
Ukraine reshuffles Cabinet with wartime economy struggling
Deputy Prime Minister and Economy Minister Yulia Svyrydenko was appointed as the new premier in a Cabinet stacked with presidential loyalists, many with experience of working with the administration of U.S. President Donald Trump. Svyrydenko helped broker a landmark minerals deal with Washington earlier this year.
Ukrainian lawmakers approved Svyrydenko's nomination and will vote on the entire Cabinet overhaul later on Thursday.
Serhiy Marchenko and Andrii Sybiha were nominated to continue their roles as finance minister and the country's top diplomat. The reshuffle reflects Ukraine's effort to increase spending on its war effort and to strengthen — at times — strained relations with Trump administration.
"The two main challenges are weapons and money,' said Volodymyr Fesenko, head of the Penta Research Institute in Kyiv. "How effectively the government can respond to them will largely determine whether we can withstand the Russian invasion next year.'
Trump this week pledged fresh weapons supplies to Kyiv that would be paid for by NATO allies, mainly from Europe. He also threatened harsh economic penalties on Russia if President Vladimir Putin doesn't end his war within 50 days. The announcement offered hope of stronger support following a series of massive Russian drone and missile strikes on Ukrainian cities.
On Wednesday, Ukraine's parliament backed a bill amending the 2025 budget to boost defense spending by 412 billion hryvnia ($10 billion) this year. The country faces a $40 billion shortfall to cover social spending, including next year's salary and pension payments, for which it needs external financing.
Svyrydenko has gained clout from previous work with the U.S., which puts her in a good position to spearhead Ukraine's drive for more economic support, Fesenko said.
Zelenskyy also proposed Olha Stefanishyna as envoy to the U.S., praising her "successful work' in building ties with Washington in her role as Deputy Prime Minister in charge of European and Euro-Atlantic Integration. Like Svyrydenko, she also worked on the minerals deal with the U.S.
The reshuffle regroups Ukraine's arms industry under the Defense Ministry, which will now be led by former Prime Minister Denys Shmyhal.
The newly expanded Defense Ministry remit reflects the growing importance of Ukraine's domestic arms production, which currently covers 40% of what its forces use on the battlefield. While defense procurement budget is around $12 billion, the country's industry has the capacity to produce military hardware worth three times that amount. But it lacks sufficient funding.
Ukraine's domestic weapons production must increase to make up 50% of the military's equipment during the first six months of the new government, Zelenskyy said in a social media post on Wednesday.
Weapons production will remain a key driver of growth, but a major challenge will be to stimulate economic growth in non-military sectors during wartime, said Olena Bilan, chief economist at the Kyiv-based investment bank Dragon Capital.
"I view it positively that technocrats who have proven their effectiveness in previous roles are being promoted,' Bilan said of the government's reshuffle, pointing to the urgent need to guarantee continued external financing.
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The Mainichi
an hour ago
- The Mainichi
US and China to talk in Stockholm on trade with eye on Trump-Xi summit later this year
WASHINGTON (AP) -- When top U.S. and Chinese officials meet in Stockholm, they are almost certain to agree to at least leaving tariffs at the current levels while working toward a meeting between their presidents later this year for a more lasting trade deal between the world's two largest economies, analysts say. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are set to hold talks for the third time this year -- this round in the Swedish capital, nearly four months after President Donald Trump upset global trade with his sweeping tariff proposal, including an import tax that shot up to 145% on Chinese goods. "We have the confines of a deal with China," Trump said Friday before leaving for Scotland. Bessent told MSNBC on Wednesday that the two countries after talks in Geneva and London have reached a "status quo," with the U.S. taxing imported goods from China at 30% and China responding with a 10% tariff, on top of tariffs prior to the start of Trump's second term. "Now we can move on to discussing other matters in terms of bringing the economic relationship into balance," Bessent said. He was referring to the U.S. running a $295.5 billion trade deficit last year. The U.S. seeks an agreement that would enable it to export more to China and shift the Chinese economy more toward domestic consumer spending. The Chinese embassy in Washington said Beijing hopes "there will be more consensus and cooperation and less misperception" coming out of the talks. With an eye on a possible leaders' summit, Stockholm could provide some answers as to the timeline and viability of that particular goal ahead of a possible meeting between Trump and Chinese leader Xi Jinping. "The meeting will be important in starting to set the stage for a fall meeting between Trump and Xi," said Wendy Cutler, a former U.S. trade negotiator and now vice president at the Asia Society Policy Institute. "Beijing will likely insist on detailed preparations before they agree to a leaders' meeting." In Stockholm, the two sides are likely to focus on commercial announcements to be made at a leaders' summit as well as agreements to address "major irritants," such as China's industrial overcapacity and its lack of control over chemicals used to make fentanyl, also to be announced when Xi and Trump should meet, Cutler said. Sean Stein, president of the U.S.