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Business Standard
2 days ago
- Business
- Business Standard
Explained: What is the new 15% US-EU tariff deal and what does it cover?
US President Donald Trump and European Commission President Ursula von der Leyen on Sunday, July 27, announced a wide-ranging trade agreement that imposes a 15 per cent tariff on most European imports into the US. The deal, which was finalised during a brief meeting at Trump's Turnberry golf resort in Scotland, averted the looming threat of a 30 per cent tariff that was set to take effect on August 1. While the headline tariff rate is fixed at 15 per cent, many of the agreement's finer details are still unclear. The deal includes zero tariffs on select 'strategic goods' such as aircraft and aircraft parts, certain chemicals, semiconductor equipment, some agricultural products, and critical raw materials. However, pharmaceuticals, steel, and some farm goods remain outside the scope of this agreement. What is not included in the deal? While the agreement removes immediate tariff threats, several issues remain unresolved. Trump confirmed that the existing 50 per cent US tariff on imported steel will stay in place. Talks will continue on setting steel import quotas and reducing overcapacity in the global market. Pharmaceuticals were not included in this agreement. Von der Leyen clarified that those discussions are ongoing, separate from Sunday's deal. Tariffs on some EU agricultural products also remain unchanged, but with no clear indication of which items are excluded. What impact will the agreement have? The 15 per cent tariff is a significant increase from the pre-Trump average US tariff of about 1 per cent on European goods and above the 10 per cent baseline tariff applied during negotiations. For European exporters, the impact could be considerable as many companies will face the difficult choice of either passing the cost on to US consumers or absorbing losses. The earlier 10 per cent tariff was already enough to prompt the European Commission to slash its growth forecast from 1.3 per cent to 0.9 per cent. Now, with 15 per cent, German industry leaders warn of 'immense negative effects' on export-reliant sectors. Von der Leyen defended the deal, calling it 'the best we could do' and noting that it secures continued access to the US market and brings a degree of stability. How are different sectors reacting, especially carmakers? The car industry, which was gearing for a 30 per cent tariff, sees the 15 per cent rate as a relief. Von der Leyen pointed out that the new rate is significantly lower than the current 27.5 per cent tariff on cars from all countries — which includes Trump's 25 per cent tariff and the pre-existing 2.5 per cent US auto tariff. Still, European automakers remain under pressure. Volkswagen revealed it had already lost $1.5 billion in profits in the first half of the year due to higher US tariffs. Mercedes-Benz, which produces a significant share of its US-sold vehicles in Alabama, said price hikes are likely for future model years. What were the key issues dividing the two sides? Before Trump's presidency, US-EU tariffs were relatively low. According to the Brussels-based Bruegel think tank, the US averaged a 1.47 per cent tariff on European goods, while the EU imposed 1.35 per cent on American products, Associated Press reported. Trump frequently criticised the $235 billion US merchandise trade deficit with the EU, calling the European market unfair — particularly in the automotive sector. However, the EU argues that the US enjoys a substantial surplus in services like cloud computing, travel, and financial services, which helps offset the imbalance. Despite Trump's stance that the EU 'was formed to screw the United States', both sides have recognised the need to preserve their trading relationship. With $2 trillion in annual commerce, the US and EU form the world's largest bilateral trading bloc. How did the deal come together? The last-minute breakthrough came just days before the US deadline to impose new tariffs. Trump and von der Leyen held brief talks at Trump's golf resort in Scotland, joined by top EU trade officials. Commerce Secretary Howard Lutnick said the August 1 deadline was firm. 'No extensions, no more grace periods,' he said. Yet he said that Trump remained open to future dialogue. The EU had prepared its own list of retaliatory tariffs targeting hundreds of US goods, including beef, auto parts, beer, and even Boeing aircraft. Without a deal, everything from French cheese to German electronics could have become more expensive for American consumers. What are the concerns going forward? While the agreement avoided an immediate trade war, analysts caution that the deal remains vague in parts. 'There is nothing on paper, yet,' said ING's global chief of macro Carsten Brzeski. He warned that the lack of formal documentation makes enforcement and interpretation difficult. German Chancellor Friedrich Merz praised the outcome for preserving 'core interests' but expressed disappointment that deeper tariff relief wasn't achieved. (With agency inputs)
