Trump Unveils 25% Tariffs on Goods From Japan, South Korea in Letters to Leaders

Economic

China–U.S. Trade War

Summary:

About 12 countries will receive letters from Trump, White House spokeswoman Karoline Leavitt said at a briefing without identifying them.

President Donald Trump said on Monday the U.S. would impose a 25% tariff on imports from Japan and South Korea beginning Aug. 1 as he unveiled the first two of an expected 12 letters to trading partners outlining the new levies they face.

"If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 25% that we charge," Trump said in letters to the leaders of the two Asian countries, which he posted on his Truth Social platform.

Later, Trump also announced the U.S. will impose 25% tariffs on Malaysia and Kazakhstan, 30% on South Africa and 40% on Laos and Myanmar.

The rate for South Korea is the same as Trump initially announced on April 2, while the rate for Japan is 1 point higher than first announced. A week later, he capped all of the so-called reciprocal tariffs at 10% until July 9 to allow for negotiations. Only two agreements have so far been reached, with Britain and Vietnam.

There was no immediate response from the Japanese or South Korean embassies on the announcement.

About 12 countries will receive letters from Trump, White House spokeswoman Karoline Leavitt said at a briefing without identifying them. She said Trump would sign an executive order on Monday formally delaying the July 9 deadline to August 1.

"There will be additional letters in the coming days," Leavitt said, adding that "we are close" on some deals.

The European Union will not be receiving a letter setting out higher tariffs, EU sources familiar with the matter told Reuters on Monday.

U.S. stocks fell in response, the latest market ruction since Trump unleashed a global trade war on his return to office in January. His moves have repeatedly whipsawed financial markets and sent policymakers scrambling to protect their economies.

U.S. stocks were driven to near bear-market territory by his cascade of tariff announcements through the early spring but quickly rebounded to record highs in the weeks after he put the stiffest levies on hold on April 9.

The S&P 500 on Monday was down nearly 1%, its biggest drop in three weeks. U.S.-listed shares of Japanese automotive companies fell, with Toyota Motor down 4.1% at mid-afternoon trading and Honda Motor off by 3.8%. The dollar surged against both the Japanese yen and the South Korean won.

U.S. Treasury Secretary Scott Bessent said earlier on Monday he expected several trade announcements to be made in the next 48 hours, adding that his inbox was full of last-ditch offers from countries to clinch a tariff deal by the deadline.

Bessent did not say which countries could get deals and what they might contain. Trump has kept much of the world guessing on the outcome of months of talks with countries hoping to avoid the hefty tariff hikes he has threatened.

Countries have scrambled to hammer out deals before the Wednesday deadline. South Korea and Indonesia dispatched representatives to Washington, while Thailand submitted a new trade proposal offering zero tariffs on many U.S. goods.

"We've had a lot of people change their tune in terms of negotiations. So my mailbox was full last night with a lot of new offers, a lot of new proposals," Bessent said in an interview with CNBC. "So it's going to be a busy couple of days."

BRICS THREAT

For its part, the European Union still aims to reach a trade deal by July 9 after European Commission President Ursula von der Leyen and Trump had a "good exchange," a Commission spokesperson said.

It was not clear, however, whether there had been a meaningful breakthrough in talks to stave off tariff hikes on the United States' largest trading partner.

Adding to the pressure, Trump threatened to impose a 17% tariff on EU food and agriculture exports, it emerged last week.

Trump had said on Sunday the U.S. was close to finalizing several trade pacts and would notify other countries by July 9 of higher tariff rates. He said they would not take effect until Aug. 1, a three-week reprieve.

He also put members of the developing nations' BRICS group in his sights as its leaders met in Brazil, threatening an additional 10% tariff on any BRICS countries aligning themselves with "anti-American" policies.

The new 10% tariff will be imposed on individual countries if they take anti-American policy actions, a source familiar with the matter said.

The BRICS group comprises Brazil, Russia, India and China and South Africa along with recent joiners Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates.

Trump's comments hit the South African rand.

EU SEEKS EFFECTIVE APPROACH TO TRUMP

The EU has been torn over whether to push for a quick and light trade deal or back its own economic clout in trying to negotiate a better outcome. It had already dropped hopes for a comprehensive trade agreement before the July deadline.

"We want to reach a deal with the U.S. We want to avoid tariffs," the spokesperson said at a daily briefing.

