[🇺🇸] USA and EU/China/Canada Trade War

[Saif]

Date of Event: Feb 4, 2025

Source : https://www.newagebd.net/post/europe/257080/eu-vows-retaliation-if-trump-starts-trade-war

EU vows retaliation if Trump starts trade war
Agence France-Presse . Brussels, Belgium 03 February, 2025, 22:52

NATO secretary general Mark Rutte (C) speaks with French president Emmanuel Macron (CR) during an informal EU leaders’ retreat at the Palais d’Egmont in Brussels on Monday. | AFP photo

EU leaders meeting in Brussels Monday warned there would be no winners in a trade war with the United States, insisting they would hit back if US president Donald Trump imposes tariffs.

French president Emmanuel Macron said the European Union must show its muscle if US president Donald Trump makes good on his threat to target the bloc with a volley of tariffs.

‘If we are attacked in terms of trade, Europe—as a true power—will have to stand up for itself,’ Macron said.

The leaders of the EU’s 27 nations were huddling in the Belgian capital with Britain’s prime minister and the head of NATO to discuss efforts to boost Europe’s defences faced with an aggressive Russia—as Trump’s demands that American allies spend much more. But the discussions were overshadowed by the US leader’s decision to slap tariffs on Canada, Mexico and China—with Trump threatening to target EU next.

Poland’s prime minister Donald Tusk, whose country currently holds the EU presidency, said everything must be done to avoid a ‘totally unnecessary and stupid’ trade war.

Trump has not hidden his enmity for the EU, accusing it of treating the United States ‘very, very unfairly’ on trade.

After slapping levies on his North American neighbours and China, Trump doubled down on Sunday by saying he ‘definitely’ planned to target the EU in future.

German chancellor Olaf Scholz said a trade dispute would be ‘bad for the US, bad for Europe’, with transatlantic ‘cooperation’ preferable for both sides.

‘We can also react,’ he added, veering from Germany’s traditionally cautious approach to transatlantic trade relations.

‘We need America, and America needs us as well,’ echoed the EU’s top diplomat, Kaja Kallas, adding there were ‘no winners in trade wars’.

On Sunday, the European Commission said it would retaliate ‘firmly’ if Trump hit it and decried his sweeping measures against Canada, Mexico and China.

‘Tariffs create unnecessary economic disruption and drive inflation. They are hurtful to all sides,’ a commission spokesman said.

Up until then Brussels had said it hoped to avoid a trade conflict with Trump through negotiation.

Later European Council chief Antonio Costa held a night phone call with Canadian Prime Minister Justin Trudeau.

‘Both leaders underscored the importance of the EU-Canada bilateral relationship and confirmed their determination to continue to working together,’ an EU official said.

Since Trump was re-elected in November, Brussels has been working to diversify its trading partnerships, announcing in recent weeks both a strengthened trade deal with Mexico and the resumption of talks on a free trade deal with Malaysia.

Back in 2018, during his first term, Trump imposed tariffs on European steel and aluminium exports—leading the EU to respond with its own higher duties.​

 

[Bilal9]

I am watching in awed animation as this idiot ruins every ally relationship one by one and hastens the decline of America. I am afraid for the next generation of Americans.

What kind of irresponsible Ullu-ka-paththa would do this?

 

[Saif]

EU wants early US talks to avert Trump tariffs

The European Union wants to engage swiftly with the United States over President Donald Trump's planned tariffs, trade chief Maros Sefcovic said on Tuesday, while his boss Ursula von der Leyen stressed the bloc would protect its interests in negotiations. Sefcovic, speaking before a meeting of EU

thefinancialexpress.com.bd

EU wants early US talks to avert Trump tariffs
REUTERS
Published :
Feb 04, 2025 18:45
Updated :
Feb 04, 2025 18:45

Maros Sefcovic, the nominee to become the European Union's trade and economic commissioner, attends a confirmation hearing before the European Parliament's international trade and constitutional affairs committees, in Brussels, Belgium November 4, 2024. REUTERS/Johanna Geron, in Brussels, Belgium November 4, 2024. Photo : REUTERS/Johanna Geron/Files

The European Union wants to engage swiftly with the United States over President Donald Trump's planned tariffs, trade chief Maros Sefcovic said on Tuesday, while his boss Ursula von der Leyen stressed the bloc would protect its interests in negotiations.

Sefcovic, speaking before a meeting of EU ministers to debate trade and EU competitiveness, said he wanted "early engagement" and was awaiting confirmation of the appointment of Trump's pick for Commerce Secretary, financier Howard Lutnick.

"We are ready to engage immediately and we hope that through this early engagement, we can avoid the measures which would bring a lot of disturbance to the most important trade and investment relationship on this planet," he told reporters.

Von der Leyen, the European Commission president, said the EU executive's first priority was to work on the many areas where EU and US interests converge, such as critical supply chains and emerging technologies.

In a speech in Brussels, she said the EU was ready for tough negotiations to work out grievances and set the foundations for a stronger partnership.

"We will be open and pragmatic in how to achieve that. But we will make it equally clear that we will always protect our own interests – however and whenever that is needed," Von der Leyen said.

EU officials say contacts with the Trump administration have been limited so far, noting that Trump's picks for top jobs are not able to speak to foreign counterparts until their positions have been confirmed. Von der Leyen and Trump have not been in contact since Trump's inauguration.

The EU meeting in Warsaw started just a few hours after additional US tariffs of 10 per cent on Chinese goods took effect, prompting China to hit back. Canada and Mexico were also in line for 25 per cent US tariffs on Tuesday, but each secured a 30-day pause.

Trump has said the European Union is next in line. He has repeatedly complained about the US trade deficit with the 27-country EU.

Sefcovic said that deficit, including services trade, was around 50 billion euros, or around 3.0 per cent of overall annual EU-US trade of 1.5 trillion euros, while 4 million jobs on both sides of the Atlantic were reliant on this open trading relationship.

"We believe through constructive engagement and discussion we can resolve this problem," he said.

Sefcovic did not go into how the bloc might negotiate, but some ministers offered advice on the EU approach.

Luxembourg foreign minister Xavier Bettel, who was prime minister during Trump's first term, said the EU needed to be united and strong and not begin negotiations with concessions.

"This is not the Marrakech souk," he said. "We don't offer. We listen, we exchange, we say things. We don't offer."

