France Calls for Economic Stranglehold on Russia as EU Adopts 17th Sanctions Package

Economic

Summary:

French Foreign Minister Jean-Noel Barrot has urged the European Union to tighten sanctions against Russia to the point of “permanently crippling” its economy, as Moscow and Kyiv consider peace talks in Istanbul....

France Presses for Harsher Measures Amid Stalemate

Following the adoption of the European Union’s 17th sanctions package against Russia, France’s Foreign Minister Jean-Noel Barrot declared it is time to escalate punitive actions significantly. In an interview with BFM TV, Barrot acknowledged that existing sanctions have failed to deter Moscow’s war in Ukraine, stressing that only a severe expansion of economic pressure—executed in coordination with the United States—can bring Russian President Vladimir Putin to the negotiating table.

“This is the 17th sanctions package we’ve adopted,” Barrot stated. “We must go further. The sanctions so far have not stopped the war. We need to prepare for more devastating measures capable of permanently crippling Russia’s economy.”

New Measures Target Military-Linked Entities and Dual-Use Goods

The new EU sanctions include restrictions on 30 companies involved in dual-use goods trading and 75 individuals or organizations linked to Russia’s defense-industrial complex. Russian oil tankers are also targeted under the latest framework. These additions build on previous efforts to sever Russia’s access to Western technology and revenue streams, particularly in sectors vital to its military logistics and energy exports.

The timing is significant. These announcements coincide with tentative plans for the first direct peace talks between Moscow and Kyiv since 2022, set to take place in Istanbul. Yet European leaders remain skeptical of a breakthrough unless new, more coercive economic measures are enacted.

French Push Aligns with U.S. Legislative Initiative

Barrot will represent France at the upcoming NATO foreign ministers’ summit in Turkey, where he plans to meet U.S. Senator Lindsey Graham. The senator is currently drafting a U.S. sanctions bill that would impose a staggering 500% tariff on any country importing Russian oil—a move designed to disincentivize neutral or opportunistic actors from engaging in trade with Moscow.

The proposed American measure would effectively function as a secondary sanction regime, forcing international energy markets to choose between access to U.S. trade and Russian oil. Barrot expressed support for the proposal, seeing it as a critical component in closing enforcement gaps that have allowed Russia to reorient its exports toward Asia and circumvent Western sanctions.

Sanctions Consensus Still Elusive Within EU

Despite France’s assertive position, achieving consensus within the 27-member EU remains a formidable challenge. While several northern and eastern European states support stronger sanctions, others remain wary of domestic economic fallout, especially in the energy and banking sectors.

Diplomats expect negotiations over the expanded sanctions to take weeks, with major stumbling blocks likely in areas such as cross-border energy financing, export controls, and dual-use industrial regulations. Even if the framework is agreed upon, full implementation may require U.S. backing and synchronized enforcement through transatlantic coordination.

France’s demand for more aggressive sanctions reflects a broader belief within the EU that only economic asphyxiation can meaningfully shift Russia’s war calculus. As the Istanbul peace talks approach, Western leaders appear increasingly inclined to use the threat of economic ruin not just as a punishment, but as a precondition for genuine diplomacy. Whether this strategy will succeed hinges not only on European unity but on Washington’s willingness to extend its punitive measures beyond national borders.

Source: Reuters

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Gerik

Economic

Retailers Shift Tactics Amid Trade Policy Uncertainty

As the Trump administration imposes fresh tariffs on imported goods, major global retailers are being forced to rapidly adapt. Companies like Pandora, Puma, Hugo Boss, Adidas, Shein, and Temu are reassessing product pricing, supply chain configurations, and consumer demand projections. These changes underscore a broader strategic recalibration, aimed at managing cost inflation and geopolitical volatility.

Alexander Lacik, CEO of jewelry giant Pandora, warned that price increases are inevitable if tariffs remain in place. With much of the industry reliant on Asian manufacturing, companies across the board—particularly in fashion and consumer goods—are preparing to pass costs down the value chain.

Sportswear brand Puma is considering price adjustments in the U.S. market and evaluating cost-cutting options, while CFO Markus Neubrand emphasized that the company is monitoring competitors before committing to increases. Meanwhile, Hugo Boss is looking to diversify sourcing beyond China, though it acknowledges that softening U.S. consumer demand and fears of recession are compounding trade-related pressures.

