UK Poised to Sign First Post-Tariff Trade Deal with U.S., Signaling a Potential Breakthrough Amid Global Tensions

Economic

Summary:

The UK is reportedly on the verge of becoming the first country to secure a trade agreement with the U.S. following President Donald Trump's sweeping “Liberation Day” tariffs...

UK-U.S. Trade Talks Gain Momentum Despite Global Trade Uncertainty

Britain may soon become the first nation to formalize a trade pact with the U.S. in the wake of President Trump’s global tariff overhaul, according to The New York Times. Although the White House and UK officials have not yet confirmed specifics, the anticipated briefing by Trump suggests a deal—or at least a significant step toward one—may be imminent.

This development follows the introduction of wide-ranging “reciprocal” tariffs in April, under which the U.S. imposed a minimum 10% levy on nearly all imports, with steeper rates on countries it accused of trade imbalances. The UK, while affected by the baseline 10%, was spared the more punitive duties—a sign that Washington may have viewed London as a preferred partner for expedited negotiations.

Uncertainty Over Scope: Framework or Final Deal?

While enthusiasm surrounds the prospective agreement, officials have yet to clarify whether the announcement will detail a completed trade deal or simply outline a framework for future negotiations. A spokesperson from the UK’s Department for Business and Trade emphasized the “ongoing” nature of discussions and reaffirmed the government’s intent to pursue a resolution that eases pressure on UK businesses and consumers.

The cautious tone echoes broader concerns in Westminster about aligning too closely with Trump’s unpredictable trade doctrine while ensuring UK firms are not disadvantaged amid volatile global tariffs.

Trump’s Mixed Messaging and Strategic Calculus

President Trump’s messaging around trade deals has been characteristically inconsistent. While administration officials—including Vice President JD Vance—have recently praised the UK as a “good chance” for securing a deal, Trump stated on Tuesday that the U.S. has no need to sign trade agreements, asserting that partners must instead seek access to the U.S. market on American terms.

This rhetoric underscores a shift in bargaining posture: the U.S. is presenting itself not as an equal participant but as a gatekeeper to a coveted market, leveraging access as a primary tool of economic diplomacy.

Strategic and Political Implications for the UK

For Britain, securing a bilateral trade deal with the U.S.—especially as the first to do so under the new tariff regime—would carry symbolic and economic weight. It would mark a strategic pivot post-Brexit and reinforce the UK’s aspirations of being a standalone global trading power.

However, the potential agreement arrives at a delicate time. The UK runs a trade deficit with the U.S. and must navigate domestic concerns about regulatory standards, labor rights, and agricultural imports. Moreover, Trump’s past unpredictability on international agreements casts a long shadow over any deal's long-term stability.

Deal or Diplomacy Signal?

Whether Thursday’s expected announcement reveals a comprehensive trade pact or simply signals goodwill remains to be seen. Regardless, the UK’s positioning as the first mover post-tariff escalation could provide a competitive advantage—if the terms prove sustainable.

This event may also test how other close allies—like Canada, Japan, and the EU—respond to Washington’s recalibrated trade priorities. As such, the UK-U.S. dynamic could shape a broader trend in how nations recalibrate their strategies under the evolving landscape of American protectionism.

Source: CNBC

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Catherine Richards

Economic

Political

The US is expected to announce a trade agreement with the UK shortly, according to people familiar with the matter, a move which could make Britain one of the first to make a deal with President Donald Trump. After Trump teased the announcement in an all-cap post on social media, stock-index futures and Asian shares rose while the pound extended gains.

Yet, any deal is likely to come with major caveats, and investors will be watching closely to see the extent to which Trump will backtrack from the sweeping tariffs imposed on April 2. Full-scale trade pacts typically take years to negotiate, and analysts expect any upcoming announcements to focus on top-line commitments and intentions and leave details to be negotiated later.

Global investors are also likely to remain wary in the absence of visible progress in talks with China, the world's second-largest economy. Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer meet this week in Switzerland with Chinese Vice Premier He Lifeng, though Bessent has framed the purpose of the talks as deescalation rather than a deal.