Irish trade minister Peter Burke also said it was not worthwhile at this point to make offers.​

 

[Saif]

Trump tariff uncertainty overshadows growth promises: analysts

President Donald Trump’s tariffs and the retaliation they attracted will likely weigh on US growth and boost inflation, according to analysts, but, beyond that, uncertainty surrounding the levies threatens to overshadow optimism about his future policies.

www.thedailystar.net

Trump tariff uncertainty overshadows growth promises: analysts

This photo taken on January 23 shows cars waiting to be exported in a port in Lianyungang, east China’s Jiangsu province. Donald Trump reignited trade wars this week with hefty duties on Canadian, Mexican and Chinese imports, drawing sharp retaliation from Ottawa and Beijing. Photo: AFP/file

President Donald Trump's tariffs and the retaliation they attracted will likely weigh on US growth and boost inflation, according to analysts, but, beyond that, uncertainty surrounding the levies threatens to overshadow optimism about his future policies.

Trump reignited trade wars this week with hefty duties on Canadian, Mexican and Chinese imports, drawing sharp retaliation from Ottawa and Beijing, including new tariffs on key American farm products.

Collectively, these could dent US GDP growth by one percentage point and hike inflation by 0.6 points if kept in place for the year, said Nationwide chief economist Kathy Bostjancic.

"Tariffs represent a negative supply shock. It hurts production, raises prices," she told AFP, warning that business and consumer confidence also take a hit from levies. And the unpredictability of Trump's tariff plans stand to offset positivity about the president's promises of deregulation and tax cuts, which are seen as pro-growth, she said.

"That hope and excitement right now is overwhelmed by the uncertainty of what's going to play out," she added.

It also remains unclear if new tariffs will be long-lasting, and they come atop cost-cutting measures in the federal government which are being challenged in courts, KPMG chief economist Diane Swonk said.

The fallout from these efforts can undermine demand.

Trump has not only quickened the pace of tariff hikes in his second term by tapping emergency economic powers to impose them without an investigation period, but his levies cover a larger value of goods.

Trump's first-term tariffs hit $380 billion worth of US imports over 2018-2019, mainly from China, said Erica York of the Tax Foundation.

But his latest duties introduced over a month impact $1.4 trillion of imports, mostly from allies, she added.

"Because of the faster implementation and the larger magnitude, the new tariffs will be much more disruptive to the US economy than Trump's first trade war," York said.

While the situation is fluid, Bostjancic said prices of products like motor vehicle parts could rise by 10 percent within months, given how integrated North American supply chains are.

This could inflate consumer costs for big ticket items. Used car prices could increase if producing new vehicles became pricey, analysts said.

New homes stand to become more expensive too, potentially making property owners reluctant to move and weighing on the housing market, said Jessica Lautz at the National Association of Realtors.

Trump's latest 25 percent tariff on Canadian goods hits lumber imports, which are important to homebuilders.

With the breadth of Trump's current tariff plans, "some companies may not be able to maintain the same level of employment," Swonk of KPMG warned.

During Trump's first term, despite an initial uptick in steel industry employment when he imposed tariffs on imports of the metal, these were more than offset by higher input costs and layoffs elsewhere, she noted.

Other near-term effects include countries' readiness to to hit US "choke points" following experiences from his first administration, said Swonk.

"They're going to look for the places that are the biggest pinch points for the president's party and that's the Republican Party," she told AFP.

This means taking aim at Republican-dominated states.

When the world's biggest economy takes action like sweeping tariffs other countries tend respond strategically, targeting countermeasures at areas which likely have more political sway over the administration, she said.

Farm and food products are often primary targets of retaliation, said Wendong Zhang of Cornell University. This could spark the need for federal aid to farmers subsequently.

Already, China said it would impose 10 percent and 15 percent levies on various US agricultural exports including soybeans.

In Trump's first term, retaliatory tariffs on the United States caused more than $27 billion in US agricultural export losses from mid-2018 to late-2019.

Economists say the hit to growth and inflation in 2025 could be somewhat counterbalanced by aggressive deregulation efforts next year, as Trump's government seeks to rein in the budget deficit and make certain tax cuts permanent.

For now, the "uncertainty effect," serves as a tax of its own, Swonk said.​

 

[Saif]

China files complaint with WTO against US tariffs

Beijing said Tuesday it had filed a complaint with the World Trade Organization against the United States over President Donald Trump’s tariff increases on Chinese goods.

www.thedailystar.net

China files complaint with WTO against US tariffs

Beijing said Tuesday it had filed a complaint with the World Trade Organization against the United States over President Donald Trump's tariff increases on Chinese goods.

The statement comes a day after Trump ordered additional tariffs against Chinese goods, increasing previously imposed 10 percent levies to 20 percent.

"The United States' unilateral tax measures seriously violate WTO rules and undermine the foundation of China-US economic and trade cooperation," Beijing's commerce ministry said in a statement, adding that it was "strongly dissatisfied and firmly opposed" to the tariffs.

In response to the US tariffs, Beijing has imposed new duties on a range of agricultural imports from the United States. The additional 15 percent tariffs on products including chicken, wheat, corn and cotton are due to come into effect next week.

"China will, in accordance with WTO rules, firmly safeguard its legitimate rights and interests and defend... the international economic and trade order," the commerce ministry statement added.

"The United States' unilateral tax measures seriously violate WTO rules and undermine the foundation of China-US economic and trade cooperation," Beijing's commerce ministry said

A WTO official confirmed to AFP that the new complaint from China had been received.

Trump, in imposing the tariffs, said China had not done enough to halt the trafficking of fentanyl and other highly potent opioids that kill thousands of Americans each year.

Analysts say that stemming the flow of deadly drugs is just one aim for Trump, who also frequently mentions trade imbalances when discussing the tariffs.

In a white paper released Tuesday, China's National Narcotics Control Commission touted actions already taken to crack down on trafficking of fentanyl-related substances, state media reported.

"Since implementing full control of fentanyl-related substances, China has not detected any further cases of smuggling or selling fentanyl-related substances abroad," Xinhua reported, attributing the matter to a senior commission official.

China is a major market for US energy exports and according to Beijing customs data, imports of oil, coal and LNG totalled more than $7 billion last year.

Beijing launched a similar dispute in February when Trump first threatened the tariffs, describing the levies as "malicious" at the time.

It says it will also probe US tech giant Google and the American fashion group which owns Tommy Hilfiger and Calvin Klein.

Trump has made tariffs a key foreign policy tool of his second term, joking that the word tariff is the "most beautiful" in the dictionary.

