The Week Ahead in International Trade: Eu prepares Trump tariff response, Mansion House speech and inflation

This week opens with EU ministers meeting to decide how Europe responds to US president Donald Trump’s latest tariff threat, while UK chancellor Rachel Reeves is set to give a speech outlining the next trade-related government strategy.

EU readies tariff response

As negotiations continue between Brussels and Washington over tariffs, the EU has paused its retaliation while hinting that it might hit harder in the future.

EU trade ministers have today (14 July) agreed to delay retaliatory measures against the US, after president Donald Trump said that EU imports into the US would face a 30% tariff.

European Commission president, Ursula von der Leyen, told a press conference yesterday (13 July) that the EU would “extend the suspension of our countermeasures until early August.”

“At the same time, we will continue to prepare for the countermeasures so we are fully prepared.”

She made the comments at the signing of a new free trade agreement with Indonesia, adding that an important part of preparing for US tariffs is “diversifying” the EU’s trade relations.

In a separate statement, von der Leyen confirmed that the EU was continuing to “work towards an agreement” by 1 August, when US tariffs are set to come into force. However, today’s meeting is expected to expand the list of goods on the ‘anti-coercion agreement, despite the delay in retaliation.

Mansion House

Tuesday (15 July) will see UK chancellor Rachel Reeves and Bank of England (BoE) governor Andrew Bailey deliver set-piece speeches at Mansion House in the City of London.

Reeves is expected to pledge a ‘big bang’ for the City in her speech, including aspects of the latest strategy to be published: Financial Services Growth and Competitiveness Strategy. With Reeves expected to cut “reems” of red tape, her speech is the latest in a series of events outlining the Labour government’s approach to trade.

Observers can also look for more hints on BoE interest rate decisions. Bailey has already said he anticipates another rate cut if employment continues to fall, with a formal decision expected 7 August.

Inflation sticks

Both financial decisionmakers speak as world governments continues to battle ‘sticky’ inflation rates, which have not fallen as quickly as many consumers (and voters) would have liked.

The EU, China, US and UK will all publish reports on either consumer price index or inflation data later this week, as both the tariff war and ongoing Red Sea crisis add to the cost pressures facing many businesses and individuals.

Additional reports, such as the OPEC oil market report and the OECD-FAO Agricultural Outlook, could also give an idea of how costs for basic items like food and energy could rise and fall in the months ahead.

The issue of cost of living also impacts elections, with voters showing a willingness to punish governments unable to deal with rising prices. Japan holds elections for its Upper House on Saturday (19 July) – with the ruling Liberal Democratic Party facing the prospect of losing their majority – while Tuesday sees primaries for a vacant house seat in the US state of Arizona.