EU’s von der Leyen has ‘good exchange’ on trade with Trump, as US threatens Brics group with extra 10% tariff – business live

EU’s von der Leyen has ‘good exchange’ with Trump

Lisa O’Carroll

European Commission president Ursula von der Leyen and Donald Trump had a “good exchange” on Sunday, raising hopes of a deal by Wednesday, the US president’s self-imposed deadline for trade deals.

Olof Gill, the EU trade spokesperson, told reporters during a daily press briefing that:

“We want to reach a deal with the U.S. We want to avoid tariffs. We believe they cause pain. We want to achieve win-win outcomes, not lose-lose outcomes”.

As covered in our introduction, the Trump administration has said letters would go out from today notifying trading partners who don’t have a deal by 9 July of the higher tariffs that would take effect on August 1.

The EU is demanding immediate relief from tariffs on cars, which currently stand at 29.5% and reduction of tariffs in steel, as part of a UK-style framework deal that is being negotiated.

Both sides were locked in talks over the weekend after a high level delegation led by trade commission Maros Šefčovič to Washington last week.

Among those he met were treasury secretary Scott Bessent who remarked over the weekend that “good progress” had been made with the EU after and initial impasse.

Incidentally, our Europe Blog has all the main developments from across the continent:

Key events

The goal posts are shifting again on the trade and tariff issue, reports Brad Bechtel,
global head of FX at Jefferies.

Bechtel explains:

President Trump has indicated countries will have until Aug 1 before new tariffs kick-in as they rush to complete trade deals with countries around the world.
July 9 had been the working deadline and the administration is indicating that a slew of deals is in the hopper for this week, but the new quasi-extension was thrown out there this past weekend. Trump also indicated that trade deals will be announced today at 12pm. The EU and Japan are two of the larger deals to be resolved and EU officials claimed they were still working towards the Wednesday deadline to come to a conclusion.
Trump indicating he will ‘have a deal or letter with most nations done by July 9’ but will start announcing deals today. He also threw in an extra 10% tariff for anyone ‘aligning’ with BRICS, whatever that means.

Bangladesh’s interim government is anticipating a favorable resolution in trade negotiations with the US.

“We’ve had at least seven rounds of negotiations, both virtual and in-person, and we expect a positive outcome,” commerce secretary Mahbubur Rahman said in an interview on Monday, Bloomberg reports.

Rahman also said the US has hinted at creating two separate trade bands — one for least developed countries or LDCs, a group that includes Bangladesh, and the other for the remaining trading partners.

Bangladesh was one of the countries hardest hit by Donald Trump’s trade war announcement of early April; it faced a new tariff of 37% on its imports to the US.

EU’s von der Leyen has ‘good exchange’ with Trump

Lisa O’Carroll

Olof Gill, the EU trade spokesperson, told reporters during a daily press briefing that:

“We want to reach a deal with the U.S. We want to avoid tariffs. We believe they cause pain. We want to achieve win-win outcomes, not lose-lose outcomes”.

The EU is demanding immediate relief from tariffs on cars, which currently stand at 29.5% and reduction of tariffs in steel, as part of a UK-style framework deal that is being negotiated.

Both sides were locked in talks over the weekend after a high level delegation led by trade commission Maros Šefčovič to Washington last week.

Among those he met were treasury secretary Scott Bessent who remarked over the weekend that “good progress” had been made with the EU after and initial impasse.

Incidentally, our Europe Blog has all the main developments from across the continent:

“Time is money” when it comes to tariff negotiations between the European Union and the United States, a German government spokesperson has said.

The spokesperson says:

“Time is money in the truest sense of the word.”

They added that German Chancellor Friedrich Merz had discussed the matter with EU Commission President Ursula von der Leyen and the leaders of France and Italy at the weekend, explaining:

“In this respect, we should give ourselves another 24 or 48 hours to come to a decision.”

Kremlin denies BRICS works against other countries

The Kremlin has insisted that the BRICS group of nations had never been working to undermine other countries.

Kremlin spokesman Dmitry Peskov said the Kremlin had taken note of Donald Trump’s threat to impose a 10% tariff on those aligning themselves with its “anti-American policies”.

Peskov added:

“We have indeed seen such statements by President Trump, but it is very important to note here that the uniqueness of a group like BRICS is that it is a group of countries that share common approaches and a common world view on how to cooperate based on their own interests.
“And this cooperation within BRICS has never been and will never be directed against any third countries”.

The US-Vietnam trade deal announced last week “raises hopes” for agreements with other emerging markets (EMs), says Jon Harrison of City firm TS Lombard.