New Straits Times
6 days ago
- Automotive
- New Straits Times
Japan trade deal sparks hope for US investors, frustration for automakers
DETROIT: Shares of General Motors, Ford Motor, and Jeep-maker Stellantis, some of the biggest automakers in the US, rallied on Wednesday after news of a trade deal that will reduce tariffs on imported Japanese cars, as investors saw it as a sign of more deals to come. But the companies are not celebrating. Automakers importing vehicles into the US from Japan now face a 15 per cent levy, according to terms of the deal outlined on Tuesday by US President Donald Trump, down from 27.5 per cent. GM shares rallied 9 per cent and Stellantis rose 12 per cent, as market watchers said they anticipated further agreements could reduce other trade barriers that have hurt the companies' profits. Ford shares rose about 2 per cent. The automaker is less exposed to tariffs because it produces more of its US-sold vehicles domestically. On Wednesday, the European Union and United States were nearing a trade deal that would also set a 15 per cent tariff on European imports. GM, Ford and Stellantis have been paying up to 25 per cent on vehicles imported from Mexico or Canada, depending on how much US content is in the vehicles. The companies are concerned they could soon be paying higher tariffs on vehicles assembled in Mexico or Canada than on vehicles with significantly less US content made in Japan or the United Kingdom. Some lobbyists also expressed alarm that if South Korea strikes a similar deal with the US, it could become a low-cost market to assemble cars and trucks. "They could be the new Mexico," one lobbyist told Reuters. The American Automotive Policy Council, which represents the Detroit Three, criticised the deal, saying it creates an easier path for Japanese imports than for some cars built in North America. Even before Tuesday's deal, Detroit automotive executives raised concerns that Trump's trade policy could end up giving an edge to foreign automakers who do not invest as heavily in US manufacturing. "This is a bonanza for our import competitors," Ford CEO Jim Farley said in February, when Trump initially proposed levies on Mexico and Canada, but not on major automotive centres such as South Korea. The United Auto Workers union, which represents workers at the Detroit Three automakers, said it was "deeply angered" by the deal. "What we've seen so far makes one thing clear: American workers are once again being left behind," the union said in a statement on Wednesday evening. The Japan trade announcement came the same day General Motors said tariff costs knocked US$1.1 billion from its bottom line, hurt by a battery of levies including 25 per cent taxes on imports from Canada and Mexico, and 50 per cent on steel and aluminium imports. Industry consultant and former GM executive Warren Browne said the Japan deal "put all vehicles produced in Mexico and Canada by the Detroit Three at a disadvantage" because they face higher levies than Toyota vehicles shipped in from Japan, for example. That could allow the foreign brands to undercut US car companies on price. Toyota, Subaru and Mazda are among the most reliant companies on Japan-produced vehicles for their US sales, and stand to benefit most from the lower tariffs, according to business-analytics firm GlobalData. Toyota imported roughly 500,000 vehicles from Japan last year. Japanese automotive stocks soared after the trade deal announcement. Autos Drive America, which represents those Japanese automakers along with other foreign car companies operating in the US, on Wednesday praised the trade deal, saying it would lead to further factory investment in the US. The deal is good news for Wade Kawasaki, executive chairman of the Wheel Group, a collection of aftermarket wheel, tyre and accessory companies based in California. Kawasaki said the group has been trying to break into some aspects of the Japanese market, and the lessening levies will help with that. "There is a certain group of customers who want American-made products. Those are the ones we were going to get," he said.