The Republican has also imposed tariffs on Mexico and Canada which he says are punishment for failing to halt the flow of migrants and drugs into the United States.​

 

[Saif]

Trump tariffs and the declining American empire

As US President Donald Trump slams hefty taxes on imports and constantly threatens for more, goading long-time partners and allies into ugly fights, a global trade war is erupting. With a new round of tariffs on steel and aluminium that went into effect last week, the worldwide “reciprocal&rd

thefinancialexpress.com.bd

Trump tariffs and the declining American empire
Muhammad Mahmood
Published :
Mar 22, 2025 23:17
Updated :
Mar 22, 2025 23:17

As US President Donald Trump slams hefty taxes on imports and constantly threatens for more, goading long-time partners and allies into ugly fights, a global trade war is erupting. With a new round of tariffs on steel and aluminium that went into effect last week, the worldwide “reciprocal” tariffs on the horizon next month could potentially deepen the global trade war.

Details of the Fair and Reciprocal Trade Plan that will impact all US trading partners are not yet known, but the US administration has suggested these tariffs will target any rules it considers “unfair”. Reciprocal tariffs aim to create deals with individual countries, drawing them into the US orbit. Universal tariffs, however, would lead to countries banding together.

The ongoing trade tensions between the US and other countries have created economic uncertainty and may cause significant damage to the global economy. The lessons countries around the world draw will help determine just how much the global economy cracks up as Trump’s trade war deepens.

Tariffs have been a central part of Trump’s overall economic vision. He claims tariffs will enhance US manufacturing, safeguard jobs, increase tax revenue, and stimulate domestic economic growth. He also wants to restore America’s trade balance with its trading partners, reducing the gap that exists between the US imports from and exports to other countries. He has not ruled out a recession due to his trade policies. US Commerce Secretary Howard Lutnick also said the tariffs were “worth it” even if they lead to an economic downturn.

Trump is using tariffs for two different purposes. The first type of tariff is designed to advance his “America First” trade policy. These tariffs are fiscal levers— traditional protectionist measures to disadvantage foreign producers and to stimulate local manufacturing. The second type of tariff are bargaining chips, or in some cases, bludgeoning clubs designed to pressure world leaders to bend to Trump’s diktats. Some of the tariffs can straddle both categories. It is not always clear what is protectionism, and what is power playing.

Trade has been cited as a major contributing factor to the relative decline of the US economy in the global context and to various other internal issues, including significant levels of income inequality. The core of Trump’s response to the decline as he sees it, however, remains economic. To deal with the decline Trump has uniquely combined relentless right-wing propaganda against government depicting it as inherently undesirable, harmful and illegitimate with another idea also relentlessly promoted by the left in the US that free trade is bad and must be shut down. Comprehensive protectionism has been a central cause advocated by US trade unions since the 1970s. Now Far-right figures like Trump are equally vocal in advocating for protectionism, often calling tariffs “the most beautiful word.”

Therefore, Trump’s overall trade agenda has a much wider political scope designed to reverse the continuing decline of the American empire which is reflected in the gradual decline of America’s economic and political influence in a world that is increasingly becoming multi-polar, as the United States loses its dominance from its unipolar era. This is also evident in his slogans such as “Make America Great Again (MAGA)” and “America First.” These slogans are implicit recognition of the US’s declining economic and political influence in the world. He is obsessed by the decline of a once great imperial power, and dreams of rebuilding it.

These slogans not only aim to revitalise the American economy but also carry underlying implications. His blending of protectionism and coercion has an echo of “America First” mantra to appeal to the mass base which propelled him to office. As Russin Foreign Minister Sergei Lavrov pointed out in early February this year that a foreign policy based on exceptionalism risked undermining the global order based on sovereign equality.

Lavrov also warned that the US’s “America First” policy has disturbing echoes of Hitler’s “Deutschland uber alles”, that is “Germany above all” which was used by Nazis to assert national superiority over others. He also expressed his concerns that an approach based on “peace through strength” could be the final blow to diplomacy.

Last week US Secretary of State Marco Rubio announced that South African Ambassador to the US, Ebrahim Rasool, was “no longer welcome to our great country” in the wake of a speech delivered by the ambassador virtually to a South African think-tank during which he criticised Trump administration’s policies. He said that the Trump administration was waging a “a supremacist insurgency” against the West’s political establishment and pandering to an illusory “white victimhood” among its base.

He described Trump’s MAGA movement as a “response not simply to a supremacist instinct, but a clear data that shows great demographic shifts in the USA”. He further stated, “I believe there is also an export of the revolution,” citing examples such as Elon Musk’s involvement in UK politics and US Vice President Vance addressing the Alternative for Germany (AfD) to support their election campaign. In fact, in February, Vance travelled to Europe to promote German Neo-Nazi party leader Alice Weidel.

Rubio accused Rasool of being a “race-baiting politician” who harbours animosity towards Americans and President Donald Trump. But the Trump administration’s hostilities are not just against Rasool, but the whole South African government because of its stand on Palestine, false allegations of oppression of white farmers in South Africa whom Trump encouraged to migrate to the US and growing relationships with Iran and Russia.

This anti-South Africa card also plays right into the fears of many white Americans and whites elsewhere as well as depicting South Africa posing a threat to the white Christian civilisation, further strengthening the support of the evangelical Christians in the US for Trump.

Furthermore, a South African diplomat told the press that cards were heavily stacked against Rasool because “A man named Ebrahim, who is a Muslim, with a history of pro-Palestinian politics, is not likely to do well in that job now.” This perspective of the diplomat also reflects the presence of deeply rooted Islamophobia in the US, including within the political establishment.

President Donald Trump warned BRICS countries against replacing the U.S. dollar as a reserve currency, reiterating his earlier threat of 100 per cent tariffs.”There is no chance that BRICS will replace the U.S. dollar in international trade, or anywhere else, and any country that tries should say hello to tariffs, and goodbye to America,” he said.

The bloc was founded as an informal club in 2009 to provide a platform for its members to challenge a world order dominated by the United States and its Western allies. The BRICS alliance counteracts US policies to protect its empire, including its sanctions warfare, with increasing effectiveness. With more than 30 countries showing interest in BRICS, it is steadily becoming a challenge to the traditional world order.

Neither current conditions nor the BRICS discussions appear to pose an immediate challenge to US interests. Though a common currency has been discussed casually, these countries are far from implementing it. Nonetheless, Trump has repeatedly threatened them with a 100 per cent tariff.

Trump’s interactions with America’s allies and neighbours, along with his proposals such as annexing Canada, controlling the Panama Canal, and acquiring Greenland from Denmark, are aimed at appealing to his MAGA base.

The present world order as crafted by the US to safeguard its imperial reach is slowly but surely breaking down. The G20 which is considered as the new foundation for stabilising the current world order failed to issue a joint statement at the conclusion of its 3-day finance ministers’ meeting held in Cape Town, South Africa in late February this year indicating its irrelevance in the newly emerging multi-polar world order.

