President Trump firmed up a trade deal with the United Kingdom last week, and its European Union neighbors are apparently pushing for a similarly styled deal despite fits and starts in talks.
According to reports, the EU now expects a 10% “reciprocal” tariff to be the starting point for an US-EU trade deal. The FT reported last Thursday that the EU is pushing for a deal modeled on the US-UK agreement. Trump has threatened tariffs of up to 50% on EU imports after various tariff “pauses” lapse July 9.
Starting Monday, Trump’s tariffs will affect washing machines, fridges and ovens. This could mean higher prices for everyday items in the US.
Meanwhile, in Canada, Prime Minister Mark Carney’s government threatened to hike tariffs by late July on US imports of steel and aluminum, weeks after Trump ballooned US levies on those metals to 50%. At the G7 this week, Trump and Carney both expressed optimism on a trade deal between the countries.
The furious push follows Trump’s recent warning that he would soon send letters setting unilateral tariff rates, raising questions about the status of negotiations and a return to his “Liberation Day” tariffs that roiled markets. Trump instituted a pause on his most punishing duties that expires July 9.
Trump also secured a small legal victory on Friday, when the Supreme Court declined to expedite a challenge from two family-owned businesses before lower courts have weighed in. Learning Resources, a family-owned toy company, had asked the high court to take the unusual step of taking up the case before an appeals court ruled.
The case is one of several legal challenges working its way through the court system.
Meanwhile, the US economy is still figuring out the effects of the tariffs. Federal Reserve Chair Jerome Powell said as the central bank held interest rates steady last week that the Fed is still waiting to see the effects of the tariffs on prices.
“We’re beginning to see some effects, and we do expect to see more of them over the coming months,” he said.
He said the Fed needs more data, saying “the pass-through of tariffs to consumer price inflation is a whole process that’s very uncertain.”
Read more: What Trump’s tariffs mean for the economy and your wallet
Here are the latest updates as the policy reverberates around the world.
LIVE1237 updates
Tariffs on household goods bring home costs of Trump’s trade wars
Starting Monday, President Trump’s tariffs will affect washing machines, fridges and ovens. This could mean higher prices for everyday items in the US.
According to the US Commerce department, the new tariffs are in addition to Trump’s existing 50% tariffs on imports of steel and some steel items and will apply to the steel content of goods.
The FT reports:
Read more here.
Amazon’s premium beauty push may be a buffer against Trump’s tariffs
Amazon (AMZN) may have found a way to offset tariffs for Prime Day — by focusing on luxury goods.
Reuters reports:
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Will tariff pressures show up in the Fed’s preferred inflation measure?
The Federal Reserve’s preferred inflation measure is expected to show a slight uptick in price pressures in May, with prices going up more broadly, as Trump’s tariffs start to affect US costs.
The FT reports:
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Korea’s early exports to US jump ahead of tariff deadline
Early trade data for June from South Korea has shown the biggest rise in exports to the US so far this year. This is an indication that manufacturers may have rushed shipments ahead of a July deadline that will see broad tariff rates double.
Bloomberg News reports:
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UK private sector grows at fastest pace since Trump tariffs hit
The UK’s private sector grew slightly faster in June, easing fears of a second-quarter slowdown. This is the first sign of stability since President Trump’s tariffs began impacting global trade.
Bloomberg News reports:
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Supreme Court declines to put legal challenge on fast track
The US Supreme Court on Friday denied an appeal by two family-owned companies to put a legal challenge to President Trump’s tariffs on a fast track.
Per Reuters:
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Audi could build plant in US to placate Trump: Report
German auto group, Volkswagen (VWAGY) may build a new factory in the US. On Friday, Reuters reported that VW’s luxury brand Audi could open the plant. This is just one option being looked at to ease tensions with President Trump over tariffs.
Reuters reports:
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China’s rare earth magnet exports slump in May, especially to US
Bloomberg News reports:
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German car manufacturers incurred costs of $535 million in April due to tariffs, says VDA
German car makers have been hit with around $535 million in costs due to President Trump’s tariffs, the VDA auto industry revealed on Friday.
Reuters reports:
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US tariff spike hits China’s small parcels, squeezing exporters
Tariff hikes from the US on small packages from China triggered a slump in shipments in May, contributing to a huge drop in bilateral trade and causing problems for exporters such as Shein.
Bloomberg News reports:
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Analysis: Oil, war and tariffs tear up markets’ central bank roadmap
Norway’s shock rate cut on Thursday has highlighted how uncertain investors have become about the economic environment. US tariffs, conflict between Israel and Iran, and a shaky dollar have made global monetary policy and inflation harder to predict.
Reuters reports:
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Japan won’t fixate on July 9 in US trade talks, Akazawa says
Japan’s trade negotiator Ryosei Akazawa said on Friday that negotiations remained “in a fog” despite both sides seeking to make a deal. Akazawa also said that Japan is not fixated on the July 9 deadline, which is when reciprocal tariffs return to higher levels.
Japan was keen to speak to President Trump at the G-7 summit this week, but Trump’s early exit meant this discussion never took place. Tokyo has failed so far to clinch a trade deal with Washington and fulfil its goal of convincing Trump to scrap a 25% tariff on Japanese cars, as well as a 24% reciprocal tariff on other Japanese imports that has been paused until July 9.
Bloomberg News reports:
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Canada threatens higher tariffs on steel, aluminum if no US deal
Bloomberg reports:
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As war and tariffs fog the outlook, some central banks trim rates
Tariffs and conflict have clouded the outlook for central banks. President Trump’s sweeping tariff threats and the escalating Israel-Iran conflict have left central banks steering policy amid rare global economic uncertainty.
Reuters reports:
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Tariff threats, wars will slow global luxury sales in 2025: Study
A study from Bain & Co. on Thursday, has shown that global sales of personal luxury goods will slow, but not collapse.
AP reports:
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Global investment decline may worsen due to tariffs: UN trade agency
Reuters reports:
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EU weighs UK-style trade deal with US
According to the FT, the EU is pushing for a UK-style trade deal with the US. This would allow for some tariffs to remain in place after President Trump’s July 9 deadline and would prevent any further retaliation against Washington.
The FT reports:
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EU increasingly resigned to 10% baseline tariff in US trade talks: Sources
European officials now expect a 10% “reciprocal” tariff to be the starting point in any US-EU trade deal, according to five sources close to the talks.
According to Reuters, EU negotiators are still pushing for the rate to be lower than 10%. However, ine of the sources, an EU official, said negotiating this had become harder since the US started drawing reve from its global tariffs.
Reuters reports:
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Trump made trade his biggest issue. Now he’s running out of time
President Trump’s first five months in office have been dominated by his trade war. Despite having some recent wins, Trump is running out of time to “seal the deal.”
CNN reports:
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Over 70% of Japanese firms say tariff impact as expected: Poll
Over 70% of Japanese firms say the business impact of US tariffs is as expected and have not adjusted their investment plans, a Reuters survey shows.