Business Times
6 days ago
- Automotive
- Business Times
Japan trade deal sparks hope for US investors, frustration for automakers
[DETROIT] Shares of General Motors, Ford Motor and Jeep-maker Stellantis, some of the biggest automakers in the US, rallied on Wednesday after news of a trade deal that will reduce tariffs on imported Japanese cars, as investors saw it as a sign of more deals to come. But the companies are not celebrating. Automakers importing vehicles into the US from Japan now face a 15 per cent levy, according to terms of the deal outlined on Tuesday by US President Donald Trump, down from 27.5 per cent. GM shares rallied 9 per cent and Stellantis rose 12 per cent, as market watchers said they anticipated further agreements could reduce other trade barriers that have hurt the companies' profits. Ford shares rose about 2 per cent. The automaker is less exposed to tariffs because it produces more of its US-sold vehicles domestically. On Wednesday, the European Union and United States were nearing a trade deal that would also set a 15 per cent tariff on European imports. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up GM, Ford and Stellantis have been paying up to 25 per cent on vehicles imported from Mexico or Canada, depending on how much US content is in the vehicles. The companies are concerned they could soon be paying higher tariffs on vehicles assembled in Mexico or Canada than on vehicles with significantly less US content made in Japan or the United Kingdom. Some lobbyists also expressed alarm that if South Korea strikes a similar deal with the US, it could become a low-cost market to assemble cars and trucks. 'They could be the new Mexico,' one lobbyist told Reuters. The American Automotive Policy Council, which represents the Detroit Three, criticised the deal, saying it creates an easier path for Japanese imports than for some cars built in North America. Even before Tuesday's deal, Detroit automotive executives raised concerns that Trump's trade policy could end up giving an edge to foreign automakers who do not invest as heavily in US manufacturing. 'This is a bonanza for our import competitors,' Ford CEO Jim Farley said in February, when Trump initially proposed levies on Mexico and Canada, but not on major automotive centres such as South Korea. The United Auto Workers union, which represents workers at the Detroit Three automakers, said it was 'deeply angered' by the deal. 'What we've seen so far makes one thing clear: American workers are once again being left behind,' the union said in a statement on Wednesday evening. The Japan trade announcement came the same day General Motors said tariff costs knocked US$1.1 billion from its bottom line, hurt by a battery of levies including 25 per cent taxes on imports from Canada and Mexico, and 50 per cent on steel and aluminum imports. Industry consultant and former GM executive Warren Browne said the Japan deal 'put all vehicles produced in Mexico and Canada by the Detroit Three at a disadvantage' because they face higher levies than Toyota vehicles shipped in from Japan, for example. That could allow the foreign brands to undercut US car companies on price. Toyota, Subaru and Mazda are among the most reliant companies on Japan-produced vehicles for their US sales, and stand to benefit most from the lower tariffs, according to business-analytics firm GlobalData. Toyota imported roughly 500,000 vehicles from Japan last year. Japanese automotive stocks soared after the trade deal announcement. Autos Drive America, which represents those Japanese automakers along with other foreign car companies operating in the United States, on Wednesday praised the trade deal, saying it would lead to further factory investment in the US The deal is good news for Wade Kawasaki, executive chairman of the Wheel Group, a collection of aftermarket wheel, tire and accessory companies based in California. Kawasaki said the group has been trying to break into some aspects of the Japanese market, and the lessening levies will help with that. 'There is a certain group of customers who want American-made products. Those are the ones we were going to get,' he said. REUTERS
Straits Times
23-07-2025
- Automotive
- Straits Times
Trump tariffs take $1.4 billion bite out of GM earnings