The US, like past empires, faces crises in multiple fronts which weaken its global influence. The history of every empire, ancient or modern, has always involved a succession of crises — usually mastered in the empire’s earlier years, only to be ever more disastrously mishandled in its era of decline. Trump’s trade wars show mishandling of America’s imperial decline.

The decline occurs as a result of several negative trends that include the US military machine by diverting funds and resources to endless wars, impoverishes the empire at home, unprecedented government and international debt, the decline of the US dollar as a central bank reserve holding. Another is its decline as a means of trade, credits, and investment, inordinate concentration of wealth in the hands of relatively few individuals, dominance of corporate interests and imperial overreach among many other factors.

The US’s “unipolar moment” in history is encountering significant challenges as more powerful competitors emerge in Asia and Europe, indicating a relative shift in global power dynamics. Many believe Donald Trump’s election as President indicates a further decline and threat to American hegemony. Empires often hasten their own decline by overextending their coping mechanisms, thereby disrupting the existing world order. Trump’s tariff wars illustrate over-extension.

Trump’s bombast hides a complex economic and strategic calculus. Trump’s aggressive hyperbole and macho swagger often mask deep insecurities about the imperial decline. It is most unlikely his words will match his deeds. In the end, his policies, like tariffs, aim to strengthen the economy and maintain US hegemony but might instead accelerate further decline of the empire.​

 

[Saif]

US imposes trade restrictions on dozens of entities with eye on China

The United States added dozens of entities to a trade blacklist Tuesday, its Commerce Department said, in part to disrupt Beijing’s artificial intelligence and advanced computing capabilities.

www.thedailystar.net

US imposes trade restrictions on dozens of entities with eye on China

US and Chinese flags are seen before an event in Arlington, US. The latest trade blacklist by the US affects 80 entities from some countries, including China. Photo: REUTERS/FILE

The United States added dozens of entities to a trade blacklist Tuesday, its Commerce Department said, in part to disrupt Beijing's artificial intelligence and advanced computing capabilities.

The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the department citing their "activities contrary to US national security and foreign policy."

Those added to the "entity list" are restricted from obtaining US items and technologies without government authorization.

"We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives," said US Commerce Secretary Howard Lutnick.

The entities targeted include 11 based in China and one in Taiwan, accused of engaging in the development of advanced AI, supercomputers and high-performance AI chips for China-based users "with close ties to the country's military-industrial complex."

They include the Beijing Academy of Artificial Intelligence and subsidiaries of IT giant Inspur Group. Others were included for "contributions to unsafeguarded nuclear activities" or ballistic missile programs.

The aim is to prevent US technologies and goods from being misused for activities like high performance computing, hypersonic missiles and military aircraft training, said Under Secretary of Commerce for Industry and Security Jeffrey Kessler.

Two entities in Iran and China were also added to the list for seeking to procure US items for Iran's defense industry and drone programs, the Commerce Department said.

Beijing condemned the blacklisting of its firms, accusing Washington of "weaponizing" trade and technology in a "typical act of hegemonism".

"We urge the US side to stop generalizing the concept of national security... and stop abusing all kinds of sanctions lists to unreasonably suppress Chinese enterprises," foreign ministry spokesman Guo Jiakun said at a daily news conference.

China would take "necessary measures" to defend its firms' rights, Guo added. Several of the blacklisted companies did not respond to AFP's request for comment on Wednesday.​

 

[Saif]

China, Japan, South Korea will jointly respond to US tariffs, Chinese state media says

Japan and South Korea are seeking to import semiconductor raw materials from China

www.thedailystar.net

China, Japan, South Korea will jointly respond to US tariffs, Chinese state media says

South Korea's Trade, Industry and Energy Minister Ahn Duk-geun (C) poses for a photo with Japan's Economy, Trade and Industry Minister Yoji Muto (L) and China's Commerce Minister Wang Wentao (R) during the 13th Trilateral Economic and Trade Ministers' Meeting in Seoul on March 30, 2025. Photo: AFP

China, Japan and South Korea agreed to jointly respond to US tariffs, a social media account affiliated with Chinese state broadcaster CCTV said on Monday, an assertion that Seoul called "somewhat exaggerated."

The state media comments came after the three countries held their first economic dialogue in five years on Sunday, seeking to facilitate regional trade as the Asian export powers brace against US President Donald Trump's tariffs.

Japan and South Korea are seeking to import semiconductor raw materials from China, and China is also interested in purchasing chip products from Japan and South Korea, the account, Yuyuan Tantian, said in a post on Weibo.

All three sides agreed to strengthen supply chain cooperation and engage in more dialogue on export controls, the post said.

When asked about the report, a spokesperson for South Korea's trade ministry said "the suggestion that there was a joint response to US tariffs appears to have been somewhat exaggerated," and referred to the text of the countries' joint statement.

During Sunday's meeting, the countries' trade ministers agreed to speed up talks on a South Korea-Japan-China free trade agreement deal to promote "regional and global trade", according to a statement released after the meeting.

"The three countries exchanged views on the global trade environment, and as you can see in the joint statement, they shared their understanding of the need to continue economic and trade cooperation," the South Korean trade ministry spokesperson said.

Japan's foreign ministry did not immediately respond to a request for comment.

The countries' trade ministers met ahead of Trump's planned announcement on Wednesday of more tariffs in what he calls "liberation day", as he upends Washington's trading partnerships.

Beijing, Seoul and Tokyo are major US trading partners, although they have been at loggerheads amongst themselves over issues including territorial disputes and Japan's release of wastewater from the wrecked Fukushima nuclear power plant.​

 

[Saif]

Weak US economic outlook persists despite brief trade truce with China: Reuters poll

The outlook for the US economy remains weak despite a temporary cooling of the US-China trade war, a Reuters poll of economists showed, with a debate over the country's fiscal health hanging in the balance. A 90-day truce to temporarily slash steep US-China import duties has marginally reduced US

thefinancialexpress.com.bd

Weak US economic outlook persists despite brief trade truce with China: Reuters poll

REUTERS
Published :
May 21, 2025 21:52
Updated :
May 21, 2025 21:52

The One World Trade Center building stands amid the Manhattan skyline in New York City, US, July 26, 2023. Photo : REUTERS/Amr Alfiky/Files

The outlook for the US economy remains weak despite a temporary cooling of the US-China trade war, a Reuters poll of economists showed, with a debate over the country's fiscal health hanging in the balance.

A 90-day truce to temporarily slash steep US-China import duties has marginally reduced US recession risks, but the fiscal outlook is worsening ahead of an imminent vote in Congress on President Donald Trump's sweeping tax-cut bill following a sovereign credit rating downgrade from Moody's on Friday.

