What's the EU Trade Commissioner Looking for From China Trip?

Economic

Summary:

European Commissioner Maroš Šefčovič is heading to China as the country's companies come under the EU's investigatory lens.

For the first time since taking office, EU Trade Commissioner Maroš Šefčovič will travel to China on 27 and 28 March to meet China’s vice premier He Lifeng, Minister for Customs Sun Meijun and Minister of Commerce Wang Wentao. Maroš Šefčovič's visit to the Asian giant, against a backdrop of tense trade negotiations with the Americans, will be closely scrutinised. Here are five things he's looking to achieve from his trip to China.

1.Send a signal to Washington

“The EU wants to signal that the harder they hit, the more they could push the Europeans closer to China,” Victor Crochet, a China expert with law firm Nishimura & Asahi told Euronews. With the US imposing tariffs on aluminium and steel, and further tranche of reciprocal tariffs schedules to begin applying on 2 April, the EU may seek closer ties with China, the second-largest economy in the world after the US.

This could be good news for the Asian giant, which is also affected by US tariffs. “China is the one which needs the EU most because of its trade surplus vis-a-vis the EU. However, it will not show it because the EU is also in a complicated situation due to the US,” according to Alicia García Herrero, expert from the Bruegel think tank.

2. Re-open diplomatic dialogue

The previous Commission left relations with China strained following a row over Chinese electric vehicles (EVs) culminated in the EU imposing 35% tariffs on Chinese imports, and China retaliating with tariffs on European brandy and Cognac. Since Covid, the EU has also been working on reducing its dependencies on China, notably on critical raw materials.

The new strategy is to “derisk through diplomacy", according to Maria Martin-Prat, the Commission's Deputy Director-General for Trade. “We want to base our relationship with China on a combination of engagement but also protection,” the EU official told an event in Brussels ahead of Šefčovič’s trip. “We have left behind any idea of a smooth and equal relationship,” she acknowledged on market distortion and subsidisation.

Herrero said that Šefčovič will explore options arising from poor relations between the EU and US, but will also arrive with a portfolio EU investigations over unfair trade practices with which to warn China.

3. Push China to act on its overcapacities

Chinese overcapacities are Europe's nightmare. “China is doing nothing to address it,” Maria Martin-Prat claimed. And with US tariffs on Chinese products, there is a risk of seeing China divert more production towards the European market.

Steel, cement and wood are among key exports from China to the US which could be redirected to European markets amid the current tariff storm. “Chinese demand for these products has fallen as a result of the halt in property construction,” according to Victor Crochet. Computers, EV’s and renewables, such as solar panels or wind turbines, are also on the list of Chinese overcapacities.

“To address overcapacities, the EU wants China to pass from a model based on business subsidies and exports, to a model based on its domestic market,” Crochet added.

4. Lift barriers to European companies

European companies gripe over barriers to doing business in China, with data transfers from European companies based in China to their overseas branches requiring a green light from the Cyberspace Administration of China (CAC). A temporary arrangement was found in 2023 between the EU and China to speed up the approval process, but as Herrero pointed out, "this is a major issue for European companies producing a lot of data whether it is financial or related to services."

5. Attract more Chinese investment

The EU wants to attract Chinese investments. “Europe is in a strong position here,” Sacha Courtial, expert from the Delors Institute told Euronews, explaining: "We're opening up our market on our terms, i.e. to create jobs in Europe and ask for technology transfers. That's the idea behind manufacturing of Chinese electric cars in Europe.”

Having already opened in Hungary, Chinese electric vehicle giant BYD is considering opening a manufacturing and assembling plant in Western Europe to avoid EU tariffs.

Source: Euronews

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Warren Takunda

Economic

Shares sagged Thursday in Asia, apart from China, after President Donald Trump announced he will slap 25% tariffs on imported cars.

Trump said he was raising duties on auto imports to encourage more manufacturing in the U.S., but the impact will be complicated since U.S. automakers and even foreign manufacturers with factories in the U.S. source many of their components from around the world.

Japan’s benchmark Nikkei 225 lost 0.6% to finish at 37,799.97.

Toyota Motor Corp. stock dove 2%, while Honda Motor Co. stock dipped 2.5%. Nissan was down 1.7%. Mazda Motor Corp. shares dropped 6%, while those in Subaru Corp. slipped nearly 5% and Mitsubishi Motors Corp. lost 3.2%.