-China Business Council, said Stockholm could be the first real opportunity for the two governments to address structural reform issues including market access in China for U.S. companies. What businesses will be seeking coming out of Stockholm would largely be "the atmosphere" -- how the two sides characterize the discussions. They will also look for clues about a possible leaders' summit because any real deal will hinge on the two presidents meeting each other, he said. Fentanyl-related tariffs are likely a focus for China In Stockholm, Beijing will likely demand the removal of the 20% fentanyl-related tariff that Trump imposed earlier this year, said Sun Yun, director of the China program at the Washington-based Stimson Center. This round of the U.S.-China trade dispute began with fentanyl, when Trump in February imposed a 10% tariff on Chinese goods, citing that China failed to curb the outflow of the chemicals used to make the drug. The following month, Trump added another 10% tax for the same reason. Beijing retaliated with extra duties on some U.S. goods, including coal, liquefied natural gas, and farm products such as beef, chicken, pork and soy. In Geneva, both sides climbed down from three-digit tariffs rolled out following Trump's "Liberation Day" tariffs in April, but the U.S. kept the 20% "fentanyl" tariffs, in addition to the 10% baseline rate -- to which China responded by keeping the same 10% rate on U.S. products. These across-the-board duties were unchanged when the two sides met in London a month later to negotiate over non-tariff measures such as export controls on critical products. The Chinese government has long protested that American politicians blame China for the fentanyl crisis in the U.S. but argued the root problem lies with the U.S. itself. Washington says Beijing is not doing enough to regulate precursor chemicals that flow out of China into the hands of drug dealers. In July, China placed two fentanyl ingredients under enhanced control, a move seen as in response to U.S. pressure and signaling goodwill. Gabriel Wildau, managing director at the consultancy Teneo, said he doesn't expect any tariff to go away in Stockholm but that tariff relief could be part of a final trade deal. "It's possible that Trump would cancel the 20% tariff that he has explicitly linked with fentanyl, but I would expect the final tariff level on China to be at least as high as the 15-20% rate contained in the recent deals with Japan, Indonesia, Vietnam," Wildau said. US wants China to dump less, buy less oil from Russia and Iran China's industrial overcapacity is as much a headache for the United States as it is for the European Union. Even Beijing has acknowledged the problem but suggested it might be difficult to address. America's trade imbalance with China has decreased from a peak of $418 billion in 2018, according to the Census Bureau. But China has found new markets for its goods and as the world's dominant manufacturer ran a global trade surplus approaching $1 trillion last year -- somewhat larger than the size of the U.S. overall trade deficit in 2024. And China's emergence as a manufacturer of electric vehicles and other emerging technologies has suddenly made it more of a financial and geopolitical threat for those same industries based in the U.S., Europe, Japan and South Korea. "Some enterprises, especially manufacturing enterprises, feel more deeply that China's manufacturing capabilities are too strong, and Chinese people are too hardworking. Factories run 24 hours a day," Chinese Premier Li Qiang said on Thursday when hosting European Commission President Ursula von der Leyen in Beijing. "Some people think this will cause some new problems in the balance of supply and demand in world production." "We see this problem too," Li said. Bessent also said the Stockholm talks could address Chinese purchases of Russian and Iranian oil. However, Wildau of Teneo said China could demand some U.S. security concessions in exchange, such as a reduced U.S. military presence in East Asia and scaled-back diplomatic support for Taiwan and the Philippines. This would likely face political pushback in Washington. The Stockholm talks will be "geared towards building a trade agreement based around Chinese purchase commitments and pledges of investment in the U.S. in exchange for partial relief from U.S. tariffs and export controls," Wildau said. He doubts there will be a grand deal. Instead, he predicts "a more limited agreement based around fentanyl." "That," he said, "is probably the preferred outcome for China hawks in the Trump administration, who worry that an overeager Trump might offer too much to Xi."


Yomiuri Shimbun
an hour ago
- Yomiuri Shimbun
Euro Rises after US, EU Agree to Tariff Deal
TOKYO, July 28 (Reuters) – The euro gained on Monday following the announcement of a framework trade agreement between the United States and the European Union, the latest in a flurry of deals to avert a global trade war. 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.