Without a preliminary agreement, broad U.S. tariffs on most imports would rise from their current 10% to the rates set out by Trump on April 2. In the EU's case, that would be 20%.

Von der Leyen also held talks with the leaders of Germany, France and Italy at the weekend, Germany said. Chancellor Friedrich Merz has repeatedly stressed the need for a quick deal to protect industries vulnerable to tariffs ranging from cars to pharmaceuticals.

The German spokesperson said the parties should allow themselves "another 24 or 48 hours to come to a decision."

Germany's Mercedes-Benz (MBGn.DE), said on Monday its second-quarter unit sales of cars and vans had fallen 9%, blaming tariffs.

Russia said BRICS was "a group of countries that share common approaches and a common world view on how to cooperate, based on their own interests."

"And this cooperation within BRICS has never been and will never be directed against any third countries," said Kremlin spokesman Dmitry Peskov.

Source: Reuters

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Risk Warnings and Disclaimers

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Adam

Forex

Two European Central Bank (ECB) officials last week expressed concern that the rise of the euro could further weaken the still-recovering eurozone economy, while US tariffs of 10% on European exports now seem inevitable.

Since the beginning of the year, the eurodollar has risen 14% and reached its highest level since September 2021.

Investors seem keen to reduce their exposure to the dollar in the face of Donald Trump's unpredictable economic policy. At the same time, Germany's fiscal stimulus and rising military budgets in Europe have boosted the euro's appeal.

"We can manage up to 1.20"

Nevertheless, the currency's rapid rise is beginning to make the ECB uncomfortable. While a strong euro is a sign of market confidence and reduces imported inflation, there is also a downside. A more expensive currency weighs on exports by making them less competitive.

The rise of the euro could therefore end up weighing on growth. This is particularly true given that the eurozone relies heavily on exports. "If you combine a 10% tax (customs duties) with a more than 10% appreciation of the exchange rate, that is enough to impact export momentum," warned Martins Kazaks, governor of the Latvian central bank, on the sidelines of the ECB's annual monetary policy forum in Sintra, Portugal.

European leaders are now preparing for a 10% tax on exports to the US to become a reality. Long opposed to any form of customs duties, Europe now seems ready to accept a compromise: a 10% tax, with certain exemptions for key sectors.

These risks to growth are therefore causing the ECB to worry about the rise of the euro. "We can manage a rise in the euro to $1.20. Beyond that, it will become much more complicated," ECB Vice President Luis de Guindos said last week on Bloomberg TV.

This appreciation of the euro could push the ECB to lower interest rates further. After eight consecutive cuts that brought the deposit rate to 2%, the neutral level, the ECB is expected to pause in July.

However, further adjustments are possible between now and the end of the year. With inflation back on target, the ECB could ease monetary policy slightly. Most strategists still anticipate one or two rate cuts in 2025.

The consensus is always wrong

This movement in the eurodollar certainly took investors by surprise. In the wake of Donald Trump's election last November, the rise of the dollar was fairly widely expected and many imagined a return of the eurodollar to parity. At the beginning of the year, the 1.02 level was reached, before the momentum reversed completely.

The rationale behind this reasoning is that tariffs are inflationary in nature. Higher inflation means higher interest rates and therefore a stronger dollar.

At the end of last year, the central scenario for tariffs was a universal rate of 10%, which was to be largely offset by currency adjustment (the rise of the dollar).

But today, Europe has to contend with a eurodollar that has gained 14% since the beginning of the year and, most likely, 10% tariffs. This is a much less favorable scenario for growth.

source : marketscreener

Risk Warnings and Disclaimers

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Jason

Central Bank

New Zealand’s central bank is expected to keep interest rates on hold this week amid uncertainty over the inflation outlook while leaving the door open to further easing if needed to bolster the weak economy.

The Reserve Bank’s Monetary Policy Committee will leave the Official Cash Rate at 3.25% Wednesday in Wellington, according to 19 of 23 economists surveyed by Bloomberg. Four predict a quarter-point reduction, while investors are pricing a 13% chance of a cut.

“We see the net data flow since May as dovish, easily justifying a cut,” said Sharon Zollner, chief New Zealand economist at ANZ Bank in Auckland. “Indeed, we think the RBNZ should cut. However, on balance we think the Committee will decide it is prudent and low-cost to wait for more data on inflation – and inflation expectations – before cutting in August.”