Japanese Prime Minister Shigeru Ishiba has sought to persuade Trump to exempt Japan from the higher tariffs, and he reiterated his position Thursday.

”We strongly request that tariff measures not be applied to Japan,” he told reporters.

When asked about possible responses, he said without giving specifics: “All options are naturally subject to consideration.“

Ivan Espinosa, who will become chief executive at Nissan Motor Corp. April 1, told reporters earlier this week that the automaker was considering several scenarios as what Trump might do was “fluid.”

South Korea’s Kospi fell 1.4% to 2,607.15. Korean automakers also felt a chill from Trump’s announcement. Hyundai Motor Co.'s shares traded in Seoul lost 4.3% while Kia Corp.'s shares dropped 3.5%.

Shares in Greater China, apart from Taiwan, were higher. Hong Kong’s Hang Seng gained 0.5% to 23,605.67, while the Shanghai Composite index was up 0.2% at 3,373.75.

Chinese automakers and parts manufacturers have been expanding sales around the world, but not in the United States, so any impact from the tariffs announcement would be an indirect one.

But Taiwan’s benchmark, the Taiex, sank 1.4%.

In Australia, the S&P/ASX 200 dropped 0.4% to 7,969.00.

The S&P 500 sank 1.1% to 5,712.20 to break what had been a run of calmer trading. The Dow Jones Industrial Average swung from a gain of 230 points in the morning to a loss of 132 points, or 0.3%, closing at 42,454.79.

Weakness for Big Tech sent the Nasdaq composite to a market-leading drop of 2%, at 17,889.01.

The group of dominant stocks known as the “Magnificent Seven” has been at the center of the U.S. stock market’s recent sell-off, which earlier this month took the S&P 500 10% below its all-time high for its first “correction” since 2023. Big Tech had rocketed in earlier years amid a frenzy around artificial-intelligence technology, and critics said their prices rose too quickly compared with their already rapidly growing profits.

Nvidia fell 6% to bring its loss for the young year so far to 15.5%. It was the single heaviest weight on the S&P 500 by far.

Other AI-related stocks were also weak, including server-builder Super Micro Computer, which fell 8.9%, and power companies hoping to electrify AI data centers.

Tesla has been contending with additional challenges, including worries that political anger at its CEO, Elon Musk, will hurt the electric-vehicle maker’s sales. Tesla dropped 5.6% to extend its loss for 2025 to 32.6%.

Other U.S. automakers also declined after Trump said he would announce his tariffs on auto imports.

U.S. auto giants have already spread their production around North America following prior free-trade deals encompassing the United States, Canada and Mexico. General Motors sank 3.1%. Ford Motor went from an early gain to a loss and back before inching up by 0.1%.

So far, the economy and job market have appeared to remain solid despite the worsening moods of shoppers and businesses.

Orders for machinery, airplanes and other long-lasting manufactured products unexpectedly grew last month, when economists were forecasting a contraction. But a subset of the data seen as an indicator for investment by businesses flipped from growth to contraction. That could be a signal businesses are holding back on spending to see how tariffs play out.

In energy trading, benchmark U.S. crude lost 5 cents to $69.60 a barrel. Brent crude, the international standard, fell 6 cents to $73.73 a barrel.

In currency trading, the U.S. dollar declined to 150.40 Japanese yen from 150.54 yen. The euro cost $1.0769, up from $1.0754.

Source: AP

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Alexander

Economic

Forex

LONDON (Reuters) - Britain does not want to escalate a trade war with the United States and is working intensely with Washington to secure an exemption from tariffs, the country's finance minister Rachel Reeves said on Thursday.

U.S. President Donald Trump expanded his global trade war late on Wednesday when he unveiled a 25% tariff on imported vehicles, prompting criticism and threats of retaliation from affected U.S. allies.

"We are not at the moment in a position where we want to do anything to escalate these trade wars," Reeves told Sky News when asked if Britain would impose retaliatory tariffs against the U.S.. "Trade wars are no good for anyone."

She said an escalation of tariffs would be bad for Britain: "but it would be bad for the U.S. as well, and that's why we are working intensely these next few days to try and secure a good deal for Britain," Reeves said in an interview with the BBC.

