Morning Bid: Market focus shifts to Trump tariff countdown
U.S. investors may have been feeling good going into the long Independence Day weekend, but those vibes failed to carry through to Asia.
Optimism over the resilience of the U.S. economy, after much more robust than expected monthly payrolls figures, has been quickly overshadowed by a cloud of uncertainty as U.S. President Donald Trump's deadline for higher tariff rates looms on July 9.
Despite initial confidence from Trump and his team that there would be a flurry of deals, an agreement with Vietnam announced on Wednesday takes the total so far to just three, including framework agreements with Britain and China.
Trump's approach on tariffs has shifted accordingly: He said letters will start going out to trading partners on Friday with the duties they will pay on trade with the United States.
Treasury Secretary Scott Bessent has said a deal with India is close, but talks with Japan and South Korea - which had been touted as likely early successes - have been stalled for weeks.
The deal with Vietnam also risks irking China, with its stipulation of 40% levies on so-called trans-shipments of products basically made elsewhere (i.e., China) in order to receive a "Made in Vietnam" sticker.
Some Asian countries may be hoping they've done enough to address U.S. concerns, and will receive just the baseline 10% tariff in their letters. Thailand, for example, said today it "hopes there will be good news" following trade talks with Washington.
The EU is pushing for an "agreement in principle" ahead of July 9 but, as might be expected from such a sprawling economic bloc, pleasing all parties will be difficult. Brussels is bracing for any outcome, including a return to tit-for-tat tariff escalation.
One point on which European diplomats seem aligned is that tariff relief needs to be immediate, or any deal is off.
Traders and investors also need to mull the broad and long-term impact of Trump's sweeping tax-cut bill, now about to become law, and its potential to swell the deficit by $3.4 trillion by some estimates.
Global equities, led by Wall Street, may be trading at all-time peaks, but that could mean there's plenty of room for a drop back to earth if Trump's trade war turns ugly again.
Key developments that could influence markets on Friday:
- U.S. Independence Day holiday
- Germany industrial orders (May)
- France, Italy, Spain industrial output (all May)
- Germany, France, Italy construction PMIs (all June)
Trying to keep up with the latest tariff news?
Our new daily news digest offers a rundown of the top market-moving headlines impacting global trade. Sign up for Tariff Watch here.
(By Kevin Buckland; Editing by Edmund Klamann)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Associated Press
13 minutes ago
- Associated Press
China imposes anti-dumping duties on European brandy as trade tensions rise
BEIJING (AP) — China on Friday imposed anti-dumping duties on European brandy, most notably cognac produced in France, as trade tensions between Beijing and United States allies continue to rise. The tariffs, effective on Saturday, will range from 27.7% to 34.9%, China's Commerce Ministry said. They are to be in place for five years and will not be applied retroactively. The announcement came during a European visit by Chinese Foreign Minister Wang Yi aimed at ironing out trade differences. Wang was set to visit Paris after stops in Brussels and Berlin. The anti-dumping duties are the result of a probe China launched last year into European cognac, after the European Union undertook a probe into Chinese electric vehicles subsidies. 'The investigative authority finally ruled that the dumping of related imported brandy from the EU has existed,' read a statement by China's Commerce Ministry. 'The domestic brandy industry faces a material threat of damage, and there is a causal relationship between the dumping and the substantial damage threat.' Besides cognac, China has also launched investigations into European pork and dairy products. The brandy probe was the first and targeted mainly French makers of cognac and similar spirits such as Armagnac. China initially announced provisional tariffs of 30.6% to 39% on French cognac producer Remy Martin and other European brandies after a majority of E.U. countries approved duties on electric vehicles made in China. Wang was set to meet his French counterpart, Jean-Noël Barrot, later Friday in Paris. His European tour comes ahead of a China-EU summit to be focused on trade later this month in Beijing.