Harrison told clients:

The US administration has indicated that deals are close to completion for 10 major trading partners. Most larger and mid-sized EM are among the major trading partners, but are aiming for a tariff of less than the 20% agreed with Vietnam, while few will be prepared to allow the zero tariff access to all US products granted by Vietnam.
At the same time, however, most EM have more to offer in terms of delivering investment and jobs to the US as well as being potentially larger markets for US exports. Our base case remains that for most EM there will either be phase one deals, or sufficient progress made to justify a delay in threatened tariffs.
There are nonetheless risks to this scenario as the deadline approaches, with lack of progress and potential sticking points in a number of countries, including India, South Korea and Taiwan, meaning that one or more countries could face punitive tariffs, even if only temporarily.
South Korea, for example, has asked to delay the deadline, although Trump has previously said that in general there would be no delays

The indications that new US tariffs could kick in on 1 August, rather than this week, could bring some relief to markets.

But that’s probably countered by Donald Trump’s threat of a new 10% tariff on imports from BRICS-aligned countries.

This has left the Stoxx 600 up 0.16% in early trading, with Germany’s DAX index gaining 0.6%.

Joshua Mahony, chief market analyst at Rostro, explains:

A mixed affair for European equities this morning, with traders weighing up the implications of Donald Trump’s decision to delay the reciprocal tariffs (against) set against the threat of a 10% BRICS tax. Whether it is a case of him chickening out, he clearly does not want to implement the reciprocal tariffs in their original format, and thus what started as April, pushed to July, and now turns to August.
There will be many that see this as weakening his hand as nations note his unwillingness to follow through on his threats. Nonetheless, this once again provides markets with a breather, bringing over three-weeks longer until tariffs kick in.

After last week’s gyrations, the UK bond market is looking calmer this morning.

The prices on UK short and long-term government bonds have risen slightly, which has pulled down yields (the effective interest rate on the debt) a little.

The yield on 10-year gilts is hovering around 4.538%, down two basis points from Friday night’s close of 4.552%.

That’s lower than the 4.633% hit last Wednesday, when uncertainty over chancellor Rachel Reeves’s future hit the bond market. But it’s still higher than the 4.498% set at the end of June, before worries about change at the top of the Treasury pushed up borrowing costs.

Dean Turner, economist at UBS, suggests gilts could be attractive at current levels, telling clients:

We learned last week that any attempt to curb spending is going to prove almost impossible for this government, even with such a large majority. This inevitably means taxes are going up. The sooner the government is honest with the public and gets the deed done, the better.
For investors in the gilt market, the volatility is likely here to stay for the time being. But this does not mean gilts do not look attractive, especially relative to cash, as interest rates will be much lower by the time the government’s second anniversary comes around.

Despite the uncertainty over tariffs, investor sentiment in the eurozone has hit its highest level in over three years.

The Sentix index, which tracks euro area investor morale, has risen to 4.5 points this month, a rise of 4.4 points, its highest reading since February 2022.

#sentix Economic Index: Upswing gains breadth – third increase in a row
In the eurozone, the overall index rose by 4.4 points to reach +4.5 points, its highest level since February 2022. Current situation values in particular are now picking up. A plus of +5.8 points means the… pic.twitter.com/nmjZ65jsdt
— sentix (@sentixsurvey) July 7, 2025

A measure of the current economic situation rose, but remained in negative territory, while a gauge of economic expectations also increased.

Sentix says:

Overall, the global upturn is gaining in breadth. The US economy in particular is making up ground. After the weak previous months, the US economy showed the greatest growth in July. The regions of Japan and Asia ex Japan are also providing growth impetus.

Oof! Tesla’s shares are down over 7% in pre-market trading in New York, as investors react to Elon Musk’s launch of the new America party.

That, by my maths, knocks around $70bn of Tesla’s market value, pulling it below the $1tn level to around $945bn.

Victoria Scholar, head of investment at interactive investor, says:

Much to the dismay of Tesla’s shareholders, after a brief political hiatus, it looks like Musk is renewing his focus on Washington once again, meaning he’ll have less time to spend on the electric vehicle giant. There is a distant idea that Musk garnering great political influence could mean a bounce back in interest in the green energy transition and a boost to green subsidies which would help Tesla. However, the more realistic, shorter-term likelihood is that Musk’s political shift is negative for Tesla since it comes at a time when the company’s performance is lagging, which necessitates a more hands-on approach from its boss.
It looks like shares in Tesla will open lower today on Wall Street, with its Frankfurt listed shares in the red this morning. The stock is already down around 17% this year, sharply underperforming most mega cap tech names and the wider US stock market. Its latest figures revealed that Tesla is struggling amid Musk’s political focus and increased competition from EV rivals. The company suffered a 13.5% drop in quarterly deliveries in April to June, falling short of Wall Street’s estimates. It looks like there’s a long, bumpy, uphill drive ahead for Tesla.”