"I recognise how important this is," Reeves added.

U.S. new levies on cars and light trucks will take effect on April 3, the day after Trump plans to announce reciprocal tariffs aimed at the countries responsible for the bulk of the U.S. trade deficit.

They come on top of duties already introduced on steel and aluminium, and on goods from Mexico, Canada and China.

Britain has hoped to avoid tariffs with the U.S., arguing that both countries report trade surpluses with each other - including goods and services - owing to measurement differences.

London is also trying to agree a tech-led deal with Washington that it hopes will potentially spare it the direct hit of tariffs on its own exports.

Source: Yahoo Finance

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FxPro

GBPUSD: Sell

GBPUSD reversed from resistance area
Likely to fall to support level 1.2800

GBPUSD recently reversed down from the resistance area between the resistance level 1.3035 (which has been reversing the price from October), resistance trendline of the daily up channel from January and the upper daily Bollinger Band.

The downward reversal from this resistance area created the daily Japanese candlesticks reversal pattern Evening Star which started the active wave 3.

GBPUSD can be expected to fall to the next support level 1.2800, the former monthly high from December.

Source: ACTIONFOREX

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Warren Takunda

Stocks

London stocks fell in early trade on Thursday, taking their cue from a downbeat session on Wall Street after Donald Trump announced a new 25% tariff on all imported cars and car parts.

At 0830 GMT, the FTSE 100 was down 0.6% at 8,635.01.

Speaking at the White House on Wednesday, Trump said: "Frankly, friend has been oftentimes much worse than foe. And what we’re going to be doing is a 25% tariff on all cars that are not made in the United States.

"If they’re made in the United States, it’s absolutely no tariff."

Trump also warned the European Union and Canada not to work together "to do economic harm to the US", threatening them with "large-scale tariffs, far larger than currently planned".

On his Truth Social platform, the US President said such tariffs "will be placed on them both in order to protect the best friend that each of those two countries has ever had".

In equity markets, M&G, Schroders, Segro, Taylor Wimpey, Melrose Industries, Aberdeen and OSB Group all fell as they traded without entitlement to the dividend.

Luxury car maker Aston Martin was under the cosh on news of Trump’s latest tariffs.

AJ Bell lost ground after saying it has agreed to sell its Platinum SIPP and SSAS business - AJ Bell Platinum - to InvestAcc for up to £25m.

On the upside, Next surged to the top of the FTSE 100 as the retail giant boosted its sales outlook following a strong start to the year, but warned that consumer confidence was set to deteriorate as the year progressed.

The fashion and home retailer said full-price sales in the first eight weeks of the year had been ahead of expectations.

As a result, it has hiked its first-half forecast to 6.5%, having previously guided for sales growth of 3.5%.

However, the retailer - which is known for its cautious outlook - did not upgrade its second-half guidance. Instead it was kept at 3.5%, with Next citing strong comparatives and potentially weakening conditions.

Chris Beauchamp, chief market analyst at IG, said: "In uncertain times, you can usually rely on Next to deliver good news. The retail giant duly came up with the goods, engaging in the traditional upgrade to its profit forecast for the year and providing a very healthy 10% rise in pre-tax profit.

"Its growth in new platforms outside the UK and expansion into new products provides investors with hope that this steady performer can continue to deliver in a similar vein."

Marks & Spencer and Primark owner AB Foods also gained.

Source: Sharecast

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Christopher Hayes

U.S. President Donald Trump has announced a 25% tariff on all non-U.S. manufactured cars. This is a move to boost American manufacturing with cars built in the U.S. being exempt. This is part of his larger plan to adjust trade relations, with more tariffs set to roll out on April 2, dubbed "liberation day."

notably, the tariff will be applied on top of the existing 2.5% car tariff. Additionally, if parts are produced in the U.S. but the vehicle is not, those parts will be exempt from the tariff. On Wednesday, the White House confirmed that the tariffs will take effect on April 2, with collection beginning on April 3.

"What we're going to be doing is a 25 per cent tariff on all cars that are not made in the United States. This will be permanent," Trump said from the Oval Office. "We start off with a 2.5 per cent base, which is what we're at, and go to 25 per cent."

The White House announced that the tariff would apply to fully assembled cars and essential auto components, such as engines, transmissions, powertrain parts, and electrical components. The list may grow over time to include more items.