The RBNZ has slashed its benchmark by 225 basis points since August last year, and said in May that the full impact of that easing has yet to flow through to households. While recent indicators suggest economic growth is sluggish, inflation has quickened to 2.5% and policymakers are wary of price expectations lifting again.

The RBNZ will publish its decision at 2 p.m. local time Wednesday. Because it is a rate review rather than a Monetary Policy Statement, there is no press conference and the bank won’t update its economic forecasts.

The Reserve Bank of Australia, which is less advanced in its easing cycle than the RBNZ, is expected to lower its cash rate by 25 basis points to 3.6% later today.

After delivering a sixth straight cut on May 28, RBNZ Governor Christian Hawkesby said policymakers no longer had an explicit easing bias and a reduction in July was “not a done deal.” One unidentified member of the six-strong MPC also voted against a cut at that meeting.

The RBNZ nevertheless lowered its forecast track for the OCR, suggesting it sees a chance of the benchmark falling below 3% later this year or early in 2026.

Investors are betting on a cut to 3% in coming months and see a 60% chance of one further reduction next year, swaps data show.

While the economy posted better-than-expected growth of 0.8% in the first quarter and business confidence is improving, the housing and labor markets remain soft and global uncertainty around US tariffs is clouding the outlook.

Economists predict that growth slowed in the second quarter. The manufacturing and services industries contracted in May and a majority of firms reported a reduction in their own trading in the three months through June, according to a business survey.

“We continue to believe the economy requires lower interest rates ahead and we still forecast a 2.75% OCR low point,” said Doug Steel, senior economist at Bank of New Zealand in Wellington.

The latest string of weak data probably won’t be enough to “spook the MPC into continuing its easing cycle on Wednesday,” he said. “But the rapid loss of momentum adds to the case that further rate cuts will be required in due course.”

Source: Bloomberg Europe

Risk Warnings and Disclaimers

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Adam

Economic

President Trump's trade plans are likely to be significantly clearer by the end of this week, with the president announcing that "UNITED STATES TARIFF Letters" will begin being delivered at 12 noon ET today and his team promising several new agreements by the end of the week.

But an array of parallel comments from the president on down have also underlined to markets that this week is unlikely to provide finality on the Trump trade agenda.

That's because even as Trump talks about being largely "done" on July 9, trade talks appear primed to continue unabated in the weeks ahead as his team acknowledges that ambitious early plans to finalize a wide array of trade deals around the world by this week haven't panned out.

"The financial markets, understandably, may be confused," Greg Valliere of AGF Investments noted in a letter to clients, adding: "Get used to this."

The back-and-forth comes as Treasury Secretary Scott Bessent promised Monday on CNBC that several trade deals will be announced in the next 48 hours, saying, "We've had a lot of people change their tune in terms of negotiations."

Other countries that are further from a deal could see unilateral tariff hikes, but they appear to have additional weeks to negotiate before any duties actually change on Aug. 1.

Trump revealed this new Aug. 1 deadline last week. "They'll start to pay on Aug. 1," he told reporters Friday of his still-to-be-unveiled letters. "The money will start to come into the United States on Aug. 1."

The situation is similar as negotiations with major trading partners continued, and those negotiations are primed to see some combination of a letter or a deal this week — but again, with finality unlikely.

At least one Trump aide offered a signal on Sunday that talks won't be ending. Stephen Miran, chair of Trump's Council of Economic Advisers, said on ABC's "This Week" that if a country is negotiating in good faith, "but the deal is just not there yet because it needs more time, my expectation would be that those countries get the date rolled."

Other aides have offered similar messages, with Secretary Bessent previously talking about having trade issues "wrapped up by Labor Day" and Trump reminding that "we can do whatever we want."

And Trump has continued to bring other issues into the trade talks, such as an announcement Monday morning that he planned to use a 10% tariff to dissuade nations from lining up against him through an intergovernmental organization comprising 10 countries known as BRICS.

What it means for markets

The push for deals this week also comes after Trump has scored a series of wins in recent weeks that could strengthen his hand. They range from signing his megabill into law to muted signs of tariff inflation thus far to increased influence overseas that led to a recent spending hike at NATO.

But trade has proved more difficult. Trump has announced framework agreements so far with the likes of the UK and Vietnam, but other deals with key trading partners such as the European Union, India, Japan, and others are very much up in the air.

Trump has lessened tensions with China, and negotiations between the world's two largest economies are now facing a separate early August deadline.