E-Commerce Giants Face End of Tax-Free Loopholes

Chinese online retailers Shein and Temu, both of which built their U.S. models around exploiting the “de minimis” exemption for small packages under $800, are particularly affected. The U.S. recently ended this exemption and replaced it with a reduced 54% tax (down from 120%), eliminating the tax-free model that previously gave these platforms a competitive edge.

The loss of this loophole is prompting price hikes across their platforms, a move that risks alienating their core low-income and price-sensitive customer base in the U.S. market.

Consumers Bear the Brunt

The latest data and industry reactions confirm a clear trend: businesses are increasingly shifting tariff costs onto consumers. A survey by EY revealed that two-thirds of executives plan to raise prices to absorb the impact of tariffs. A separate poll in Texas found that 76% of manufacturers were preparing to do the same.

David Loftus, President of the U.S. Electronic Components Association, noted that few companies have the margin space to absorb such high tariffs. "Manufacturers will push the cost to distributors, who will eventually pass it on to consumers," he said.

Major firms like Stanley Black & Decker and Procter & Gamble have already raised prices this year. P&G, maker of brands like Tide and Old Spice, cited policy instability as a driver of unavoidable cost adjustments. Adidas also confirmed that persistent high tariffs would result in elevated product prices in the U.S.

Despite April’s Consumer Price Index (CPI) easing to 2.3% year-over-year, down slightly from March’s 2.4%, core inflation risks are rising. Goldman Sachs forecasts that the PCE core inflation rate could rise to 3.8% by year-end, suggesting that consumer price pressures may intensify, especially in electronics and fashion—categories that heavily depend on Asian imports.

The burden is expected to fall hardest on low- and middle-income households. A study by the Center for American Progress estimates tariffs could cost U.S. households an additional $5,200 annually—eroding purchasing power across essential and discretionary spending alike.

A Fragile Truce: U.S.-China Agreement Offers Only Temporary Relief

The recent Geneva summit between U.S. and Chinese negotiators yielded a temporary 90-day tariff reduction. Under the deal, U.S. tariffs on Chinese goods dropped from 145% to 30%, while Chinese tariffs on American imports fell from 125% to 10%. The agreement included the establishment of a bilateral economic dialogue mechanism, signaling a potential path forward.

While this development helped stabilize financial markets and lifted investor sentiment, industry voices remain skeptical. The truce, though welcome, does not reverse the longer-term shift in U.S. trade posture, nor does it eliminate the risk of renewed escalation this autumn when the tariff reprieve expires.

Retailers and manufacturers continue to treat the policy environment as volatile and are building long-term strategies accordingly. These include reshoring supply chains, diversifying suppliers, and adjusting pricing models in anticipation of prolonged uncertainty.

The renewed tariff measures by the U.S. are reshaping retail strategies worldwide, compelling firms to raise prices, reconfigure supply chains, and brace for reduced consumer demand. The interim trade truce between Washington and Beijing has offered only temporary relief. As U.S. households confront higher prices and declining affordability, especially for low-cost imports, the political narrative that “other countries will pay” is increasingly contradicted by on-the-ground economic realities. Without lasting policy resolution, retail and consumer pain may deepen in the months ahead.

Source: Reuters

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Olivia Brooks

Economic

The euro zone economy grew slower in the first quarter than initially estimated but employment held up well, indicating that the bloc keeps creating jobs despite years of anaemic expansion, data from Eurostat showed on Thursday.

Gross domestic product in the first three months grew by 0.3%, below an initial estimate for 0.4%, but that was still an improvement on previous quarter as industry finally expanded and employment growth also picked up.

Compared with a year earlier, the bloc's economy expanded by 1.2%, the same as three months earlier, broadly in line with what the ECB considers the bloc's potential.

While the euro zone has consistently underperformed the U.S. in recent years, the 0.3% quarterly growth rate is far better than the 0.3% contraction reported in the U.S., which in great part was a reflection of surging imports ahead of tariffs.

Euro zone employment, meanwhile, expanded by 0.3% compared with the previous quarter, the highest figure in four quarters, likely easing fears that weak growth could finally prompt firms to start shedding workers.

Unemployment has been holding at record lows all year, confounding some expectations that, with no prospect for a meaningful rebound in growth, firms could reassess their plans to keep hanging on to workers.

Among the bloc's biggest economies, Germany grew by 0.2%, France by 0.1%, Italy by 0.3% and Spain by 0.6% compared to the previous quarter.