“We’re going to charge countries for doing business in our country and taking our jobs, taking our wealth, taking a lot of things that they’ve been taking over the years,” he added.

Tariff Exempts USMCA Compliant Auto Parts

The tariff currently exempts automotive parts that comply with the U.S.-Mexico-Canada Agreement (USMCA), which allows mostly duty-free trade between the U.S. and its two largest trading partners.

Trump argues the tariffs will boost U.S. manufacturing and eliminate the "ridiculous" supply chain involving the U.S., Canada, and Mexico." Trump emphasized that the 25% tariff would simplify the process and help reduce U.S. debt significantly. He described the tariff as both a tax reduction and a way to improve the country's financial balance sheet in the near future.

In February, Trump hinted at upcoming auto tariffs, and by Monday, he confirmed they would be implemented soon. He also suggested that some reciprocal tariffs might be less severe than expected, saying they could even be lower than those other countries have imposed for years.

Howver, the decision has sparked concerns about market volatility. Interestingly, he clarified that Elon Musk did not have a role in advising on this auto tariff policy, despite earlier comments suggesting that tariffs could be "net neutral or maybe good for Tesla."

Foreign Leaders Criticise The Tariffs

Foreign leaders quickly criticized the tariffs, signaling that Trump may be escalating a global trade war that could harm worldwide growth.

European Commission President Ursula von der Leyen described the move as "bad for businesses, worse for consumers, Canada's new Prime Minister, Mark Carney, criticized the U.S. trade move, vowing to defend Canadian workers and companies. Last year, Canada exported nearly C$50 billion in vehicles to the U.S., making autos a major export.

Tariffs May Drive Up Car Prices, Impact Sales and Jobs

Ahead of Trump's announcement, shares of U.S.-listed automakers dropped due to concerns that tariffs could disrupt the global auto industry. The new levies are expected to raise car prices for consumers, potentially reducing sales and causing job losses. The U.S. auto industry depends on imported parts, and experts warn that these tariffs could make cars more expensive, limit choices for consumers, and result in fewer manufacturing jobs.

If the full cost of the new 25% auto tariff is passed onto consumers, the price of an imported vehicle could rise by $12,500, potentially contributing to overall inflation. Trump was voted back into the White House last year because voters believed he could bring down prices.

The auto tariffs are part of Trump’s broader plan to reshape global trade, with “reciprocal” taxes set to be imposed on April 2, matching tariffs and sales taxes charged by other countries.

Source: CryptoSlate

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Daniel Foster

Commodity

(March 27): Gold prices rose on Thursday as US auto tariffs ratcheted up global trade tensions ahead of an April 2 deadline for reciprocal tariffs from the world's largest economy.

Spot gold was up 0.5% at US$3,033.20 an ounce, as of 0535 GMT. US gold futures gained 0.6% to US$3,039.

US President Donald Trump on Wednesday unveiled a 25% tariff on imported cars and light trucks starting next week, widening the global trade war.

Investors feared that Trump's reciprocal tariffs, expected to take effect on April 2, might fuel inflation, slow economic growth and heighten trade tensions.

Concerns over Trump's tariff policies catapulted gold to a record high of US$3,057.21 on March 20.

Aakash Doshi, global head of gold at SPDR ETF Strategy, expects gold will breach US$3,100 in the second quarter and "the market could potentially push another 8%-10% higher by end-2025 if the current macro and physical market tailwinds sustain for the yellow metal."

Goldman Sachs on Wednesday raised its end-2025 gold price forecast to US$3,300 per ounce from US$3,100, citing stronger-than-expected ETF inflows and sustained central bank demand.

Investors await the US personal consumption expenditures data, due on Friday, which could shed more light on the US interest rate path.

"The March high near US$3,057 is immediate resistance for gold prices. The US$3,100 figure follows next," said Ilya Spivak, head of global macro at Tastylive.

Last week, the US central bank held benchmark interest rate steady, but indicated it could cut rates later this year. Non-yielding bullion tends to thrive in a low interest-rate environment.

Minneapolis Federal Reserve Bank president Neel Kashkari said that while the US central bank has made a lot of progress bringing inflation down, "we have more work to do" to get inflation to the Fed's 2% target.