As for what it means for markets, the effects of continued uncertainty could be muted. Capital Economics' Thomas Mathews wrote Monday morning that "despite the uncertainty about tariffs, we continue to expect US markets — especially equities and the dollar — to rally."

The economic effects of tariffs — so far, at least — have proven less dramatic on inflation. And traders have become less reactive to Trump's trade pronouncements, noting he has proven to blink in the face of economic turmoil and often changes his mind later anyway.

As Edward Yardeni, president of Yardeni Research, put it in a recent note: "In recent weeks, many investors bought stocks as they stopped panicking over Trump's trade war."

source : finance.yahoo

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Risk Warnings and Disclaimers

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Adam

Commodity

While the U.S. markets face numerous economic and geopolitical stressors, the prices for gold have proven extremely resilient, emphasizing the yellow metal's prized reputation as a haven asset. As the 10-year Treasury note yield has reached as high as 4.3715%, investors are intensely seeking the signal for stability in the face of growing concerns regarding trade hostilities, fiscal imbalances, and a rising dollar. In the following, we examine the key drivers in the price of gold as the United States reaches a crossroads in fiscal policy and the dynamics in the global marketplace.

Tariff turbulence comes as a double-edged sword

Both the United States and trading nations are caught in a trade standoff as President Donald Trump's threat of tariffs hangs ominously after August 1, which had already been delayed from July 9. In this atmosphere of uncertainty, investors have flocked towards the United States dollar, which remains one such safe haven currency. Generally, when the dollar strengthens, it puts downward pressure on the price of gold and poses challenges for foreign investors.

However, the story so far has been anything but uneven. Even as the dollar has reflected strength, the precious metal gold has held steady above $3,300 per ounce, marking its continued status as a significant hedge against the upcoming apprehensions regarding trade wars and possible stagflation. Ahead of the release of the minutes of the Federal Open Market Committee (FOMC), market participants remain nervous and look towards signs regarding the attitude of the Federal Reserve towards monetary tightening, which may chart the future course of gold prices.

Musk's political dance sends mixed signals

It has brought in another dimension of unpredictability in the future prospects for the market. Establishing the "America Party," and publicly criticizing tariffs and promoting Bitcoin has raised eyebrows in investor circles. Musk promoting market-oriented principles in sharp contrast to Trump's policy of protectionism has come as a matter of grave concern for the future prospects for the economy in the United States.

In the gold universe, this ideological conflict introduces some unpredictability. While volatility fueled by tariffs is encouraged in Trump’s policy, Musk’s free trade push and his adherence to digital currencies like Bitcoin go against conventional practices and can complicate gold’s role as a hedge, potentially. As investors weigh Musk’s influence in the midst of the turbulence in tariffs, the market in gold may encounter increased volatility, especially if his political campaign begins to gain traction.

Safe-haven demand versus dollar strength

Gold's 2025 first half behavior demonstrates its double function as both storage medium and haven in difficult times. The yellow precious metal has rallied with an impressive 25% increase driven by rising fears about the United States fiscal deficit and dangers posed by ongoing trade tensions. Against a backdrop in which inflationary risks and tariff risks loom larger, gold's attraction becomes especially vivid, serving as haven protective refuge in the face of possible turbulence in the economy.

However, the advancing dollar, which has gained momentum with robust employment numbers, namely 147,000 nonfarm payrolls in June, continues to deter gold gains. As the dollar gains traction, tough times await gold. But if the war over tariffs gains momentum, gold will again gain a boost, especially as fears about stagflation and the trade war intensify.

It's all about Central Banks and ETFs. Central banks remain upbeat about gold, as they had amassed 20 tonnes of fresh holdings in May 2025. This stunning number confirms their long-term faith in gold as insurance against future economic turbulence. By contrast, redemptions in ETFs dropped 19 tonnes in the same period. Those redemptions reflect short-term fears of some investors, which include fears about the economy in the very short term.

Musk's potential United States gold reserve audit may set market rumblings in motion, particularly if fears about the United States dollar's strength and the validity of the country's gold reserves start growing in earnest. This panic about national reserves may increase demand for gold as investors seek a haven for funds.

Contours of Geopolitical

The geopolitical chessboard greatly influences the destiny of gold. Threats by Trump about tariffs, and most recently the expected 10% rise in imports coming in from BRICS nations, have greatly increased the status of gold as a haven. Speculation about Chinese and other retaliatory actions increases the uncertainty in the global marketplace and creates an environment in which gold can truly shine during market instability.

