US tariffs will likely continue to dominate the trade news this week, despite the EU yesterday securing a deal to stave off a looming trade war.
After his meeting with European Commission president Ursula von der Leyen yesterday, Sir Keir Starmer is next in line for a visit to US president Donald Trump’s Scotland-based golf course today, with steel tariffs on the agenda.
Interest rate decisions and economic releases also feature in today’s weekly preview of the trade stories set to dominate the news in the days ahead.
Tariff turning points?
It’s another significant week in the ongoing tariffs saga, after Trump and von der Leyen yesterday agreed a deal to cut tariffs to 15% on the bloc’s US exports. It’s just in time for the EU, which was set to face a higher 30% tariff rate from Friday.
That deadline is still in place for a variety of countries yet to strike a deal, including major US trading partner South Korea, among others.
US Treasury secretary Scott Bessent is also set to meet with Chinese officials in Sweden this week to discuss an extension to a 12 August deadline currently in place for tariffs on Chinese exports.
Trump-Starmer meeting
Trump is meeting British prime minister Sir Keir Starmer today in Scotland, with the Gaza crisis likely to be top of the agenda.
Duties levied on British steel could also be discussed though, with a 25% tariff currently in place; this figure is already half the global rate currently set by the US.
The US has agreed to a quota of tariff-free UK steel imports on the condition that that steel is actually melted and poured in the UK, rather than imported into the UK for processing. According to reporting by the FT, however, “technical and legal” challenges have prevented the quota from entering operation on the US side, something British officials are looking to fix.
Ahead of the discussions between Trump and Starmer, the White House said that they would allow for the two sides to "refine the historic US-UK trade deal", according to Sky News.
Major rate decision
The latest interest rate decision from the US Federal Reserve, due on Wednesday, could be a pivotal moment after Trump has expended significant energy encouraging chair Jerome Powell to opt for a cut.
The two were in open disagreement before the world’s press last week, disputing the cost of renovations to the Fed’s headquarters. It follows months of sometimes heated rhetoric from Trump, who has referred to Powell as a “stubborn mule” over his reluctance to cut the rate due to inflation fears.
A host of other countries will also make interest rate decisions this week, including Canada and Brazil.
The Bank of Japan’s decision will also be the one to watch – the country’s tariff deal with the US, which cuts the overall rate on it exports to the North American nation to 15%, is thought to have created some breathing room to hike the rate. Deputy governor Shinichi Uchida suggested last week that it could help the country hit its target inflation rate of 2%, allowing it to raise rates which are currently negative in real term.
Stats out
There will be another raft of growth stats out this week, including both US Q2 GDP and a flash estimate of EU growth over the last month.
Spain, one of the EU’s fastest growing economies, will also publish its Q2 estimate, as will Ireland, which faces major concerns over the effect of US tariffs, and Germany, where the automotive industry has voiced significant concerns of its own.
Manufacturing PMIs for Germany, the UK, US, China and others will also paint a clearer picture of industrial production across the global economy when they’re published on Friday.
Other dates for the diary
Monday: ASEAN meeting in Malaysia to discuss the environment
Tuesday: IMF Economic Outlook Update published
Wednesday: Ofcom Media Nations Report published
Thursday: Helsinki+50 conference begins, fifty years on from the Helsinki Final Act
Friday: Edinburgh Fringe begins
Saturday: National Eisteddfod begins in Wales
Sunday: OPEC+ meeting
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