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Bloomberg
6 days ago
- Business
- Bloomberg
US Trade Talks Overshadow EU-China Climate Pledge
Welcome to the Brussels Edition, Bloomberg's daily briefing on what matters most in the heart of the European Union. We're keen to hear your views on this newsletter. Please participate in our short survey. EU leaders Ursula von der Leyen and Antonio Costa are in Beijing today for the signing of a landmark climate cooperation document with Chinese President Xi Jinping. Von der Leyen told Xi that relations were at 'an inflection point.' But the historic moment is at risk of being overshadowed by rapidly evolving EU-US trade talks. Brussels and Washington are progressing toward an agreement that would set a 15% tariff for most imports, according to diplomats briefed on the negotiations, though the EU is still pushing for cars to be included in that rate. Steel and aluminum imports above a certain quota potentially face a higher tariff of 50%. White House trade adviser Peter Navarro sounded a word of caution about the prospect of a deal. 'Never, never assume that anything's fixed until the boss says it's fixed,' he told Bloomberg in an interview yesterday.
Irish Times
18-07-2025
- Business
- Irish Times
Ireland needs to stop holding out against Mercosur
Amid the consternation on tariffs there is a certainty; it is time to get Mercosur done. The EU trade agreement with Argentina, Brazil, Paraguay and Uruguay concluded last year and follows one with Canada. A deal with India is well advanced, and Indonesia is in the offing. Mercosur is ready now, but it is politically tricky here. It is a big win for Ireland, but beef farmers feel challenged, the Opposition supports them, and there is no sign of the Government taking its courage into its hands. That is not sustainable politically in Brussels, nor is it in Ireland's interest as a trading nation. Mercosur is a distinct issue, but interconnected with other issues that affect farmers, including threatened Common Agricultural Policy (CAP) spending in the seven-year €1.8 trillion EU budget from 2028, announced on Wednesday. Then there is the Nitrates Directive under which Ireland has a derogation allowing greater livestock density, and which runs out this year. The derogation is connected to our underperformance under the Habitats Directive. Green policies are important after all. The farming vote is not what it was, and farm politics is fractious. But farmers are disproportionately important to the Government parties which have thin electoral margins. Minister for Agriculture Martin Heydon must simultaneously move out of the cul de sac that is opposition to Mercosur, deliver on the Nitrates Directive derogation this year and build a coalition for EU budget negotiations next year. Writing a commitment into the Programme for Government to oppose the current Mercosur trade deal was a particular error of judgment. A 10 per cent tariff with the US is now a new baseline – and much worse is possible . The Mercosur deal eliminates tariffs on 91 per cent of all products, benefiting virtually all Irish goods. In 2023, that included €329 million in chemicals and pharmaceuticals. The value of Irish services exported to Mercosur is €1.8 billion per year. Farmers win because tariffs will be reduced from 55 per cent to zero. The political rub, however, is that the deal allows 99,000 tonnes of Mercosur beef to enter the EU market with a 7.5 per cent duty. That is about one steak per person per year. READ MORE But it is the narrative that has jammed political support for the deal which requires that imported food products comply with EU Sanitary and Phytosanitary standards. Curiously, we happily import protein from the Mercosur countries to feed our livestock here. This is a matter of interest, not principle. It is fair to insist that what is agreed is policed properly. But expat policing isn't a new concept in a country where we welcomed Russian vets to verify animal health standards during the BSE crisis of the 1990s. Mercosur is one of several trade deals that can partly rebalance the cost of US tariffs. It is also imperative that it is not a diversion as we try to hold on to the Nitrates Directive derogation. Emerging plans to divide the country into 48 administrative regions to assess compliance with environmental standards seem bizarre. An extended derogation, which we are the very last to benefit from, should be based on future full compliance of the entire country with the Habitat Directive. [ More than 20 Irish companies on Asian trade mission Opens in new window ] Farm product prices are at record highs, except for cereals. These are good times for farmers generally, but they are also changing times. The EU budget proposed this week is just the beginning of a long process. Ireland will hold the presidency of the EU Council in the second half of 2026. That is both an opportunity and a restraint, but it will double down on domestic political pressure to shape an EU budget that is more supportive of farmers. The current proposal means the CAP is no longer a standalone fund and is instead merged with EU cohesion, migration, and infrastructure funding. What isn't ring-fenced is not guaranteed. Ultimately, this is the real fight for farmers and will matter long after Mercosur is a fact, and a Nitrates Directive derogation that may be extended temporarily is a distant memory. [ Is Trump's tariffs plan working for the US? And where does it go next? Opens in new window ] Farmers are divided between beef and dairy, and between big and small. Farm politics is a melee. Dairy farmers, even with a derogation from the Nitrates Directive, need more land, which is pushing up prices. That edges out younger farmers but suits older ones who are happy to take higher rents. The EU now has other priorities, including defence, to compete with the CAP established in 1962. Big decisions will be taken this year and bigger ones in the next 18 months. Holding out against Mercosur is a tactical mistake for farmers in terms of their own interests. More importantly, it is a strategic mistake by the Government in terms of the national interest.