In sharp contrast, Musk's plan for creating a tariff-free bloc between the U.S. and Europe may bring into play an entirely new set of dynamics. Though this agreement would ease trade challenges with Europe, it may heighten trade relationships with China and other major economies, creating increasingly complex geopolitical issues. As a result, the status of gold as a haven asset will probably be enhanced by these fleeting stresses.

Price Action

The price of the shinning metal continues to look bullish and the below chart shown important price levels for the shining metal

Gold prices: navigating a turbulent landscape amid global uncertainty_1

Conclusion

In 2025, the value of gold is determined by a combination of fiscal volatility, geopolitical conflict, and market dynamics' ever-shifting currents. Presidential candidate Donald Trump's policy of tariffs and Elon Musk's political grandstanding bring a certain volatility to the investor landscape. As the United States dollar continues the steady pressure towards prices for gold, its role as a hedge against coming trade war and potential stagflation takes hold and helps maintain value. As market currents shift with dizzying rapidity, gold remains a cornerstone asset for investors looking towards stabilizing a volatile economy.

Where should investors' attention go? US Fiscal Policy: Be alert for upcoming FOMC minutes, which will provide insights into possible shifts in US monetary policy and insights into the future directions in the value of the dollar and the future price movement in gold. Geopolitical News: One must keep alert for any new commentary regarding tariffs, especially considering the growing tensions with China and the BRICS countries. This news could greatly increase the attractiveness of gold. Central Bank Activity: Pay close attention to the purchasing behavior of central banks, particularly as they continue with their gold acquisition. Any shift in this trend may signal the shift in global economic mood.

Source: kitco

Risk Warnings and Disclaimers

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Devin

Economic

U.S. main equity indexes, the S&P 500 and Nasdaq, fell to session lows after the Trump administration released tariff letters to a handful of countries, citing "persistent trade imbalances" and the failure to reach trade deals before the July 9 deadline. The tariffs are expected to take effect on August 1.

The first two trade letters were sent to South Korea and Japan, imposing a 25% tariff on all goods, effective August 1.

Here are the key points from the letter addressed to South Korea that was posted on President Trump's Truth Social page:

The U.S. views the trade relationship as unbalanced and non-reciprocal.
The 25% tariff applies to all Korean goods, unless they are produced within the U.S.
The tariff is separate from sectoral tariffs and will be increased if Korea retaliates with its own tariff hikes.
The U.S. encourages Korea to open its markets and remove trade barriers—offering a possible tariff reduction if this happens.
The trade deficit is framed as a national security threat.

Full Letter US Sent South Korea

Here are the key points from the letter addressed to Japan that that was posted on Trump's Truth Social page:

A 25% tariff will be imposed on all Japanese products entering the U.S. starting August 1, 2025.
This tariff applies separately from all existing sectoral tariffs.
The U.S. cites Japan’s tariffs, non-tariff policies, and trade barriers as causes of a persistent and unsustainable trade deficit; The U.S. claims the relationship has been non-reciprocal for too long.
No tariffs will apply if Japanese companies manufacture products within the U.S.
If Japan raises its tariffs, the U.S. will add that amount to the existing 25% tariff.
The U.S. expresses willingness to reconsider or adjust tariffs if Japan opens its markets and removes trade barriers.

Full Letter US Sent To Japan

The instant reaction in U.S. markets was traders hitting the 'sell button,' with the S&P 500 and Nasdaq sliding to session lows.

Both yen and won tumbled on the news...

All in all, this is a trade ultimatum from the Trump administration to South Korea, Japan, and other countries, pressuring them to reduce trade barriers and tariffs and to reshore manufacturing in the U.S. The letter signals a broader 'America First' agenda and tariff diplomacy, aimed at reducing trade deficits by penalizing countries with perceived unfair trade practices. We suspect the other letters will be sent out shortly.

Vietnam has become the benchmark—both the ceiling for countries striking deals with the U.S. Trump is giving Japan and South Korea a final three-week deadline to reach a deal—failure to do so could mean severe consequences.

Trade tensions are back in view as the 90-day deadline to reciprocal tariffs (which sparked a painful but extremely short market correction) approaches on July 9, with Trump pledging to start issuing unilateral rates to dozens of countries in the coming days. Stocks retreated at the start of a potentially volatile week as US trading partners rushed to finalize trade deals with the Trump administration ahead of the Wednesday deadline. However, one potential offset is that there are increasingly suggestions that August 1st might be the new July 9th (more below).

