Latest news with #EuropeEarlyEdition
CNBC
3 days ago
- Business
- CNBC
How the EU is preparing to reach a tariff deal in Trump's game of chicken
The U.S. has doubled down on its plan to impose 30% tariffs on the European Union next month, seeking to ramp up pressure on the bloc to reach a deal. With less than two weeks to go until U.S. President Donald Trump's Aug. 1 deadline, the EU continues to negotiate with U.S. trade officials, while drawing up a series of possible countermeasures if a deal is not forthcoming. For its part, the U.S. said the EU continues to be "very eager" in negotiating a trade agreement, according to White House press secretary Karoline Leavitt. Speaking at a news conference on Thursday, Leavitt said the EU is exploring "ways to lower their tariff and their non-tariff barriers that we have long said harm our workers and our companies." The U.S. president, whose trade war tactics have earned him the TACO nickname, will not accept a postponement of the Aug. 1 deadline, Leavitt said. TACO stands for "Trump always chickens out" in reference to the president's tendency to date to announce high import tariffs, only to later delay or lower them. Michal Baranowski, Polish undersecretary of state at the ministry of economic development and technology, said that, as work continues in a bid to reach a deal, the first part of the EU's strategy is to negotiate with U.S. officials in good faith. "The second one is, let's prepare for countermeasures in case we don't [reach a deal]. And we have countermeasures on both the steel and aluminium tariffs as well as the initial package of 72 billion [euros] for so-called reciprocal tariffs," Baranowski told CNBC's "Europe Early Edition" on Friday. "Point three, we are comparing notes with other countries that are affected by U.S. tariffs, not to necessarily coordinate but to get a sense of where everyone else is, because the other countries negotiating with the U.S. are a bit on the same wagon," he continued. "Fourth, we are really strengthening European competitiveness." Poland's Baranowski said the EU represents the "most vital economic relationship" for the U.S., adding that Washington has "as much to gain or to lose from this relationship as Europe." His comments come shortly after the EU's top trade negotiator Maros Sefcovic traveled to Washington for further trade talks. The prospect of fresh U.S. tariffs represents a major blow to the EU. The 27-nation bloc had been scrambling to secure a preliminary agreement to spare it from receiving a Trump letter dictating a new, across-the-board tariff on its exports to the U.S. The U.S. and EU have the largest bilateral trade and investment relationship in the world, representing almost 30% of global trade in goods and services, and accounting for 43% of the global gross domestic product (GDP), according to EU figures. Last year alone, the value of EU-U.S. trade amounted to 1.68 trillion euros ($1.96 trillion), equivalent to roughly 4.6 billion euros of trade per day. Trump has repeatedly hit out at the EU for what he perceives to be an unfair trading relationship, often citing the EU's trade surplus with the U.S. As part of its push to reach a U.S.-EU framework trade deal, the European bloc is said to be planning to offer the U.S. tit-for-tat tariff reductions on cars. The move, as reported by the Financial Times on Thursday, would see the EU drop its 10% duties on U.S. car exports if the Trump administration reduces its own tariffs on the sector to below 20%. The European Commission, the EU's executive arm, declined to comment on the report when contacted by CNBC on Friday. The U.S. president imposed 25% tariffs on foreign-made vehicles and parts earlier in the year, hitting companies across Europe particularly hard. Sweden's Volvo Cars, for instance, on Thursday reported a sharp decline in second-quarter operating profit, saying the result reflects an ongoing challenging environment for the industry. The automaker, which is seen as one of the most exposed European automakers to U.S. tariffs, was the first regional carmaker to release results in what is expected to be a bruising earnings season.