General Motors is so far keeping pricing consistent and absorbing added tariff costs rather than passing them on to customers. Bengaluru - General Motors' second-quarter earnings took a US$1.1-billion (S$1.4 billion) hit from tariffs, but the automaker still beat analyst expectations for the period on July 22, supported by strong sales of its core petrol trucks and SUVs. The largest US automaker by sales said it expects the tariff impact to worsen in the third quarter and stuck to a previous estimate that trade headwinds threaten to hit the bottom line by US$4 billion to US$5 billion in 2025. GM said it could take steps to mitigate at least 30 per cent of that impact. The automaker's revenue in the quarter ended June 30 fell nearly 2 per cent to about US$47 billion from a year ago. Its adjusted earnings before interest and taxes fell 32 per cent to US$3 billion. GM was among corporations that revised annual guidance due to the impact from US President Donald Trump's tariffs, lowering it to an annual adjusted core profit of between US$10 billion and US$12.5 billion. The company on July 22 stood by that forecast. Analysts said GM may need to cut investment in future projects or find other ways to trim spending to offset the effect of tariffs. The automaker is so far keeping pricing consistent and absorbing added tariff costs rather than passing them on to customers. The automaker imports about half of the vehicles it sells in the United States, mainly from Mexico and South Korea. GM announced in June that it would invest US$4 billion at three US facilities in Michigan, Kansas, and Tennessee, including a plan to move production of the Cadillac Escalade and increase output of its two big pickup trucks. It added production of its previously Mexico-produced Chevy Blazer to the Tennessee plant. Crosstown rival Ford produces about 80 per cent of its US-sold vehicles domestically. Ford is expected to report second-quarter results next week Top stories Swipe. Select. Stay informed. Business Singapore's digital banks finding their niche in areas like SMEs as they narrow losses in 2024 World Trump says US will charge 19% tariff on goods from Philippines, down from 20% Singapore Two found dead after fire in Toa Payoh flat Singapore 2 foreigners arrested for shop theft at Changi Airport Opinion Most companies onboard wrong – here's how to get it right Life Ozzy Osbourne, Black Sabbath's bat-biting frontman turned reality TV star, dies aged 76 Singapore Singaporeans continue to hold world's most powerful passport in latest ranking Singapore Ports and planes: The 2 Singapore firms helping to keep the world moving Jeep-maker Stellantis on July 21 warned that tariffs would significantly affect results in the second half of 2025, and said tariffs cost it about 300 million euros in the first half of the year. Beyond tariffs, GM's underlying business in the quarter was solid. Sales in the US market – its main source of profit – rose 7 per cent. GM also swung back to a small profit in China, after losing money there a year earlier. GM took several steps in recent months to bolster its combustion-engine operations through increased investment in its US factory base, calling into question its goal of ending the production of petrol-powered cars and trucks by 2035. Car companies are increasingly shifting their focus to bolstering the core lineup of petrol trucks and SUVs, as the growth rate of electric vehicle sales has slowed. Demand for battery-powered models already has slowed after rapid growth earlier this decade. The trend is intensified by the pending disappearance of government support for the battery-powered models. Sweeping tax and budget legislation approved by Congress will eliminate US$7,500 tax credits for buying or leasing new EVs and a US$4,000 used-EV credit at the end of September. Mr Trump also signed tax and budget legislation that eliminates fines for failures to meet fuel economy rules, a move that makes it easier to build more gas-powered vehicles. 'Despite slower EV industry growth, we believe the long-term future is profitable electric vehicle production, and this continues to be our north star,' GM chief executive officer Mary Barra told analysts on July 22. REUTERS
New York Post
22-07-2025
- Business
- New York Post
Is cane sugar better than high fructose corn syrup? The real health differences, as Trump applauds Coca-Cola's ‘very good move'