As a benchmark, DB's economists believe the current effective tariff rate is around 15% (same as Morgan Stanley, see chart below), which is obviously a good deal below the implied rate from Liberation Day, but well above the low single figures before Trump returned to office. It is good news for markets that Section 899 (the revenge tax) has been consigned to the history books after not making it into the tax bill. It's also good news that Bessent has recently sounded more positive on the direction of travel in recent talks.

However, with financial conditions easy again and with the S&P 500 back at all-time highs, it wouldn't be a surprise to see the Trump Administration take a tough stance with those who they don't think negotiations are going in the right direction (this was discussed over the weekend in "The Risk For Stocks Is That The Administration Decides It Was Correct All Along On Tariffs").

President Trump said at the end of last week that by the July 9 deadline, tariffs would be "fully covered and they’ll range in value from maybe 60 or 70% tariffs to 10 and 20%." Then over the weekend he said that he'd “signed some letters and they’ll go out on Monday – probably 12”. Overnight this was firmed up to noon Washington time today, so expect a flurry of headlines at noon!

On Thursday Trump mentioned that the letters could go out on the Friday holiday and apply from August 1st if no deal can be made. This gave some comfort that there could be yet another extension and time to do deals. Bessent has also reiterated over the weekend that some countries would be able to negotiate a three-week extension to August 1st. So maybe we'll just be here again in three weeks when everyone is on the beach apart from the trade negotiators.

Bessent also said Trump will send letters to trading partners notifying them if no deal is reached, they will revert to April 2nd tariff levels while also adding that they are close to several deals and expect to see some big announcements in the next days. Furthermore, Bessent said 100 smaller countries will get set a tariff rate and many never even contacted the US.

For Europe, Bloomberg reported that the union is willing to accept a 10% universal tariff if exemptions for areas such as autos (25%) and steel and aluminum (50%) are provided. For Japan, the mood turned negative last week as President Trump said that they should "pay 30%, 35%, or whatever the number is that we determine, because we also have a very big trade deficit with Japan." On the bright side, Treasury Secretary Bessent said they were "very close" to a deal with India, and on Thursday the US reached a trade deal with Vietnam.

Then overnight Trump posted on social media that "Any Country aligning themselves with the Anti-American policies of BRICS, will be charged an ADDITIONAL 10% Tariff”

This follows a BRICs summit in Rio over the weekend where the group leaders, including China and India, condemned and called for a "just and lasting" resolution to conflicts across the Middle East.

Courtesy of Newsquawk, here is a summary of all the latest trade/tariff news from the weekend and this morning:

Trump said trade letters are signed and are going out on Monday addressed to 12 countries but declined to say which countries or the different tariff levels involved. Trump later commented that they will have a deal or letter with most nations done by July 9th and could send out 12 or 15 letters on tariffs on Monday.
Trump posted "I am pleased to announce that the UNITED STATES TARIFF Letters, and/or Deals, with various Countries from around the World, will be delivered starting 12:00 P.M. (Eastern), Monday, July 7th"
Trump posted "Any Country aligning themselves with the Anti-American policies of BRICS, will be charged an ADDITIONAL 10% Tariff. There will be no exceptions to this policy."
Bessent said Trump will send letters to trading partners notifying them if no deal is reached, they will revert to April 2nd tariff levels with the tariffs to take effect on August 1st, while Bessent added that they are close to several deals and expect to see some big announcements in the next days. Furthermore, Bessent said 100 smaller countries will get set a tariff rate and many never even contacted the US.
Russian President Putin told BRICS through a video link that it is important to enhance cooperation at BRICS and the usage of national currencies, while he commented that the liberal globalisation model is becoming obsolete.
White House Economic Adviser Hassett said it is possible that some trade negotiations will push past the deadline, while he added that trade deals with the UK and Vietnam provide guidelines for additional agreements with other countries, according to a CBS interview.
EU diplomats said on Friday that EU negotiators failed to achieve a breakthrough in US trade talks and negotiations to continue into the weekend, while EU negotiators were looking to secure a US tariff pause extension if no wider trade deal is agreed. It was also separately reported that the US threatened the EU with a 17% tariff on food exports, according to FT.
Japan’s tariff negotiator Akazawa held in-depth phone talks with US Commerce Secretary Lutnick on Thursday and Saturday, according to Japan’s government.
Japanese automakers are reportedly exploring all options to help reduce trade imbalances with the US, via Nikkei; one idea is Toyota Motor (7203 JT) importing cars made in the US back to Japan.
China retaliated against the EU ban regarding public tenders for medical devices by imposing import restrictions on medical devices. China’s Finance Ministry said it is to exclude imports of medical devices exceeding CNY 45mln from the European Union from July 6th, while imports of medical devices from non-EU countries should not contain EU-made components worth more than 50% of the contract value.
India and the US are likely to take the final decision on a mini trade deal in the next 24-48 hours (reported on Sunday), with an average tariff under the mini trade deal likely to be 10%, while talks have currently only been completed on a mini-trade deal and negotiations on a larger bilateral trade agreement will begin after July 9th, according to CNBC-TV18.
Thailand is to offer the US more trade concessions to avert a 36% tariff with Thailand’s Finance Minister expected to submit the revised orders before July 9th with a proposal to boost bilateral trade volume and reduce Thailand’s USD 46bln trade surplus with the US by 70% within 5 years, according to Bloomberg.
South African Trade Department spokesperson says it remains committed to a trade deal with the US; conversations are constructive and fruitful.
US-Indonesia trade deal includes buying US soybean, corn and energy products, according to an official.
German government spokesperson says time is money when it comes to tariff negotiations; adds, Chancellor Merz is coordinating with EU President von der Leyen, Italy PM Meloni, and French PM Macron on tariff talks.