CNBC
7 days ago
- Business
- CNBC
Trump's 30% tariff letter leaves EU scrambling to bring U.S. on side
The European Union has been left scrambling after U.S. President Donald Trump said he would slap a 30% tariff on goods imported from the bloc beginning Aug. 1. European leaders were quick to respond, saying they would still work to strike an agreement with the U.S. before the start of August. The EU also further delayed countermeasures which were set to come into effect this week and warned that preparations for additional retaliatory moves were underway. EU Trade Commissioner Maros Sefcovic on Monday told reporters that the letter had been received with "regret and disappointment ... especially considering the advanced stage of our ongoing negotiations." Sefcovic stressed that the EU was still focused on finding a negotiated solution, but was preparing for all possible outcomes — which could include countermeasures. He also said that he would speak to his U.S. counterparts later in the day. "I cannot imagine walking away without genuine effort," the trade commissioner said. With less than a month before Trump's new deadline, the European Union will have to act fast to prevent the tariffs from coming into effect or risk further escalation. While EU leaders remain determined to strike a deal, economists and analysts warned that the threat of a 30% tariff rate has nevertheless added fresh pressure to the 27-member block. "It's very bad news for Europe," Alicia Garcia-Herrero, senior fellow at Bruegel and chief economist for Asia Pacific at Natixis, told CNBC's "Europe Early Edition" on Monday. "Trump is pushing the commission to really come up with a better deal," she added. Carsten Brzeski, global head of macro at ING, and Inga Fechner, a senior economist at ING who focuses on global trade, struck a similar tone. "Trump's letter to the EU is not a love letter but also not a hate letter. It's a letter to increase pressure in the ongoing negotiations," they said in a note on Sunday. The EU however still has options, the economists said, suggesting that one approach could be for the EU to offer to boost its purchasing of U.S. products ranging from soybeans to military equipment. Brussels could also reduce existing tariffs and other trade hurdles on items such as U.S. cars, or introduce export bans on products that are important to the U.S. such as European-made pharmaceuticals, Brzeski and Fechner said. "The fourth and final option would be to go into outright retaliation with either increasing tariffs on US goods or the nuclear option in trade: tariffs on digital services but also tighter regulations on US tech firms," the economists suggested, noting, however that this would likely trigger a full blown trade war. Despite the additional pressure for the EU, the expectation remains that the bloc and Washington D.C. will strike a agreement in the coming weeks. "I think both sides will strike a compromise. This is in the best interest of both the U.S. and the European Union," said Joerg Kraemer, chief economist at Commerzbank. "I expect in the end, a kind of average tariff rate for the European Union for exports to the U.S. in the area of 15%," he told CNBC'S "Europe Early Edition" on Monday. Notably, this rate would be higher than the 10% that had previously been anticipated by many and is in line with the deal that has been agreed upon by the U.K. and U.S. Berenberg Economist Salomon Fiedler meanwhile appeared more optimistic, saying in a note that the bank was still expecting 10% duties even as "the risks are now strongly skewed towards higher rates." One reason for optimism is that Trump has repeatedly taken extreme positions initially, and then later compromised, Fiedler argued. "The fact that Trump only threatened the new 30% rate for 1 August, instead of implementing it more quickly, suggests he is still looking to negotiate," he said. Trump may also shy away from further tariffs as businesses start passing on higher import costs to consumers, Fiedler suggested. The domestic political backdrop may also change, which could make it less important for the U.S. president to try and keep public attention on trade, he added. On the flipside, risk factors for higher levies include the unlikelihood that the U.S.' trade deficits — which Trump has often used as an argument for tariffs — will disappear, and the U.S. administration's reliance on tariff incomes to supplement its budget, according to Fiedler. "The always remote hope of a good negotiation outcome — the bilateral removal of all tariffs and some other trade barriers between the EU and the US — has all but disappeared from view by now," he noted.