Economists in a May 14-21 Reuters poll were unanimous the Trump administration's policies have hurt the economy, with over 55 per cent saying "significantly hurt".

But after big downgrades to their growth and upgrades to inflation forecasts in April, economists kept these broadly unchanged in May.

"Moody's is likely sending a message that the proposed tax bill is fiscally profligate... unless there is an abrupt move, the risk is that by the time Washington gets serious about the US's fiscal problems, tariffs might be the only available lever to meaningfully reduce the deficit," noted Aditya Bhave, a senior US economist at Bank of America.

"Another round of large tariff hikes would probably be more painful for the economy than a less expansionary fiscal package."

The economy, which contracted 0.3 per cent last quarter largely due to a record surge in imports, is forecast to grow 1.5 per cent this quarter. It would grow just 1.4 per cent this year, a sharp slowdown from last year's 2.8 per cent. Next year, it was forecast to expand 1.5 per cent.

The median probability of a US recession over the coming year did, however, decline to 35 per cent from 45 per cent in April.

Economists barely changed their views on inflation, expected to average above the Fed's 2 per cent target until at least 2027, echoing consumer expectations which are already at a multi-decade high.

"The bad news is the detente virtually locks in a slow growth, sticky inflation environment as the base case for the US economy. The effective tariff rate at 13 per cent is still substantially higher than where it was coming into the year (around 2 per cent)... Policy uncertainty is high and recession risks remain elevated," said Michael Gapen, chief US economist at Morgan Stanley.

Fed officials have highlighted elevated risks of a resurgence in inflation, primarily due to US tariff policies and appear to be in no hurry to cut rates anytime soon. The federal funds rate has stayed in a 4.25 per cent-4.50 per cent range since the start of this year.

Just over half of economists, 52 of 103, predicted the Federal Open Market Committee (FOMC) would resume cutting its key interest rate next quarter, most likely in September. That was in line with interest rate futures pricing.

A significant minority, 25, expected the reduction in the final quarter and 18 saw no cuts this year. Only eight forecast a June cut, compared to nearly 40 per cent expecting at least one reduction by end-Q2 in the April survey.​

 

[Saif]

US and China set for trade talks in London on Monday

Three of U.S. President Donald Trump’s top aides will meet with their Chinese counterparts in London on Monday for talks aimed at resolving a trade dispute between the world’s two largest economies that has kept global markets on edge. U.S. Treasury Secretary Scott Bessent, Commerce Se

thefinancialexpress.com.bd

US and China set for trade talks in London on Monday

REUTERS
Published :
Jun 08, 2025 18:58
Updated :
Jun 08, 2025 23:00

A drone view shows shipping containers from China at the Port of Los Angeles, in San Pedro, California, U.S., May 1, 2025. Photo : REUTERS/Mike Blake

Three of U.S. President Donald Trump’s top aides will meet with their Chinese counterparts in London on Monday for talks aimed at resolving a trade dispute between the world’s two largest economies that has kept global markets on edge.

U.S. Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer will represent the United States in the talks, Trump announced in a post on his Truth Social platform without providing further details.

China’s foreign ministry said on Saturday that vice premier He Lifeng will be in the United Kingdom between June 8 and June 13, adding that the first meeting of the China-U.S. economic and trade consultation mechanism would be held during this visit.

“The meeting should go very well,” Trump wrote.

Trump spoke to Chinese President Xi Jinping on Thursday in a rare leader-to-leader call amid weeks of brewing trade tensions and a dispute over critical minerals.

Trump and Xi agreed to visit one another and asked their staffs to hold talks in the meantime.

Both countries are under pressure to relieve tensions, with the global economy under pressure over Chinese control over the rare earth mineral exports of which it is the dominant producer and investors more broadly anxious about Trump’s wider effort to impose tariffs on goods from most U.S. trading partners.

China, meanwhile, has seen its own supply of key U.S. imports like chip-design software and nuclear plant parts curtailed.

The countries struck a 90-day deal on May 12 in Geneva to roll back some of the triple-digit, tit-for-tat tariffs they had placed on each other since Trump returned to the presidency in January.

That preliminary deal sparked a global relief rally in stock markets, and U.S. indexes that had been in or near bear market levels have recouped the lion’s share of their losses.

The S&P 500 stock index, which at its lowest point in early April was down nearly 18% after Trump unveiled his sweeping “Liberation Day” tariffs on goods from across the globe, is now only about 2% below its record high from mid-February. The final third of that rally followed the U.S.-China truce struck in Geneva.

Still, that temporary deal did not address broader concerns that strain the bilateral relationship, from the illicit fentanyl trade to the status of democratically governed Taiwan and U.S. complaints about China’s state-dominated, export-driven economic model.

Trump has repeatedly threatened an array of punitive measures on trading partners, only to revoke some of them at the last minute. The on-again, off-again approach has baffled world leaders and spooked business executives.

China sees mineral exports as a source of leverage. Halting those exports could put domestic political pressure on the Republican U.S. president if economic growth sags because companies cannot make mineral-powered products.

In recent years, U.S. officials have identified China as its top geopolitical rival and the only country in the world able to challenge the United States economically and militarily.​

 

[Saif]

Analysts react to US-China trade agreement

U.S. and Chinese officials said they had agreed on a framework to put their trade truce back on track and remove China's export restrictions on rare earths while offering little sign of a durable resolution to longstanding trade differences. China's Vice Commerce Minister Li Chenggang said the two

thefinancialexpress.com.bd

Analysts react to US-China trade agreement

REUTERS
Published :
Jun 11, 2025 20:28
Updated :
Jun 11, 2025 20:28

Treasury Secretary Scott Bessent and Chinese vice premier He Lifeng meet in London. Photo : United States Treasury/Handout

U.S. and Chinese officials said they had agreed on a framework to put their trade truce back on track and remove China's export restrictions on rare earths while offering little sign of a durable resolution to longstanding trade differences.

China's Vice Commerce Minister Li Chenggang said the two teams had agreed on implementing their Geneva consensus and would take the agreed framework back to their leaders.

A White House official said the deal allows the U.S. to charge a 55% tariff on imported Chinese goods. This includes a 10% baseline "reciprocal" tariff, a 20% tariff for fentanyl trafficking and a 25% tariff reflecting pre-existing tariffs. China would charge a 10% tariff on U.S. imports.

MARKET REACTION:

Equity markets and the dollar were muted, with S&P 500 up 0.1%, while awaiting more detail of what was decided and whether it would stick.