Source: Zero Hedge

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Olivia Brooks

Economic

Stocks

European stocks traded in a mixed manner Monday as investors awaited U.S. President Donald Trump’s July 9 deadline for trade agreements with a great deal of uncertainty.

The DAX index in Germany gained 1.2%, the CAC 40 in France climbed 0.4%, while the FTSE 100 in the U.K. fell 0.2%.

Trade deals deadline draws nearer

With just a couple of days to go until the U.S. president‘s deadline, global investors are on edge to see if the United States forges any agreements with trading partners as they seek to avoid higher levies.

Trump paused many of the harshest U.S. tariffs for 90 days after his April 2 "Liberation Day" announcement roiled global markets in order to provide time for countries to negotiate trade deals.

Trump said on Sunday his administration was close to finalising deals with several trade partners and will send letters notifying others by July 9 of higher rates that will kick in from August 1.

However, it remains unclear just how high Trump’s tariffs will be. The president had in April unveiled tariffs ranging from 10% to 50% on major economies, but he has since added to the confusion by mentioning that some tariffs could reach 60% or 70%.

He also threatened an extra 10% tariff on countries aligning themselves with the "anti-American policies" of the BRICS, a group the U.S. itself is in tariff talks with.

German industrial production rose in May

German industrial production rose more than expected in May thanks to the automotive industry and energy production, the federal statistics office said on Monday.

Production rose by 1.2% over the previous month, above the flat figure expected.

British house prices stagnated month-on-month during June, figures from Halifax showed on Monday, with the mortgage lender revising up May’s reading to show a 0.3% drop rather than a 0.4% drop.

The data underlined the subdued state of Britain’s housing market following an increase in tax on property transactions that took effect in April.

Capgemini to buy WNS Holdings

In the corporate sector, French software firm Capgemini (EPA:CAPP) said on Monday it has entered a deal to acquire New York-listed outsourcing firm WNS Holdings (NYSE:WNS) for $3.3 billion.

Capgemini aims to create a consulting business service focused on guiding enterprises on how to reform their operations using AI, which it said would attract "significant" investments.

Shell (AS:SHEL) said it expects a weaker second quarter driven by lower trading performance in its Integrated Gas and Chemicals and Products segments.

Oil prices rise despite OPEC+ lifting production

After initially declining, crude prices rose on Monday following OPEC+’s announcement of plans to increase output more than expected in August, sparking concerns that the market may become oversupplied.

At 11:48 ET, Brent futures gained 1.2% to $69.15 a barrel and U.S. West Texas Intermediate crude futures increased 1.6% to $67.53 a barrel.

The Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, announced on Saturday that it will increase oil output by 548,000 barrels per day (bpd) in August.

The hike is larger than the 411,000 bpd increases already implemented for May, June, and July.

The group also warned that it will consider another 548,000 bpd hike in September at the next meeting on August 3.

The decision marks a continued rollback of the voluntary 2.2 million bpd in cuts that major producers like Saudi Arabia and Russia had initiated earlier this year to support prices.