Source: Yahoo Finance

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China–U.S. Trade War

Economic

Rare Earths as Strategic Leverage in Trade Diplomacy

On May 15, China’s Ministry of Commerce announced a 90-day suspension of export restrictions targeting products with both civilian and military applications, including critical rare earth elements. This decision applies to 28 American companies and follows a major breakthrough in Geneva where China and the U.S. agreed to temporarily lower import tariffs—marking a key de-escalation in their prolonged trade conflict.

China has long dominated the global supply of rare earths and previously used these materials as a strategic tool in response to geopolitical tensions. The suspended restrictions are part of a wider maneuver aimed at reshaping negotiations without immediately disrupting global supply chains.

Strategic Elements and Global Supply Chain Risks

The paused restrictions likely include seven rare earths—samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium—essential for the production of semiconductors, electric vehicles, aerospace technologies, and precision weapon systems. These materials were listed in Beijing’s April export control measures, which had sparked concern across Western industries.

Under the new arrangement, companies can now apply for export licenses during the 90-day window. While this doesn’t guarantee continued access, it signals China’s willingness to use flexibility in strategic resource control to gain leverage in trade discussions.

Markets React with Optimism

Financial markets responded positively to the announcement. The U.S. dollar strengthened, and global stock indices rallied as investors welcomed signs of reduced U.S.-China tension. President Donald Trump described the agreement as “a brand-new beginning” for bilateral relations, emphasizing the potential for further cooperation.

In addition, the Chinese Ministry of Commerce issued a separate notice temporarily lifting trade and investment restrictions on 17 additional U.S. companies—another gesture seen as conducive to constructive negotiations.

A Pause, Not a Policy Shift

While the suspension offers a diplomatic opening, it does not signal a fundamental change in China’s approach to trade or national security. The dual-use nature of the affected goods means Beijing retains the option to reintroduce controls should talks falter.

At the same time, the U.S. has retained key pressure points—including high tariffs on sensitive imports and demands for Chinese action on fentanyl exports and market access. The current reprieve buys time, but the underlying strategic rivalry remains unresolved.

China’s move to suspend rare earth export bans is a calculated gesture designed to restart talks without weakening its position. As trade negotiations resume, businesses and governments alike will be watching closely to see whether this shift leads to a durable reduction in tensions—or merely postpones the next round of economic confrontation.

Source: AP

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Michelle

Economic

Commodity

The IEA has nudged up its global oil demand growth forecasts for this year and 2026, citing better macroeconomic forecasts and the effects of lower oil prices.

In its latest Oil Market Report (OMR), published today, the Paris-based watchdog raised its projected increase in oil consumption by 20,000 b/d to 740,000 b/d in 2025, bringing overall demand to 103.9mn b/d.

It increased its oil demand growth forecast for 2026 by 70,000 b/d to 760,000 b/d.

In its previous OMR the IEA cut its oil demand forecasts for 2025 by 310,000 b/d after the US' announcement of an array of import levies in April. But the IEA said today the tariff supply shock appeared less severe than initially implied, pointing to subsequent US trade arrangements with the UK and China. US talks with other countries continue.

"Subsequent pauses, concessions, exemptions and negotiations are likely to attenuate the levies' permanence and economic impact," the IEA said.

But it said policy uncertainty continued to weigh on consumer and business sentiment, and it sees oil consumption growth slowing to 650,000 b/d between now until the end of 2025, from 990,000 bd/ in the first quarter of the year.

Its demand growth forecast for 2025 is 320,000 b/d lower than at the start of the year.

The IEA increased its global oil supply growth forecast by 380,000 b/d to 1.61mn b/d in 2025, with almost all the rise accounted for by the Saudi-led unwinding of Opec+ cuts. It nudged its oil supply growth forecast for 2026 up by 10,000 b/d to 960,000 b/d.

Eight Opec+ members earlier this month agreed to continue accelerating the pace of their planned unwinding of 2.2mn b/d of crude production cuts for June.

The IEA again revised down its supply growth forecasts for the US, mainly because of the effects of lower oil prices on US shale producers. It downgraded US growth by 50,000 b/d to 440,000 b/d for 2025 and by 100,000 b/d to 180,000 b/d for 2026, and said US tight oil production in 2026 would contract on an annual basis for the first time since 2020.

The IEA said sanctions on Russia, Iran and Venezuela are a key uncertainty in its forecasts. It noted that Russian crude supply grew by 170,000 b/d in April as crude prices fell below the G7 $60/bl price cap.

