025? Since August 2, 2025, the EU AI Act applies to 'general-purpose AI models with systemic risk.' GPAI models are AI models trained with a large amount of data, and that can be used for a wide range of tasks. That's where the risk element comes in. According to the EU AI Act, GPAI models can come with systemic risks; 'for example, through the lowering of barriers for chemical or biological weapons development, or unintended issues of control over autonomous [GPAI] models.' Ahead of the deadline, the EU published guidelines for providers of GPAI models, which include both European companies and non-European players such as Anthropic, Google, Meta, and OpenAI. But since these companies already have models on the market, they will also have until August 2, 2027, to comply, unlike new entrants. Does the EU AI Act have teeth? The EU AI Act comes with penalties that lawmakers wanted to be simultaneously 'effective, proportionate and dissuasive' — even for large global players. Details will be laid down by EU countries, but the regulation sets out the overall spirit — that penalties will vary depending on the deemed risk level — as well as thresholds for each level. Infringement on prohibited AI applications leads to the highest penalty of 'up to €35 million or 7% of the total worldwide annual turnover of the preceding financial year (whichever is higher).' The European Commission can also inflict fines of up to €15 million or 3% of annual turnover on providers of GPAI models. How fast do existing players intend to comply? The voluntary GPAI code of practice, including commitments such as not training models on pirated content, is a good indicator of how companies may engage with the framework law until forced to do so. In July 2025, Meta announced it wouldn't sign the voluntary GPAI code of practice meant to help such providers comply with the EU AI Act. However, Google soon after confirmed it would sign, despite reservations. Signatories so far include Aleph Alpha, Amazon, Anthropic, Cohere, Google, IBM, Microsoft, Mistral AI, and OpenAI, among others. But as we have seen with Google's example, signing does not equal a full-on endorsement. Why have (some) tech companies been fighting these rules? While stating in a blog post that Google would sign the voluntary GPAI code of practice, its president of global affairs, Kent Walker, still had reservations. 'We remain concerned that the AI Act and Code risk slowing Europe's development and deployment of AI,' he wrote. Meta was more radical, with its chief global affairs officer Joel Kaplan stating in a post on LinkedIn that 'Europe is heading down the wrong path on AI.' Calling the EU's implementation of the AI Act 'overreach,' he stated that the code of practice 'introduces a number of legal uncertainties for model developers, as well as measures which go far beyond the scope of the AI Act.' European companies have expressed concerns as well. Arthur Mensch, the CEO of French AI champion Mistral AI, was part of a group of European CEOs who signed an open letter in July 2025 urging Brussels to 'stop the clock' for two years before key obligations of the EU AI Act came into force. Will the schedule change? In early July 2025, the European Union responded negatively to lobbying efforts calling for a pause, saying it would still stick to its timeline for implementing the EU AI Act. It went ahead with the August 2, 2025, deadline as planned, and we will update this story if anything changes.