CNBC
03-07-2025
- Business
- CNBC
What the U.S.-Vietnam trade deal tells us about the future of tariffs
Global attention turned to Vietnam on Thursday, after U.S. President Donald Trump announced a trade deal with Hanoi just days before Washington's reciprocal tariffs come back in full force. Under the agreement, the U.S. will apply a 20% duty on Vietnamese imports — sharply below the 46% rate Trump had imposed in early April. U.S. imports to Vietnam will meanwhile not be subject to tariffs. Trump also said that Vietnam had agreed to a 40% duty on any products that originally came from another country, but were sent to Vietnam for final shipment to the U.S. China has reportedly repeatedly relied on this practice, known as transshipping, to avoid trade barriers. Vietnam is one of the few countries that has struck a trade deal with the White House, while the clock ticks down on Trump's 90-day temporary reprieve. Many nations have been left wondering how the future of their trade relationship with the world's largest economy could shape up. "What we learned from the Vietnam deal is, if anything, the tariffs are going to go up from here, not down," Sebastian Raedler, head of European equity strategy at BofA, told CNBC's "Europe Early Edition" on Thursday. The deal could be cause for concern for other emerging market economies like Vietnam, economists and strategists at Citi said in a note Thursday. "On balance, we believe there is more for EM Asia to worry about than expect gains if this deal reflects what is to come soon," they noted. While the development removes uncertainty and suggests other agreements could emerge in the coming days, the 20% tariff rate is higher than the expected 10% levy on goods, according to Citi's experts. They add that the separate 40% rate on transshipped goods suggests other countries may also need to agree to such a duty. "Thailand followed by Malaysia might be more exposed than other EM Asia peers (apart from Vietnam). A separate and more punitive tariff on transshipped goods was least expected by the market," the note said. "Additionally, there may be spillovers to other exporters that have set up factories in Vietnam in past years," for example Korea, it added. While the Vietnam-U.S. deal suggests more deals likely lie ahead for other Asian countries, it does not necessarily mean that the same is true for the European Union, Lavanya Venkateswaran, senior ASEAN economist at OCBC Bank, told CNBC. "The Vietnamese authorities have been clear about their intent to negotiate with the US, even before the reciprocal announcements were made in April," she said by email, adding that the same was true for other regional economies like Indonesia and Malaysia. "Compared to these economies, the case with [the] EU has not always been smooth sailing and the US has been more public in its criticism of the EU at different times in the past few months," Venkateswaran said. Trade negotiations between the EU and U.S. have been challenging and slow to develop, with sources telling CNBC that a bare-bones "political" deal with scant initial details may be the the EU's best hope at this point. Analysts and economists have also expressed uncertainty about the likelihood of a trade agreement, given key sticking points like big tech regulation, taxation, and broadly mismatched world views. Trump has called for tariffs as high as 50% on the EU, while the bloc has threatened wide-ranging countermeasures, which have also been paused until next week.
CNBC
25-06-2025
- Business
- CNBC
Europe must wake up amid 'very complicated' relations with the U.S., former Italy PM says
The European Union needs to step up its role in global affairs as tensions with U.S. President Donald Trump build up, according to former Italian Prime Minister Matteo Renzi. His comments to CNBC come after Trump said that the EU was "not going to be able to help" ending the conflict in the Middle East, where Iran and Israel have been at war. A ceasefire between the two regional foes was in effect, according to Trump, but the situation remains delicate and uncertain. Regardless, Trump's criticism of Europe follows other events where the continent has struggled to have a seat around the table, including in peace conversations between Ukraine and Russia. "There is a very complicated situation, because our best ally, United States of America, and POTUS, President of the United States of America, attack[s] us every day, every week, every month," said Renzi, now leader of the Italia Viva party. "And please remember now, in this moment, there is not an agreement about tariffs, and that is a tragedy," Renzi told CNBC's "Europe Early Edition" on Tuesday. The U.S. and the EU have been at odds over trade, with Turmp announcing several rounds of tariffs since taking office. The transatlantic alliance is currently trying to reach an agreement that prevents some, if not all, of the duties put in place. The idea is to reach a compromise before a deadline of July 9. However, the two sides have also not seen eye-to-eye when it comes to defense and foreign policy matters, with European nations increasingly anxious at the idea Trump might scale back U.S. military presence on the European continent. Renzi said that Europe grew up with the idea that its alliance with the U.S. is the best, but given the challenges in the relationship, the region must "wake up and try to play a role as Europeans." This is an idea shared by others on the European continent. Enrico Letta, another former Italian prime minister, said in a Financial Times op-ed published Sunday that: "Donald Trump's actions in his second term make clear that we are dealing with a long-term strategic vision that aims to reshape America's global role, weaken multilateralism and increase pressure on allies, especially Europe". As such, Letta defended that Europe "must strengthen its autonomy and capacity to act." Meanwhile, the German and French leaders acknowledged on Monday that the U.S. has different priorities under the presidency of Trump and that as such the region needs to commit to spend more on defense. "We will live for the foreseeable future in a deeply destabilised environment, and in a world in which our allies will have other dilemmas and priorities," the two heads of state said in a separate Financial Times op-ed, adding: "We will have to rise to these challenges."