Pakistan said it shot down 12 drones from India as hostilities between the two rivals continue to escalate. The drones, dispatched in the early hours of Thursday, killed one civilian and injured four soldiers, Pakistan's military spokesman Lieutenant General Ahmed Sharif Chaudhry said at a news conference. This came after Pakistan said Chinese fighter jets were used to respond to military strikes by India. Animosity between the nuclear-armed rivals has been rising since an April 22 attack in Kashmir that killed 26 civilians in the Indian-controlled part of the territory. Even as investors in India's booming stock market largely shrug off the latest clashes, the clash is a reminder that the potential for a devastating conflict with Pakistan remains a latent risk to the nation's rise on the global stage.

China is considering a dramatic overhaul in the way homes are sold, requiring developers to offer completed properties instead of relying on a pre-sales model that has been blamed for worsening the country's housing crisis. The initiative, according to people familiar with the matter, is due to be part of a new model of real estate development being formulated by the central government. When the property sector began its downward spiral in 2021, about 90% of new homes were sold before they were finished. Yet the move threatens to exacerbate the cash flow pressure on Chinese developers, many of which have already been cut off from other financing options amid the industry's slowdown.

A recent surge in the Taiwan dollar is adding to concerns about the competitiveness of local firms that form the backbone of global tech supply chains. The island, which Morgan Stanley estimates to have the widest revenue exposure to the US among emerging markets and Asian peers, is particularly vulnerable to higher tariffs and excessive currency appreciation. The Taiwan dollar's unexpected strength bodes ill not just for exporters but also for local insurers with massive, largely unhedged holdings of US assets.

Thailand will seek applications for its new central bank governor from next week, with the successful candidate set to face the twin challenges of guarding the monetary authority's autonomy while working with the government to minimize the impact of a global trade war. The BOT governor selection is closely watched by investors to gauge whether Prime Minister Paetongtarn Shinawatra's administration will push a preferred nominee to tighten its grip over the central bank. The country is also grappling with risks of a slowdown in new foreign direct investments due to trade uncertainties, according to Narit Therdsteerasukdi, secretary-general of the government’s Board of Investment.

Chinese electric vehicles may be losing momentum in Europe but the country's automakers are selling more cars than ever in the region by delivering more hybrids and combustion engine-powered models. The number of Chinese-brand cars registered across Europe hit record levels in the first three months of the year, exceeding 150,000 vehicles, according to figures provided by Dataforce, which tracks auto sales.

Japanese telecom provider NTT plans to take over NTT Data Group in a deal worth around $16.5 billion. The move is part of a rising trend among Japanese parent companies absorbing their listed units, but it's also one that will put artificial intelligence at the core of the legacy telecom operator. About one-third owned by the government, NTT competes with KDDI and SoftBank in the growing AI arena, at a time Tokyo is pushing companies to develop a homegrown AI platform to vie with the likes of OpenAI and China's DeepSeek.

Toyota Motor warned that Trump's tariffs will result in a $1.3 billion hit to operating income in just two months, with the Japanese carmaker joining a growing list of companies grappling with the fallout of trade turmoil. The company's outlook for operating income of ¥3.8 trillion ($26 billion) for the year through next March fell far short of market expectations for ¥4.7 trillion.

Source: Bloomberg Europe

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Glendon

Economic

Political

Russian President Vladimir Putin thanked Chinese President Xi Jinping for joining celebrations to mark 80 years since the "sacred" victory over Adolf Hitler in World War Two, and said the two countries stood together now against "neo-Nazism".

Xi's presence at this week's anniversary celebrations provides an important boost for the Kremlin leader, who has portrayed his war in Ukraine as a struggle against modern-day Nazis from the start.

Ukraine and its allies reject that characterisation as a grotesque falsehood, accusing Moscow of conducting an imperial-style invasion.

"The victory over fascism, achieved at the cost of enormous sacrifices, is of lasting significance," Putin told Xi on Thursday.

"Together with our Chinese friends, we firmly stand guard over historical truth, protect the memory of the events of the war years, and counteract modern manifestations of neo-Nazism and militarism."