New York Times
13-07-2025
- Business
- New York Times
American Allies Want to Redraw the World's Trade Map, Minus the U.S.
Trade chaos is forcing America's allies closer together, and further from the United States. And as that happens, the European Union is trying to position itself at the center of a new global trade map. The 27-nation bloc learned this weekend that America will subject it to 30 percent tariffs starting Aug. 1. Ursula von der Leyen, the president of the E.U. executive branch, responded with a pledge to keep negotiating, and to retaliate if necessary. But that was not the entire strategy. Europe, like many of the United States' trading partners, is also looking for more reliable friends. 'Meanwhile, we continue to deepen our global partnerships, firmly anchored in the principles of rules-based international trade,' Ms. von der Leyen said. She will make good on that starting Sunday. Ms. von der Leyen is scheduled to give a speech alongside Indonesia's president. Just as Mr. Trump threatens to put hefty tariffs on the Asian nation, the European Union is working to relax trade barriers. It is a split screen that is becoming typical. On one side, the United States sows uncertainty as it blows up weeks of painstaking negotiations and escalates tariff threats. On the other, the European Union and other American trading partners are forging closer ties, laying the groundwork for a global trading system that revolves less and less around an increasingly fickle United States. Want all of The Times? Subscribe.
Zawya
08-07-2025
- Business
- Zawya
Euro zone bond yields at six-week highs, bond auctions in focus
Germany's longer-dated bond yields hit six-week highs on Tuesday, as an absence so far of additional U.S. tariffs on the European Union left markets to focus on European spending and borrowing. That attention on borrowing was underscored on Tuesday by a series of bond auctions in Europe, while a rise in Japanese yields added further pressure to euro zone bonds. Germany's 10-year bond yield, the euro zone benchmark, rose 6 basis points to 2.66%, its highest since May 21. As the German two-year yield was up just 4 bps at 1.88%, the gap between the two widened, or, in market parlance the German yield curve steepened. The German 2-10 curve is now at its steepest since late May, with the gap between the two at 78 bps. Trade remained the main focus for markets on Tuesday after U.S. President Donald Trump on Monday told partners including powerhouse suppliers such as Japan and South Korea that they would face sharply higher tariffs from August 1. The EU will not be receiving a letter setting out higher tariffs, EU sources familiar with the matter told Reuters on Monday. The EU still aims to reach a trade deal by Wednesday after European Commission President Ursula von der Leyen and Trump had a "good exchange," a Commission spokesperson said. Bond analysts at ING also flagged that the August 1 date for new tariffs to kick in suggested more time to negotiate deals. "In rates markets the positive trade news is being translated into more steepening pressures," they wrote in a note. "We think more clarity around trade is a prerequisite for rates to drift higher as it allows markets to focus more on the EU and German spending stories." HIGHER BORROWING Germany plans to increase spending significantly on defence and infrastructure and analysts expect the greater borrowing this will require will cause longer-dated yields to rise. That has particularly affected very long-dated yields, and Germany's 30-year yield was up 7 bps at 3.19% on Tuesday. That's just a whisker off the 3.197% it hit on May 22. Breaking past this would take it to its highest since March. In contrast, rate-sensitive short-dated bond yields are kept in check by the European Central Bank's fears of a major slowing in inflation that would cause them to cut rates further. Tuesday also sees significant bond issuance by European countries, reinforcing the focus on debt supply. Germany issued a 5-year bond, which saw bids well below the average of the last three issues. Also issuing bonds on Tuesday are the EU, the Netherlands, Austria and Britain. Analysts at Rabobank also flagged the impact of a rise in Japanese yields. Investors there are looking ahead to an upcoming upper house election, at which polls indicate the ruling Liberal Democratic Party and its coalition partner are at risk of losing their majority. The 30-year JGB yield jumped 12.5 basis points (bps) to 3.09%, its highest since May 23. Back in Europe, most other bonds were trading in line with German benchmarks. Italy's 10-year yield rose 6 bps to 3.58%, again its highest since late May. France's 10-year yield hit a three month high of 3.386%, and was up 6 bps on the day. (Reporting by Alun John Editing by Andrew Heavens and Gareth Jones)
Washington Post
23-06-2025
- Politics
- Washington Post
EU finds 'indications' Israel is breaching their trade deal with its actions in Gaza
BRUSSELS — The European Union says there are ″indications″ that Israel's actions in Gaza are violating human rights obligations in its trade agreement with the EU, according to its findings seen by The Associated Press. EU foreign policy chief Kaja Kallas presented the review to foreign minsters of the 27-member bloc in Brussels on Monday, leading at least one country to openly propose suspending the trade deal.