Ya Libnan
23-06-2025
- Business
- Ya Libnan
Shipowners avoid the Strait of Hormuz to reduce exposure after U.S. strikes on Iran
An Islamic Revolutionary Guard Corps speed boat sailing along the Arabian Gulf during the IRGC marine parade to commemorateArabian Gulf National Day, near the Bushehr nuclear power plant in the seaport city of Bushehr, in the south of Iran, on April 29, 2024. HIGHLIGHTS The number of vessels navigating the critically important Strait of Hormuz appears to be declining, according to the world's largest shipping association, amid deepening fears of a widening conflict in the Middle East. Jakob Larsen, head of security at Bimco, which represents global shipowners, said all shipowners were closely monitoring developments in the region and some have already paused transits in the Strait of Hormuz due to the deterioration of the security situation. His comments come shortly after the U.S. on Saturday attacked three major Iranian nuclear enrichment facilities, a massive escalation in its involvement with Israel's effort to cripple Tehran's nuclear program. Iran has condemned the attack, saying it reserves all options to defend its sovereignty and people. 'Before the US attack, the impact on shipping patterns was limited,' Bimco's Larsen said. 'Now, after the US attack, we have indications that the number of ships passing is reducing. If we begin to see Iranian attacks on shipping, it will most likely further reduce the number of ships transiting through the [Strait of Hormuz],' he added. The Strait of Hormuz, which connects the Persian Gulf to the Arabian Sea, is recognized as one of the world's most important oil chokepoints . In 2024 and the first quarter of 2025, for instance, flows through the narrow waterway made up roughly 20% of global oil and petroleum product consumption, according to the U.S. Energy Information Administration . Around 20% of global liquified natural gas (LNG) also transited through the Strait of Hormuz last year, primarily from Qatar. The inability of oil to traverse through the waterway, even temporarily, can ratchet up global energy prices, raise shipping costs and create significant supply delays. Yet, in the aftermath of the U.S. attacks on key nuclear sites, Iran's parliament reportedly approved the closure of the waterway, risking alienating its neighbors and trade partners. Standby mode Andy Critchlow, EMEA head of news at S&P Global Commodity Insights, said some anecdotal evidence suggested a slowdown in shipping navigation through the Strait of Hormuz following the U.S. strikes on Fordo, Natanz and Isfahan. 'The pace at which tankers are entering the Strait of Hormuz has definitely slowed. We have indications from shippers that they are putting tankers and vessels on standby, so they are waiting for an opportune moment to enter the Strait,' Critchlow told CNBC's ' Europe Early Edition ' on Monday. 'At the same time, there have been reports that suppliers of LNG, for example, in the Gulf have told lifters of LNG to wait before entering, so [as] not to loiter in the Gulf, keep vessels out of that region,' he added. Japan's Nippon Yusen , one of the world's largest ship operators, recently introduced a standby to enter the Strait of Hormuz to limit the length of its stay in the Persian Gulf, according to S&P Global Commodity Insights, citing a company spokesperson. Nippon Yusen's policy, which comes as part of a precautionary measure following the escalation of Isreal-Iran tensions since June 13, means ships are asked to pause for a day or a couple of days when there is flexibility in the shipping schedule, S&P Global Commodity Insights reported on Monday. The company has not implemented a navigation halt in the Strait of Hormuz, however. Japan's Mitsui O.S.K Lines also instructed vessels to limit time spent in the Gulf following U.S. strikes on Iranian nuclear facilities, Reuters reported Monday, citing a company spokesperson. Spokespeople at Nippon Yusen and Mitsui OSK Lines were not immediately available to comment when contacted by CNBC. German container shipping firm Hapag-Lloyd said it is continuing to sail through the Strait of Hormuz. 'However, the situation is unpredictable and could change within a matter of hours. In this case, our emergency and response plans, which we maintain as part of our crisis management system, come into effect,' a Hapag-Lloyd spokesperson said. Insurance costs to spike Peter Sand, chief analyst at pricing platform Xeneta, said container shipping activity in the Persian Gulf and upper Indian Ocean appears to be continuing as expected for now. 'All companies access the risk individually – but the current situation requires them all to do so several times a day. Staying in close dialogue with national intelligence agencies and their own captains onboard the ships,' Sand told CNBC by email. Insurance costs, meanwhile, have 'probably' been hiked again, Sand said, noting Iran's parliament reportedly approved the closure of the Strait of Hormuz. Any final decision to close the waterway rests with the country's national security council, and its possibility has raised the specter of higher energy prices and aggravated geopolitical tensions, with Washington calling upon Beijing to prevent the strait's closure. CNBC