QUOTES:

GENE GOLDMAN, CHIEF INVESTMENT OFFICER AT CETERA INVESTMENT MANAGEMENT, EL SEGUNDO, CA:

"Equity markets breathed a sigh of relief on news of a potential US-China trade deal. However, I would take this news with a bit of caution. While President Trump indicated favorable news that imports on Chinese imports would rise from 30% to 55% and Chinese rare-earth exports may resume, there is little news on what China gets in return. I doubt this is a one-way deal and hence the market caution seen overnight."

SAM STOVALL, CHIEF INVESTMENT STRATEGIST, CFRA RESEARCH, ALLENTOWN, PENNSYLVANIA:

“We’ve seen a relatively muted reaction to the news of a ‘deal’ with China, and to me that signals indifference. It says, OK, you have agreed to continue talking and set up a framework for future talks, but nothing all that significant has really been resolved. The market is saying, tell me something worth knowing about. And we all know that if we don’t have a comprehensive solution, it’s not going to be good. It would mean we have to purchase our 30 dolls for Christmas somewhere else, which will be much more expensive.

"This is just my own reading of this, but in the face of better-than-expected inflation numbers today, the market is struggling to hold onto its gains and I can only think that it’s that people needed to see more from the China talks. Perhaps investors sold on strength, out of the opinion that we’re overbought at this stage.”

OLIVER PURSCHE, SENIOR VICE PRESIDENT, ADVISOR, WEALTHSPIRE ADVISORS, WESTPORT, CONNECTICUT:

"It's a done deal according to President Trump, but we haven't seen any details, which is why I think the market is not reacting to it yet. As with just about everything, the devil is in the details... The other big piece of news is the U.S. and China seem to have a framework for further discussions, and that contradicts a statement of, it's a done deal.

"This morning's inflation report, while softer than expected, was largely due to falling energy prices and an indication of a further slowdown in U.S. economic activity."

ADAM BUTTON, CHIEF CURRENCY ANALYST, FOREXLIVE, TORONTO:

“Obviously, it's good news that China and the U.S. have reached some sort of agreement, and Trump has certainly tried to spin it positively. But it's not clear what path the U.S. and China are on and what they're trying to achieve. Trump hinted at this, saying he wants to expand China trade. In some ways, the U.S.-China talks have created more questions than answers. Is this tariff rate going to stick? And what exactly are the U.S. and China working towards?

“The ultimate takeaway on China is that things aren't getting worse. So, that's good. We probably built in some expectations of maybe material progress.”

JOHN PRAVEEN, MANAGING DIRECTOR, PALEO LEON, PRINCETON, NJ:

"The worst-case scenario is probably behind us. There's a little bit of face saving for both sides. From the U.S. point of view the rare earth thing was a big deal. They got an agreement. The question is whether it will be implemented. The fact they have some kind of agreement is probably at least a relief for the market."

"Both sides got a little bit of what they wanted. The fact that things that things are de-escalating is the important point. It's probably a relief for the markets."

"We'll have to wait and see if they will further scale it down. When the dust settles it will probably come down a little bit further because this level of tariff will probably cause inflationary pain for the consumer."

"When Trump and Xi meet they'll probably scale it down further. You need to save something for that meeting."

PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK:

"That's good news, obviously. We're still waiting for the full details, and it has to be ratified by both Trump and Xi, but I think that's a foregone conclusion that it will be. That's good news and relieves worries... Of course, the real thing is there is an agreement that would allow perhaps China to resume its exports of rare earth products, which I think was key to this."

ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH, FAIRFIELD, CONNECTICUT:

"It's at least a positive headline. The exchange of technology for rare earth materials is a positive and it's encouraging that the two countries are trying to work together. We'll see if Xi will approve it and we'll see what Trump does."

WASIF LATIF, PRESIDENT AND CHIEF INVESTMENT OFFICER, SARMAYA PARTNERS, PRINCETON, NEW JERSEY"

“It's getting clearer that the initial round of big, high levels of tariffs were negotiation tactics. And when you finally saw what were the chips that each side had on the table - China with its rare earth and then the US with different kind of trade related chips, including the impact to any students at universities here - you got some clarity on them both wanting to come to an agreement of sorts. Now that's good news for the market.

"However, the market had already anticipated that because that the rally that we saw from the tariff lows was already beginning to bake in a better outcome than what had initially been being put out. So the proof of that was that when the agreement was announced late last night to early this morning, you saw the futures actually begin to decline. So it felt like a little bit of sell-the-news type of situation as opposed to a real market impact because a lot of the anticipated benefits had been backed in.

"The incremental news that’s moving markets right now is the CPI print. On the longer term, the trade impact from tariffs will be interesting to see. Many folks are saying tariffs are inflationary but then other folks are saying it will be deflationary. But I think the truth will be somewhere in between.”

CHRIS WESTON, HEAD OF RESEARCH, PEPPERSTONE, MELBOURNE:

"The devil will be in the details but the lack of reaction suggests this outcome fully expected.

"While clearly a positive outcome, the lack of reaction in S&P500 futures, and the incremental moves seen in CNH or AUD, suggests achieving the framework on the Geneva agreement was fully expected – the details matter, especially around the degree of rare earths bound for the US, and the subsequent freedom for US produced chips to head East, but for now as long as the headlines of talks between the two parties remain constructive, risk assets should remain supported."

LIN GENGWEI, CO-FOUNDER AND CEO, RAIN TREE PARTNERS, SINGAPORE:

"Both sides have the pressure, and willingness to reach an agreement. This is temporary achievement in talks but will not alter the pattern of perennial Sino-U.S. rivalry.

"The U.S. will not completely remove restrictions on chip exports to China, but may relax the curbs in response to pressure from both Beijing and the domestic semiconductor sector."

MARK DONG, CO-FOUNDER OF MINORITY ASSET MANAGEMENT, HONG KONG:

"This is positive news to the market. At least now there's a bottom line that neither side is willing to cross.

"Going forward, both sides will move toward reducing the trade imbalance."

ZENG WENKAI, CHIEF INVESTMENT OFFICER, SHENGQI ASSET MANAGEMENT, HONG KONG:

"The market likely anticipated this — Trump is just TACO (Trump always chickens out)."

"Look at how countries are negotiating with the U.S. these days; it’s no longer like how Vietnam approached things early on. Japan and South Korea are taking a tougher stance. People have realised that kneeling gets you nowhere — in fact, it only invites more bullying."

CHARU CHANANA, CHIEF INVESTMENT STRATEGIST, SAXO, SINGAPORE:

"Markets will likely welcome the shift in tone from confrontation to coordination. But with no further meetings scheduled, we’re not out of the woods yet. The next step depends on Trump and Xi endorsing and enforcing the proposed framework.