The IEA's balances show supply exceeding demand by 730,000 b/d in 2025 and by 930,000 b/d in 2026. It said global observed stocks rose by 25.1mn bl in March, with preliminary data showing a further rise in April.

Source: Argus Media

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Russia-Ukraine Conflict

A Strategic Blend of Authority: Russia’s Delegation Unpacked

Late on May 14, the Kremlin named the officials set to represent Russia in proposed peace talks with Ukraine in Istanbul. Though President Vladimir Putin will not attend in person, the composition of his delegation sends a clear message: Moscow is approaching negotiations with a calculated mix of propaganda control, intelligence expertise, military influence, and diplomatic maneuvering. The appointment of key figures from past talks and strategic operations reflects both continuity and escalation in Russia’s approach to war diplomacy.

Heading the delegation is Kremlin aide Vladimir Medinsky, a former culture minister and a central figure in the failed 2022 peace negotiations. Born in Soviet Ukraine and a graduate of MGIMO—Russia’s elite foreign affairs university—Medinsky is also the architect of Russia’s revamped history education agenda. He chairs the Russian Military Historical Society, known for promoting nationalist interpretations of Russian history. His role signals an ideological component to the talks, in which Russia may seek to justify its war aims through cultural and historical framing.

Mikhail Galuzin – The Regional Diplomat

Deputy Foreign Minister Mikhail Galuzin brings extensive experience in post-Soviet regional diplomacy, overseeing relations with the Commonwealth of Independent States (CIS). Fluent in Japanese and English, Galuzin adds diplomatic breadth to the delegation. His presence reflects Russia’s intent to position the war within a broader geopolitical struggle involving former Soviet republics.

Igor Kostyukov – The Intelligence Operator

The appointment of Igor Kostyukov, head of the GRU (now GU), underscores the intelligence dimension of the talks. As the first naval officer to lead the powerful agency, his inclusion suggests a strong emphasis on strategic and military intelligence. Kostyukov’s role also likely includes internal risk monitoring and coordination of security narratives presented during negotiations.

Alexander Fomin – Military Liaison with Negotiating Experience

Deputy Defence Minister Alexander Fomin previously participated in 2022 negotiations and will reprise his role. A seasoned intermediary between military operations and diplomatic channels, Fomin provides a bridge between battlefield developments and policy objectives. His familiarity with past negotiation dynamics may help ensure continuity in Russia’s tactical messaging.

Expert Team: Tactical Minds and Humanitarian Covers

Alongside the high-profile officials, Putin has approved a team of technical and advisory experts:

Alexander Zorin, a military reconciliation specialist and deputy chief of information in the General Staff, brings expertise from Syria, indicating Russia's desire to position itself as a broker capable of managing both conflict and diplomacy.

Yelena Podobreyevskaya, a key figure in the Kremlin’s humanitarian policy directorate, is likely included to present a softer façade—emphasizing non-military elements of Russia’s war narrative.

Alexei Polishchuk, director of the Foreign Ministry’s CIS department, manages portfolios involving Ukraine, Belarus, and Moldova. His experience will be critical for managing post-conflict territorial and political arrangements.

V. Shevtsov, deputy head of international military cooperation, represents Russia’s interest in framing the talks within a global military strategic context, likely aimed at countering NATO narratives.

Though absent from the table himself, Putin’s delegation reflects a hybrid strategy: part ideological assertion, part military posturing, and part regional bargaining. The inclusion of intelligence chiefs and military officials suggests that the Kremlin does not view the Istanbul talks as merely symbolic. Instead, it seeks to shape the peace process with hard power and controlled messaging. The broader implication is that Russia’s tactical presence at the talks may serve less to compromise and more to reinforce its long-term positioning in Ukraine and beyond.

Source: Reuters

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Glendon

Economic

President Donald Trump said India has made an offer to drop tariffs on US goods, as the Asian nation seeks an agreement on import taxes.

Speaking Thursday at an event with business leaders in Qatar, Trump said the Indian government has “offered us a deal where basically they are willing to literally charge us no tariff.”

Trump did not offer further details of New Delhi’s apparent offer and the Indian government did not immediately respond to a request for comment.

The US president also said he spoke with Apple Inc. Chief Executive Officer Tim Cook to discourage him from expanding production in India.

“I said I don’t want you building in India,” Trump said about a conversation he said he had with Cook.

As a result of their discussion, Trump said Apple will be “upping their production in the United States.”