Xi said the two countries, as world powers and permanent members of the U.N. Security Council, would work together to counter "unilateralism and bullying" - an implied reference to the United States.

He said they would "jointly promote the correct view of the history of World War Two, safeguard the authority and status of the United Nations, resolutely defend the rights and interests of China, Russia and the vast majority of developing countries, and work together to promote an equal, orderly, multipolar, and inclusive economic globalisation".

The two leaders spoke after approaching each other along a red carpet from opposite ends of one of the Kremlin's most opulent halls and shaking hands in front of the cameras. Each greeted the other as "dear friend".

Xi is the most powerful of more than two dozen foreign leaders who are visiting Moscow this week to mark Thursday's 80th anniversary of the end of World War Two. The celebrations are taking place at a key moment in the war with Ukraine, as Moscow and Kyiv come under U.S. pressure to reach a peace deal.

Ukraine's Foreign Ministry on Tuesday urged countries not to send their militaries to participate in the May 9 parade, saying such participation would go against some countries' declared neutrality in the war.

Xi, whose country is locked in a tariff war with the United States, is expected to sign numerous agreements to deepen the "no limits" strategic partnership that the two countries signed in 2022, less than three weeks before Putin sent his army into Ukraine.

China is Russia's biggest trading partner and has thrown Moscow an economic lifeline that has helped it navigate Western sanctions. China buys more Russian oil and gas than any other country.

Source: Reuters

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Gerik

Commodity

Economic

Commission Moves Toward Full Energy Decoupling from Russia

The European Commission has unveiled a new energy strategy aimed at ending all Russian energy imports by the end of 2027, accelerating a process that began after Moscow’s invasion of Ukraine in 2022. The proposal, set to be legislated in June, targets pipeline and liquefied natural gas (LNG), as well as nuclear fuel, with a ban on new and spot contracts for Russian gas to take effect by the end of 2025. This represents a significant escalation of the EU’s effort to achieve what it terms “energy sovereignty” by cutting financial ties that have long fueled the Kremlin’s military capabilities.

While the share of Russian gas in EU imports has dropped from 45% in 2021 to 19% in 2024, dependence remains high in several member states—most notably in Eastern Europe, where energy affordability and infrastructure reliance on Russia remain deeply embedded.

Eastern European Backlash Centers on Economic and Political Sovereignty

Slovakia and Hungary, two member states with ongoing ties to the Russian government, have emerged as vocal critics of the EU plan. Slovakian Prime Minister Robert Fico labeled the proposal "economic suicide," questioning the logic of an all-encompassing cutoff that includes nuclear and oil alongside gas. Fico likened the move to erecting a new “Iron Curtain,” warning that such sweeping disengagement ignores economic reality and local needs.

Hungarian Foreign Minister Péter Szijjártó also rejected the Commission’s plan, calling it “politically motivated” and an infringement on national sovereignty. He argued that Brussels is attempting to impose the financial burden of its Ukraine policy on countries that had little say in shaping it. Both Hungary and Slovakia fear the ripple effects of higher consumer energy prices and weakened industrial competitiveness, particularly given their domestic reliance on long-term Russian contracts.

Brussels Responds: No Unanimity Needed

In response to mounting resistance, Energy Commissioner Dan Jorgensen clarified that the legislative process would not require unanimity. The Commission plans to proceed through qualified majority voting, allowing the roadmap to be approved without the consent of all member states. This underscores the EU’s commitment to phasing out Russian energy, even at the risk of deepening internal divisions.

Jorgensen reiterated that the EU is in an “unacceptable situation” of dependency on a state that has weaponized energy and that continuing Russian imports only strengthens Moscow’s capacity to wage war in Ukraine. The Commission has framed the proposal not only as a geopolitical necessity but as a moral obligation in line with broader support for Kyiv.

Structural Tensions: Integration vs. Energy Realpolitik

The plan reflects a deeper tension within the EU—between collective strategic goals and the divergent energy profiles of its members. Countries like Germany and the Netherlands, which have diversified quickly, support the move as a long-overdue correction. Others, including Hungary and Slovakia, see it as a punitive and unworkable mandate.