"It’s important not to mistake this tactical de-escalation for a full reversal of strategic decoupling. The underlying competition around technology, supply chains, and national security remains very much intact. New issues can always emerge, and the real test will be how far this "new old deal" is implemented."

TAN XIAOYUN, FOUNDING PARTNER OF ZONSO CAPITAL, GUANGDONG:

"Talks will continue under the agreed framework, and I believe the U.S. will give in more than China to reach a deal."

"Under the current circumstances, the U.S. side faces more pressing challenges, while the Chinese side has more breathing space. China was defensive, but has turned offensive, leveraging on rare earth and market access. This marks a rebalancing in strength and clout."

MICHAEL MCCARTHY, CHIEF EXECUTIVE OFFICER, MOOMOO AUSTRALIA, SYDNEY:

"I'll be watching to see how bonds trade today on the back of this. The currency markets are taking it in stride, and given the equity markets are back to all-time highs or thereabouts, it does appear that this was very much anticipated.

"For weeks, there have been expectations of the deal. The delivery of it will likely be a market positive, with a weakening dollar and stronger equities, but it’s not a step change."

CAROL KONG, CURRENCY STRATEGIST, COMMONWEALTH BANK OF AUSTRALIA, SYDNEY:

"I think in this environment... any hints on progress on a potential trade agreement will be positive for markets.

"It will still be very hard and it will take a long time for both sides to reach a comprehensive trade agreement. That sort of comprehensive deal usually takes years to be reached, so I'm skeptical that a framework reached at the meeting in London will be comprehensive. Tensions might be de-escalated for now, but they will certainly escalate again in coming months."

RAY ATTRILL, HEAD OF FX STRATEGY AT NATIONAL AUSTRALIA BANK, SYDNEY:

"It's way too early to say that we know we're in the midst of establishing a cast iron, new US-China trade agreement. The whole year has been littered with positive omens about reaching agreements and then we haven't really seen substantial progress or we've seen backsliding on things that were seemingly agreed so.

"Our view is still that whatever does get agreed in the coming weeks and months, the baseline view is that we're going to end up with a global tariff situation which is far worse than existed prior to Trump's ascent to the presidency so we're still going to have a tariff environment we believe will be detrimental as far as global growth is concerned."

TONY SYCAMORE, MARKET ANALYST, IG, SYDNEY:

"If we keep the terms of the Geneva Agreement, we're looking at US tariffs on Chinese goods staying at 30% for a period of time and Chinese tariffs on US goods at 10%. So that's down from 145% and 125% respectively. That would be fantastic.

"Now that for me was probably the market consensus ... and now people just trying to work out whether they're gonna buy or sell the US dollar and that's I think reflecting a bit of that indecision.

"That's why U.S. equity markets are holding at this point of time. I still feel like they're overcooked and they need to pull back. It's just been a remarkable run and we're sort of pushing up now against the record highs from February, so for me, it would make sense for them to take a breather."

DAVID CHAO, GLOBAL MARKET STRATEGIST, ASIA PACIFIC, INVESCO, HONG KONG:

"The recent headlines that we've seen is that the US and China - they're ready to make a deal, I think from both sides, and that is a very good sign for markets as well as for policymakers in both countries. Because ultimately, cooler heads will prevail, and we think that the road has been laid for closer dialogue between the top leaders between the two countries.

"Today's news about the US and China striking a potential deal on things like rare earths or access to semiconductors or jet engine equipment, that is a very good indication that we have moved through peak tariff uncertainty."​

 

[Saif]

Lutnick says US tariff levels on China won't change

US Commerce Secretary Howard Lutnick said on Wednesday that the 55% tariffs imposed by the United States on China will not change after a trade deal was struck between the two countries. A US-China trade deal is "done," US President Donald Trump said earlier in the day, hours after negotiators fro

thefinancialexpress.com.bd

Lutnick says US tariff levels on China won't change

REUTERS
Published :
Jun 11, 2025 21:55
Updated :
Jun 11, 2025 21:55

US Secretary of Commerce Howard Lutnick waves as he arrives at Lancaster House, on the second day scheduled for trade talks between the US and China, in London, Britain, June 10, 2025. Photo : REUTERS/Toby Melville/Files

US Commerce Secretary Howard Lutnick said on Wednesday that the 55% tariffs imposed by the United States on China will not change after a trade deal was struck between the two countries.

A US-China trade deal is "done," US President Donald Trump said earlier in the day, hours after negotiators from Washington and Beijing agreed on a framework to get a fragile trade truce back on track.

"You can definitely say that," Lutnick told CNBC in an interview when asked if the tariff levels on China would not change.

The trade deal, which needs to signed by both Trump and Chinese President Xi Jinping, would remove Chinese export restrictions on rare earth minerals and other critical industrial components.

Lutnick also said China has agreed to examine how it can do more business with the US. He said that trade deals with other countries can be expected starting next week.​

 

[Saif]

Oil rises to 7-week high on US-China trade deal

Oil prices rose to their highest in seven weeks on Wednesday as U.S. President Donald Trump said a deal had been done with China, heightening expectations of a de-escalation in trade tensions between the world's two largest economies. Brent crude futures were up $1.15, or 1.7%, to $68.02 a barrel

thefinancialexpress.com.bd

Oil rises to 7-week high on US-China trade deal

REUTERS
Published :
Jun 11, 2025 21:06
Updated :
Jun 11, 2025 21:06

Miniatures of oil barrels and a rising stock graph are seen in this illustration taken January 15, 2024. Photo : REUTERS/Dado Ruvic/Illustration

Oil prices rose to their highest in seven weeks on Wednesday as U.S. President Donald Trump said a deal had been done with China, heightening expectations of a de-escalation in trade tensions between the world's two largest economies.

Brent crude futures were up $1.15, or 1.7%, to $68.02 a barrel at 1249 GMT, while U.S. West Texas Intermediate crude was up $1.31, or 2%, to $66.29. At that level, WTI reached its highest in more than two months.

Trump said Beijing would supply magnets and rare earth minerals and the U.S. will allow Chinese students in its colleges and universities. Trump added the deal is subject to final approval by him and President Xi Jinping.

The trade-related downside risk in oil has been temporarily removed, although the market reaction has been tepid as it is not clear how economic growth and global oil demand will be affected, PVM analyst Tamas Varga said.

Meanwhile, Trump said he was less confident that Iran would agree to stop uranium enrichment in a nuclear deal with Washington, according to an interview released on Wednesday.

For its part, Iran threatened to strike U.S. bases in the Middle East if nuclear negotiations fail and conflict arises with the United States.

Ongoing tension with Iran means its oil supplies are likely to remain curtailed by sanctions.