Yahoo
16 minutes ago
- Yahoo
China to require EU brandy exporters to raise prices or face tariffs
China will require major European brandy exporters to raise prices or risk anti-dumping taxes of up to 34.9 percent from Saturday, the latest salvo in its long-running trade spat with the bloc. Almost all EU brandy is cognac produced in France, exports of which to China are worth 1.4 billion euros ($1.6 billion) per year. Beijing launched an investigation last year into EU brandy, months after the bloc undertook a probe into Chinese electric vehicle (EV) subsidies. It said it had determined in a preliminary ruling that dumping had occurred and imposed "temporary anti-dumping measures" on imports of the alcoholic beverage -- moves now costing the industry 50 million euros per month. Beijing's commerce ministry said on Friday that China's tariff commission had "decided to impose anti-dumping duties on imports of relevant brandy originating in the EU" from Saturday. But Beijing said in an explanatory note that several major French cognac producers had signed onto a price commitment to avoid the tariffs -- as long as they sell at or above an agreed minimum price. French liquor giant Jas Hennessy would be hit with levies of 34.9 percent if it reneges on the deal, it said. Remy Martin will be hit with 34.3 percent and Martell 27.7 percent. "The decision to accept the price commitment once again demonstrates China's sincerity in resolving trade frictions through dialogue and consultation," a commerce ministry spokesperson said in a statement. China has sought to improve relations with the European Union as a counterweight to superpower rival the United States. But deep frictions remain over economics -- including a yawning trade deficit of $357.1 billion between China and the EU, as well as Beijing's close ties with Russia despite Moscow's war in Ukraine. The new levy threats come as Chinese top diplomat Wang Yi has held fraught meetings with his counterparts during a tour of Europe this week. They will likely be high on the agenda when he meets French President Emmanuel Macron and Foreign Minister Jean-Noel Barrot on Friday afternoon in Paris. - Bitter taste - A trade row between Beijing and the bloc erupted last summer when the EU moved towards imposing hefty tariffs on electric vehicles imported from China, arguing that Beijing's subsidies were unfairly undercutting European competitors. Beijing denied that claim and announced what were widely seen as retaliatory probes into imported European pork, brandy and dairy products. The bloc imposed extra import taxes of up to 35 percent on Chinese EV imports in October. Beijing later lodged a complaint with the World Trade Organization, which said in April that it would set up an expert panel to assess the EU's decision. China and the EU are scheduled to hold a summit this month to mark the 50th anniversary of the establishment of diplomatic ties. Bloomberg News reported on Friday, citing unnamed sources, that Beijing intends to cancel the second day of the summit. mjw-oho/dhw
17 minutes ago
After decades of service, Taiwan retires its last F-5 fighter jets
After decades in service, Taiwan's Vietnam-era F-5 fighter jets are being retired as part of the island democracy's transition to more advanced hardware HUALIEN, Taiwan -- After decades in service, Taiwan's Vietnam-era F-5 fighter jets are being retired as part of the island democracy's transition to more advanced hardware. To keep pace with increased threats from mainland China, Taiwan has been upgrading both its manned and unmanned aerial assets, including purchasing 66 of the latest generation F-16V fighters and upgrading existing aircraft to modern specifications. China claims the island as its own territory and has never dropped its threat to invade since the sides split amid civil war in 1949. The air force invited journalists on Friday to witness one last flyby by the F-5, which first entered service with Taiwan in 1965 and most of which have now been converted to trainers, reconnaissance planes or decoys. The planes began moving into a backing role 30 years ago when Taiwan began acquiring more modern American F-16s, French Mirage 2000s and domestically developed Ching Kuos. The F-5 is one of the world's most widely produced jets, with Taiwan the largest operator at one point with 336, producing some 100 domestically. Dozens of countries still use them, including the U.S., which uses them as pretend opponents in training exercises. The planes gained favor for their high speed and maneuverability, alongside their low cost and ease of maintenance. For Taiwan, they guarded the skies above the Taiwan Strait against mainland China's Soviet and domestically built fighters. Taiwan's F-5s were based along the eastern coast, separated from China by both the 160 kilometer (100 mile)-wide Taiwan Strait and Taiwan's formidable Central Mountain Range.