Business of Fashion
2 hours ago
- Business of Fashion
Swiss Watch Giant Navigates Trump's Tariff Uncertainty
Swiss watchmaker Swatch Group's chief executive Nick Hayek has a tariff problem. And the clock is ticking. US President Donald Trump unleashed a 39 percent tariff on most Swiss-made products last week, which will come into effect on Thursday. The country - known for its luxury timepieces, chocolate and secretive banks - is racing to gain a reprieve. Trump's tariffs - aimed, he says, at erasing global trade imbalances - have rattled companies around the world and sparked scrambles to shift supply chains and sales channels by many brands - few more recognizable than Swatch, which became famous for its plastic watches. The United States is the largest export market for Swiss watches. Shares in Swiss watch and luxury firms, including Swatch, slid nearly 5 percent on Monday on news of the tariffs before paring back losses. Swatch Group - the biggest Swiss watchmaker by sales volume - is trying to adapt, Hayek told Reuters. The company has front-loaded shipments to the United States, is tapping US shoppers as they travel abroad, and has also raised its prices. Part of the challenge for the industry is that Swiss watches need to be 60 percent made in the country, making it hard to shift production elsewhere. 'We produce everything in Switzerland, not in China. And we have a high cost. And when you add a 39 percent tariff, we cannot absorb that. So prices will go up for sure,' Hayek said on Monday, without giving specifics on the potential rise. Swatch Group, which also owns Swiss luxury watch brands such as Omega, Tissot and Longines, already raised prices by 5 percent following Trump's first tariff announcement in April. Hayek explained that the firm had started to ship extra inventory to the United States earlier in the year when Trump's initial salvo of global tariffs hit. Swiss watchmakers more broadly saw a spike in exports in April, trade data show. 'We shipped much more products to the United States, so this means there is not an immediate impact on us,' he said, adding that Swatch has at least three to six months of US stock in warehouses and stores, giving a short-term buffer from tariffs. The firm plans to ship 'a little bit more' inventory over the next few days before the tariffs take effect. Hayek said demand for its watches remained strong in the United States, for now. Jean-Philippe Bertschy, an analyst at Bank Vontobel, a Zurich-based private bank, said higher inventory levels built up by watchmakers would give them breathing space only for the short term. Super premium watches could more easily pass on extra costs than mid-market and entry level ones, he said. 'The industry will be hoping and praying that the tariffs can be negotiated down to something like the 15 percent that Europe has,' Bertschy said. 'If the 39 percent tariff remained, it would be devastating for the industry.' The watchmaking industry is Switzerland's third-largest export sector, behind chemicals and pharmaceuticals, and sales of machinery. It made up 9 percent of Swiss exports in 2024. Swatch Group is the third-biggest Swiss watchmaker by revenue, after Rolex and Richemont, which makes IWC, Jaeger-LeCoultre and Cartier watches. For watchmakers, a silver lining was the flexibility of sales channels for their portable products, which meant Swatch could target US shoppers while they are overseas in tourist hot spots. 'Customers are mobile,' Hayek said. When China imposed luxury taxes, that simply drove Chinese consumers to shop in Macau and Hong Kong, he said. 'There are many possibilities for Americans. They travel all over the world,' said Hayek, pointing to options like shops aboard cruise ships. 'They continue to buy even if you have to increase the prices in the United States.' 'What Counts Is What Trump Is Saying' Nonetheless, Swatch is keen for the Swiss government to quickly strike a deal to avert the threatened 39 percent tariff. Hayek called on Swiss President Karin Keller-Sutter to travel quickly to the United States to resolve the issue. The tariff rate - one of the highest tariffs globally - could hit other Swiss luxury brands such as Rolex and Patek Philippe. 'The 'Swiss-made' label is part of our DNA. The history and expertise of our industry are unique worldwide,' Yves Bugmann, president of the Federation of the Swiss Watch Industry, said. 'It is therefore inconceivable to abandon or dilute the label.' The United States is the biggest foreign market for Swiss watches overall, accounting for 16.8 percent of exports worth about 4.4 billion Swiss francs ($5.44 billion), federation data show. Bugmann said that the Swiss watchmaking sector had been investing in training in the United States as well as retail networks and services, adding the tariffs marked a 'serious blow' that would indirectly hurt the US economy. Underscoring the volatile outlook, Georges Mari, co-owner of Zurich-based investment firm Rossier, Mari & Associates, which holds shares in Swatch, said it is 'impossible' to forecast the impact on the industry. 'Tariffs can change at any moment due to the unpredictability of the Trump administration,' Mari said. The US market generated 18 percent of Swatch Group's sales in 2024, according to broker Jefferies. Switzerland's government said it was ready to make a 'more attractive offer' in trade talks with Washington, after it held an extraordinary cabinet meeting on Monday to discuss its response to the tariff. Swatch Group CEO Hayek said it wasn't yet 'doomsday' and hoped an agreement could be struck - though that was very much in the hands of the US president. 'What counts on the US side is what Mr. Trump is saying,' he said. 'Nobody else.' By John Revill, Helen Reid; Editors: Kirsten Donovan, Adam Jourdan and Joe Bavier Learn more: Swiss Luxury Watchmakers' Shares Drop After Trump Tariff Shock The sector is already under pressure from a stronger franc and falling global demand.