Supplies will increase though as OPEC+ plans to increase oil production by 411,000 barrels per day in July as it looks to unwind production cuts for a fourth straight month.

"Greater oil demand within OPEC+ economies – most notably Saudi Arabia – could offset additional supply from the group over the coming months and support oil prices," said Capital Economics' analyst Hamad Hussain in a note.

In the U.S., consumer prices increased less than expected in May, deepening the conviction in financial markets that the Federal Reserve will start cutting interest-rate cuts by September. Lower interest rates can spur economic growth and demand for oil.

Later on Wednesday, markets will focus on the weekly U.S. oil inventories report from the Energy Information Administration.

U.S. crude oil stocks fell by 370,000 barrels last week, according to market sources who cited American Petroleum Institute figures on Tuesday.

​

 

[Saif]

US, China sign trade deal

President Donald Trump has announced that the United States and China have signed a trade agreement, and expressed optimism about reaching a similar deal with India in the near future. Speaking late Thursday, Trump confirmed, “We just signed with China the other day,” though he provide

thefinancialexpress.com.bd

US, China sign trade deal
Trump hopeful of deal with India

FE ONLINE DESK
Published :
Jun 27, 2025 13:30
Updated :
Jun 27, 2025 13:30

President Donald Trump has announced that the United States and China have signed a trade agreement, and expressed optimism about reaching a similar deal with India in the near future.

Speaking late Thursday, Trump confirmed, “We just signed with China the other day,” though he provided no further details.

US Commerce Secretary Howard Lutnick, in an interview with Bloomberg TV, also confirmed the development, stating that the agreement was “signed and sealed” two days ago.

However, like Trump, he did not disclose specifics of the deal, reports AP.

The agreement comes after earlier negotiations in Geneva in May, where both countries agreed to postpone significant tariff hikes that threatened to disrupt trade flows. Subsequent talks in London laid the groundwork for a formal agreement, which Trump and Lutnick referenced.

“The president likes to personally close these deals. He's the ultimate dealmaker. We’re going to see one deal after another,” Lutnick added.

Meanwhile, Beijing has not formally confirmed the signing of a new agreement. However, the Chinese government announced earlier this week that it is expediting approvals for rare earth exports—critical materials used in advanced technologies like electric vehicles. Restrictions on rare earth exports have been a major sticking point in US-China trade relations.

The Chinese Commerce Ministry stated on Thursday that authorities are accelerating the review of rare earth export licenses and have already approved a number of qualified applications.​

 

[Saif]

Trump, EU's von der Leyen to meet on Sunday to clinch trade deal

European Commission President Ursula von der Leyen is set to meet US President Donald Trump on Sunday to clinch a trade deal for Europe that would likely see a 15 per cent baseline tariff on most EU goods, but end months of uncertainty for EU companies. Before the meeting, expected at 1530 GMT on

thefinancialexpress.com.bd

Trump, EU's von der Leyen to meet on Sunday to clinch trade deal

REUTERS
Published :
Jul 27, 2025 18:57
Updated :
Jul 27, 2025 18:57

US President Donald Trump waves on the golf course at Trump Turnberry resort in Turnberry, Scotland, Britain, July 26, 2025. Photo : REUTERS/Phil Noble/Files

European Commission President Ursula von der Leyen is set to meet US President Donald Trump on Sunday to clinch a trade deal for Europe that would likely see a 15 per cent baseline tariff on most EU goods, but end months of uncertainty for EU companies.

Before the meeting, expected at 1530 GMT on Trump's golf course in Turnberry, western Scotland, US and EU teams were in final talks on tariffs for crucial sectors like cars, steel, aluminium or pharmaceuticals.

US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick flew to Scotland on Saturday and EU Trade Commissioner Maros Sefcovic arrived on Sunday morning.

"We're cautiously optimistic that there will be a deal reached," said a Trump administration official, who spoke on condition of anonymity. "But it's not over till it's over."

Ambassadors of EU governments, on a weekend trip to Greenland organised by the Danish presidency of the EU, held a teleconference with EU Commission officials on Sunday to agree on the amount of leeway von der Leyen would have in the talks.

In case there is no deal and the US imposes 30 per cent tariffs from August 1, the EU has prepared counter-tariffs on 93 billion euros ($109 billion) of US goods.

EU diplomats have said a deal would likely include a broad 15 per cent tariff on EU goods imported into the US, mirroring the US-Japan trade deal, along with a 50 per cent tariff on European steel and aluminium for which there could be export quotas.

The EU deal would be a huge prize, given that the US and EU are each other's largest trading partners by far and account for a third of global trade.

EU officials are hopeful that a 15 per cent baseline tariff would also apply to cars, replacing the current 27.5 per cent auto tariff.

POSSIBLE EXEMPTIONS

Some expect the 27-nation bloc may be able to secure exemptions from the 15 per cent baseline tariff for its aerospace industry and for spirits, though probably not for wine.

The EU could also pledge to buy more liquefied natural gas from the US, a long-standing offer, and boost investment in the United States.

Trump told reporters there was "not a lot" of wiggle room on the 50 per cent tariffs that the US has on steel and aluminium imports, adding, "because if I do it for one, I have to do it for all."

The US president, in Scotland for a few days of golfing and bilateral meetings, told reporters upon his arrival on Friday evening that von der Leyen was a highly respected leader and he was looking forward to meeting with her.

He said there was a 50-50 chance that the two sides could reach a framework trade pact, adding that Brussels wanted to "make a deal very badly".

The EU now faces US tariffs on more than 70 per cent of its exports, with 50 per cent on steel and aluminium, an extra 25 per cent on cars and car parts on top of the existing 2.5 per cent and a 10 per cent levy on most other EU goods. Trump has said that without a deal, he would hike the rate to 30 per cent on August 1, a level EU officials said would wipe out whole chunks of transatlantic commerce.

Further tariffs on copper and pharmaceuticals are looming. The uncertainty and higher tariffs have already hit profits of EU companies in several sectors.

A 15 per cent tariff on most EU goods would remove uncertainty but would be seen by many in Europe as a poor outcome compared to the initial European ambition of a zero-for-zero tariff deal on all industrial goods.

Seeking to learn from Japan, which secured a 15 per cent baseline tariff with the US in a deal earlier this week, EU negotiators spoke to their Japanese counterparts in preparation for Sunday's meeting.

For Trump, aiming to reorder the global economy and reduce decades-old US trade deficits, a deal with the EU would be the biggest trade agreement, surpassing the $550 billion deal with Japan.

So far, he has reeled in agreements with Britain, Japan, Indonesia and Vietnam, although his administration has failed to deliver on a promise of "90 deals in 90 days."​