Yomiuri Shimbun
an hour ago
- Yomiuri Shimbun
US-EU Deal Sets a 15% Tariff on Most Goods and Averts the Threat of a Trade War with a Global Shock
EDINBURGH, Scotland (AP) — The United States and the European Union agreed on Sunday to a trade framework setting a 15% tariff on most goods, staving off — at least for now — far higher imports on both sides that might have sent shock waves through economies around the globe. The sweeping announcement came after President Donald Trump and European Commission chief Ursula von der Leyen met briefly at Trump's Turnberry golf course in Scotland. Their private sit-down culminated months of bargaining, with the White House deadline Friday nearing for imposing punishing tariffs on the EU's 27 member countries. 'It was a very interesting negotiation. I think it's going to be great for both parties,' Trump said. The agreement, he said, was 'a good deal for everybody' and 'a giant deal with lots of countries.' Von der Leyen said the deal 'will bring stability, it will bring predictability, that's very important for our businesses on both sides of the Atlantic.' Many facets will require more work As with other, recent tariff agreements that Trump announced with countries including Japan and the United Kingdom, some major details remain pending in this one. Trump said the EU had agreed to buy some $750 billion worth of U.S. energy and invest $600 billion more than it already is in America — as well as make a major military equipment purchase. He said tariffs 'for automobiles and everything else will be a straight across tariff of 15%' and meant that U.S. exporters 'have the opening up of all of the European countries.' Von der Leyen said the 15% tariffs were 'across the board, all inclusive' and that 'indeed, basically the European market is open.' At a later news conference away from Turnberry, she said the $750 billion in additional U.S. energy purchases was actually over the next three years — and would help ease the dependence on natural gas from Russia among the bloc's countries. 'When the European Union and the United States work together as partners, the benefits are tangible,' Von der Leyen said, noting that the agreement 'stabilized on a single, 15% tariff rate for the vast majority of EU exports' including cars, semiconductors and pharmaceuticals. '15% is a clear ceiling,' she said. But von der Leyen also clarified that such a rate wouldn't apply to everything, saying that both sides agreed on 'zero for zero tariffs on a number of strategic products,' like all aircraft and component parts, certain chemicals, certain generic drugs, semiconductor equipment, some agricultural products, natural resources and critical raw materials. It is unclear if alcohol will be included in that list. 'And we will keep working to add more products to this list,' she said, while also stressing that the 'framework means the figures we have just explained to the public, but, of course, details have to be sorted out. And that will happen over the next weeks.' Further EU approval needed In the meantime, there will be work to do on other fronts. Von der Leyen had a mandate to negotiate because the European Commission handles trade for member countries. But the Commission must now present the deal to member states and EU lawmakers, who will ultimately decide whether or not to approve it. Before their meeting began, Trump pledged to change what he characterized as 'a very one-sided transaction, very unfair to the United States.' 'I think both sides want to see fairness,' the Republican president told reporters. Von der Leyen said the U.S. and EU combined have the world's largest trade volume, encompassing hundreds of millions of people and trillions of dollars and added that Trump was 'known as a tough negotiator and dealmaker.' 'But fair,' Trump said. Trump has spent months threatening most of the world with large tariffs in hopes of shrinking major U.S. trade deficits with many key trading partners. More recently, he had hinted that any deal with the EU would have to 'buy down' a tariff rate of 30% that had been set to take effect. But during his comments before the agreement was announced, the president was asked if he'd be willing to accept tariff rates lower than 15%, and he said 'no.' First golf, then trade talk Their meeting came after Trump played golf for the second straight day at Turnberry, this time with a group that included sons Eric and Donald Jr. In addition to negotiating deals, Trump's five-day visit to Scotland is built around golf and promoting properties bearing his name. A small group of demonstrators at the course waved American flags and raised a sign criticizing British Prime Minister Keir Starmer, who plans his own Turnberry meeting with Trump on Monday. Other voices could be heard cheering and chanting 'Trump! Trump!' as he played nearby. On Tuesday, Trump will be in Aberdeen, in northeastern Scotland, where his family has another golf course and is opening a third next month. The president and his sons plan to help cut the ribbon on the new course. The U.S. and EU seemed close to a deal earlier this month, but Trump instead threatened the 30% tariff rate. The deadline for the Trump administration to begin imposing tariffs has shifted in recent weeks but is now firm and coming Friday, the administration insists. 'No extensions, no more grace periods. Aug. 1, the tariffs are set, they'll go into place, Customs will start collecting the money and off we go,' U.S. Commerce Secretary Howard Lutnick told 'Fox News Sunday' before the EU deal was announced. He added, however, that even after that 'people can still talk to President Trump. I mean, he's always willing to listen.' Without an agreement, the EU said it was prepared to retaliate with tariffs on hundreds of American products, ranging from beef and auto parts to beer and Boeing airplanes. If Trump eventually followed through on his threat of tariffs against Europe, meanwhile, it could have made everything from French cheese and Italian leather goods to German electronics and Spanish pharmaceuticals more expensive in the United States. 'I think it's great that we made a deal today, instead of playing games and maybe not making a deal at all,' Trump said. 'I think it's the biggest deal ever made.'