The US soda scene is getting a sugary shake-up. On Tuesday, Coca-Cola confirmed it will roll out a new product made with cane sugar this fall, aimed at American Coke drinkers who want to avoid high-fructose corn syrup. The announcement came in the company's quarterly earnings report, posted just a week after President Donald Trump revealed he'd been in talks with the soft drink giant about using the real sweet stuff in its US-sold colas — as it already does in countries like Mexico and the UK. Advertisement 5 Trump is a fan of Diet Coke, which contains no sugar, but rather artificial sweeteners like aspartame. AFP via Getty Images 'I have been speaking to Coca-Cola about using REAL Cane Sugar in Coke in the United States, and they have agreed to do so,' Trump, known for his love of Diet Coke, said in July 16 Truth Social post. 'This will be a very good move by them — You'll see. It's just better!' But there's one detail that might make Trump's sugar high fall flat. Coca-Cola isn't changing its classic Coke recipe. Instead, the company said its new soda will complement its existing US lineup, serving as an option alongside the original — not a replacement. Advertisement So, what's the difference between cane sugar and high-fructose corn syrup? The Post asked the experts to find out. What is cane sugar? It's derived from the sugarcane plant, a tall grass that thrives in warm climates. Cane sugar is typcally less processed than granulated sugar, which gives it a light golden color, slightly larger crystals and a stronger molasses flavor. Advertisement 'It is found in everything from baked goods to cereals to beverages, essentially anything labeled with 'sugar,' 'raw sugar,' or 'evaporated cane juice,'' Scott Keatley, a registered dietician, told Women's Health. 5 Coca-Cola already uses cane sugar in some US-sold beverages, like its lemonade. Picture Partners – What is high fructose corn syrup? It's a liquid sweetener made from corn starch. Advertisement High fructose corn syrup (HFCS) hit the market in the 1970s and took off fast. It has the same calories as other added sugars, but it's cheaper and tends to have a longer shelf life. 'HFCS is used in many products, but you won't know unless you read the nutrition labels,' Stephanie Schiff, a registered dietitian nutritionist at Northwell Huntington Hospital, told The Post. Coca-Cola made the switch to high fructose corn syrup in the US 1980s over concerns about cost and agricultural requirements, but many fans still say the real sugar version tastes better. 5 High fructose corn syrup is the dominant sweetener in many processed foods and beverages sold in the US. PR Image Factory – Which sweetener is healthier? Health and Human Services Secretary Robert F. Kennedy Jr. has made phasing out HFCS a key part of his 'Make America Healthy Again' agenda, once calling it 'poison' and criticizing it for fueling the nation's obesity and diabetes crises. But nutrition experts say the science isn't so clear-cut. 'Both cane sugar and HFCS are linked to heart disease, diabetes and other chronic diseases when consumed in excessive amounts,' Schiff said. 5 Coca-Cola is the latest company to take action on the Trump Administration's MAHA initiative. REUTERS Advertisement A 2022 study found that the two sweeteners have similar effects of weight, blood pressure and body mass index. Still, Schiff pointed to research suggesting high fructose corn syrup may be more likely to promote fat buildup in the liver and contribute to insulin resistance. One possible reason: It contains a slightly higher ratio of fructose to glucose than cane sugar. Advertisement Fructose and glucose are both simple sugars with the same number of calories, but the body processes them differently. Glucose is the body's primary fuel source. When consumed, it enters the bloodstream quickly, raising blood sugar and prompting the release of insulin, a hormone that helps cells absorb and use it for energy. 5 Coca-Cola's new drink containing cane sugar will be launched in the US in the fall. Getty Images Advertisement Fructose, on the other hand, bypasses the bloodstream almost entirely and is processed by the liver. In small amounts, that's not a problem—but in large quantities, the liver can turn excess fructose into fat, which may build up over time and interfere with insulin function. Cane sugar is made up of equal parts glucose and fructose. HFCS typically has a slightly higher fructose content, which may increase the risk of liver fat accumulation and insulin resistance. While cane sugar isn't off the hook, its lower fructose load may make it marginally less damaging in high amounts. Research has also linked HFCS to higher levels of CRP, a marker of inflammation, though Schiff noted that it had limitations. Advertisement 'The bottom line: Use less of both,' she said. 'Much less.' In the US, federal guidelines recommend keeping added sugars to under 10% of daily calories. On a 2,000-calorie diet, that means no more than 200 calories — or about 12 teaspoons, roughly 50 grams — of added sugar per day. Most Americans blow past that limit. Some estimates put average intake at 17 teaspoons a day. One 12-ounce can of Coke packs 39 grams of sugar — nearly 10 teaspoons in a single serving, according to Coca-Cola.