The Commission has proposed a “gradual and well-coordinated” transition, asking member states to submit individual plans by the end of 2025 detailing how they will achieve the cut-off. Whether Eastern governments comply or attempt to resist through procedural delays remains to be seen.

A Test of Unity in Europe’s Energy Transition

The EU’s proposal to phase out all Russian energy imports by 2027 is both a political signal and a structural pivot, aiming to sever a dependency that has long constrained foreign policy independence. However, fierce opposition from within the bloc highlights the fragmented nature of Europe’s energy landscape.

This decision tests not only the technical capacity of member states to adapt but also the cohesion of the EU in a period of rising geopolitical polarization. Whether the bloc can balance solidarity with pragmatism will define the success—or fragility—of its energy transition in the years ahead.

Source: Reuters

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Gerik

Economic

Stocks

ASX Targets Structural Improvements to IPO Landscape

On May 8, the ASX presented a formal proposal to the Australian Securities and Investments Commission (ASIC), outlining key reforms designed to make Australia’s capital markets more attractive for initial public offerings. The initiative seeks to reverse a sharp decline in IPO activity and address long-standing concerns from investors and issuers over the regulatory rigidity and inefficiencies in the current listing process.

Among the most significant proposals is a commitment to accelerate IPO timelines by preventing the extension of exposure periods beyond seven days, and allowing retail investor participation during the exposure period—a move that could reduce market friction and uncertainty in the offering window.

These measures aim to bring ASX practices more in line with those of regional peers such as the Hong Kong and Singapore exchanges, which have also embarked on IPO reforms in response to increased competition from private markets and ongoing global market volatility.

Broader Reform Agenda Includes Free Float and Bond Market Overhaul

In addition to IPO streamlining, ASX has recommended lowering the minimum required free float for new listings, which would allow companies to list with a smaller percentage of shares publicly available at the outset. This proposal is expected to appeal to high-growth and pre-IPO companies that want to maintain tighter control over equity while gradually scaling market participation.

The exchange also emphasized the need for a more dynamic and accessible corporate bond market. Greater flexibility in bond issuance, coupled with enhanced access for retail investors, is seen as a necessary evolution to complement equity markets and improve capital-raising pathways for Australian companies.

James Posnett, ASX’s general manager of listings, highlighted that these changes are intended not just to stimulate listing activity but also to provide more wealth creation opportunities for retail investors and ensure the Australian market remains globally competitive.

Market Volatility and Rise of Private Capital Pressure Public Listings

The IPO market in Australia remains subdued. In 2024, initial public offerings raised only $2 billion—down significantly from historical averages. Notably, over 60% of this total came from a single deal: the $1.3 billion IPO of Digico, a data centre trust. Dealmakers attribute the weak pipeline to volatile macroeconomic conditions, higher financing costs, and the increasing dominance of private capital, which often offers faster, less public fundraising alternatives to companies.

Industry stakeholders have also criticized Australia’s IPO regime for being overly bureaucratic. The extended review periods for prospectuses and regulatory complexity are viewed as deterrents, particularly in fast-moving industries such as technology and biotechnology.

Regulatory Reception and Next Steps

ASIC confirmed it has received nearly 70 submissions as part of its review, encompassing input from fund managers, superannuation trustees, legal firms, market operators, and individuals. The commission stated that it will publish non-confidential submissions in the coming weeks and is in the process of evaluating the broader implications of reform.

The outcome of this regulatory consultation will shape how quickly Australia can reposition itself as a compelling destination for new listings in the Asia-Pacific region. Success will depend on balancing investor protection with commercial agility in a global market environment increasingly dominated by private equity and alternative capital sources.

The ASX reform package represents a critical inflection point for Australia’s capital markets. As IPO volumes shrink and private funding grows, exchanges must adapt or risk further marginalization. If implemented, the proposed changes could remove key structural roadblocks and restore confidence among domestic and international issuers. Yet their success will ultimately depend on stakeholder alignment, effective regulatory coordination, and the broader macroeconomic backdrop.

Source: Reuters

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Grace Montgomery

Stocks

German share price index DAX at the stock exchange in Frankfurt

European shares climbed on Thursday after U.S. President Donald Trump signalled progress toward a first trade deal in his global tariff dispute, boosting market sentiment.

The pan-European STOXX 600 index was up 0.3%, as of 0707 GMT. Other regional indexes were also trading in positive territory, except for Spain, which fell 0.4%.

Trump posted on Truth Social that he will hold a news conference later in the day about a "major trade deal with representatives of a big, and highly respected, country".

Citing three people familiar with the plans, the New York Times reported on Wednesday that the deal could be with Britain.

This comes ahead of potential ice-breaker talks between Washington and Beijing trade tsars this weekend, that have firmed hopes for de-escalation in trade tensions between the world's two leading economies.

Overnight, in a widely expected decision, the Federal Reserve held its interest rates steady, with the U.S. central bank flagging that the risks of higher inflation and unemployment had risen.

Markets are also closely watching the Bank of England's policy meeting, due later in the day, with expectations for a quarter-point rate cut.

Separately, Trump's administration plans to rescind and modify a Biden-era rule that curbed the export of sophisticated artificial-intelligence chips, said a spokeswoman for the U.S. Department of Commerce.

Shares of A.P. Moller-Maersk fell 2.1% after the shipping group lowered its global container market forecast for this year due to increased economic and geopolitical uncertainty, although it left its profit outlook unchanged.

Anheuser-Busch InBev rose 4.2% after the beer brewer reported a nearly 8% rise in first-quarter operating profit, beating analysts' estimate by more than double.

Source: Yahoo Finance

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Gerik

Economic

Exports Rebound on Pre-Tariff U.S. Demand Surge

German exports rose by 1.1% month-on-month in March, exceeding the 1.0% forecast in a Reuters poll. This improvement was largely driven by a front-loading of shipments to the United States, which is preparing to implement sweeping tariffs under President Donald Trump’s administration. As the U.S. remained Germany’s top trading partner in 2024, with €253 billion in bilateral goods trade, the anticipatory surge in demand from American buyers provided short-term support to German exporters.

While the uptick is encouraging, analysts caution that it reflects exceptional one-off dynamics rather than a sustained recovery. As new tariffs take effect, German exporters may face significant headwinds in the months ahead, particularly in automotive and machinery sectors that are heavily exposed to U.S. markets.

Industrial Production Surprises to the Upside

Industrial output also saw an unexpected surge, growing 3.0% in March compared to February—far outpacing the 0.8% forecast by economists. The figures suggest a potential stabilization in Germany’s industrial sector, which has been plagued by weak global demand, energy price pressures, and supply chain disruptions over the past two years.

The combination of rising exports and stronger output points to a temporary lift in momentum, especially as firms accelerate production to fulfill orders ahead of trade barriers. However, this front-loaded activity may mask underlying weakness, with production likely to soften once U.S.-bound shipments taper off under the new tariff regime.

Trade Balance Strengthens Despite Import Weakness

Germany’s trade surplus widened to €21.1 billion in March, up from €18.0 billion in February. This expansion was not only supported by stronger exports but also by a notable 1.4% drop in imports, reflecting softer domestic demand and possibly early signs of tightening financial conditions.

Although a stronger trade surplus is typically viewed as a positive macro signal, the contraction in imports could be a warning sign of weaker internal consumption and investment, particularly if companies and consumers are growing more cautious in response to global uncertainty and rising costs.

Outlook Clouded by Tariffs and External Pressures

Looking ahead, the export-oriented German economy faces renewed challenges. The U.S. tariffs—set to be among the most severe in recent history—could significantly erode competitiveness for German goods. Furthermore, geopolitical volatility, tight monetary conditions in Europe, and weak Chinese demand add to the uncertainty.

Still, March’s data suggests that German industry remains resilient and capable of responding to short-term external shocks. Whether this resilience can be maintained will depend heavily on how firms navigate the rapidly changing global trade environment in the second half of 2025.