The co-head of Japan’s opposition Japan Innovation Party has called on Tokyo to diversify its trade ties beyond the US market, and focus on countries favouring free trade.

Hirofumi Yoshimura warned that Donald Trump’s tariffs show that the US is a source of uncertainty that could hurt its economy.

Citing Europe as an example, he told Reuters:

“Japan should expand trade ties with countries that focus on free trade.”
“Instead of standing on just one, big pillar like the U.S., Japan should stand on, say, five to 10 smaller pillars. That’s a better approach to avoid its roof from falling off.”

China opposes tariffs being used as tool of coercion

China opposes tariffs being used as a tool to coerce others, the Chinese foreign ministry said on Monday, after Donald Trump threatened an extra 10% tariffs on countries aligning themselves with the BRICS group of developing nations.

The use of tariffs serves no one, said Mao Ning, spokesperson of the ministry, at a regular press conference, Reuters reports.

Tesla shares drop after Musk launches America Party

Over in Frankfurt, shares in Tesla are sliding as the row between Elon Musk and Donald Trump escalates.

Telsa have fallen 3% in early trading, an indication that they could fall when Wall Street trading begins later today, as investors react to Musk’s plan to launch a new US political party called the America party.

Trump called the idea “ridiculous”, and claimed Musk had gone completely ‘off the rails’.

Veteran tech analyst Dan Ives of Wedbush said Musk was Tesla’s “biggest asset” and his decision to dive deeper into politics could hurt the car maker’s share price.

Ives wrote:

“Tesla needs Musk as CEO and its biggest asset and not heading down the political route yet again…while at the same time getting on Trump’s bad side.
“It would also not shock us if the Tesla board gets involved at some point given the political nature of this endeavour depending on how far Musk takes it.”

FTSE 100 opens slightly lower as Shell slides

London’s stock market has slipped very slightly at the start of trading.

The FTSE 100 index of blue-chip shares has dropped by 9 points, or 0.1%.

Shell are the top faller, down 1.8%, after lowering its forecast for gas output and natural gas production this morning, and predicting that trading and optimisation at its integrated gas division in the last quarter will be significantly lower than in Q1.

Standard Chartered (+1.4%), the Asia-Pacific focused bank, are the top riser.

UK house prices flat in June, Halifax reports

UK house prices stagnated last month, new data from lender Halifax shows.

Halifax reports that house prices were effectively unchanged month-on-month in June with the average price of a property sold coming in at £296,665, compared to £296,782 in May.

This pulled the annual rate of house price inflation down to 2.5% from 2.6% in May.

Northern Ireland has by far the strongest annual price growth in the UK, with prices up by +9.6% over the past year.

But, growth was much more subdued in the South West of England, and London, with prices rising by just +0.5% and +0.6% respectively.

Amanda Bryden, head of mortgages at Halifax, said the UK housing market “remained steady in June”, adding:

“The market’s resilience continues to stand out and, after a brief slowdown following the spring stamp duty changes, mortgage approvals and property transactions have both picked up, with more buyers returning to the market. That’s being helped by a few key factors: wages are still rising, which is easing some of the pressure on affordability, and interest rates have stabilised in recent months, giving people more confidence to plan ahead.

Bryden pointed out that affordability is still stretched, particularly for those coming to the end of fixed-rate deals, explaining:

The economic backdrop also remains uncertain; while inflation has eased, it’s still above target, and there are signs the jobs market may be softening.

According to @HalifaxBank average house price growth was flat in June making the average property price now £296,665, down £117 on May’s efforts. Moving forward increased flex around mortgage lending and two rate cuts has the lender expectant of a more buoyant market towards the… pic.twitter.com/jdCqNEjyGt
— Emma Fildes (@emmafildes) July 7, 2025

Most Asia-Pacific markets are in the red today.

Japan’s Nikkei 225 index has dropped by 0.55%, Hong Kong’s Hang Seng is down 0.4%, Australia’s S&P/ASX is off 0.15%, and India’s Sensex has slipped by 0.1%

Jim Reid, market strategist at Deutsche Bank, says:

“Asian equity markets are a little nervous this morning, perhaps on Trump’s BRICs comments.”

Some BRICS currencies have also dipped this morning.

South Africa’s rand has fallen 1%, to 17.75/$ from 17.57/$ on Friday night.

India’s rupee has slipped by 0.5% against the dollar, to 85.8 rupees/$ down from 85.3925/$ at the end of last week.

China’s yuan has slipped by 0.1%, while Brazil’s real and Russia’s rouble are both flat.

Many currencies are slipping against the US dollar this morning, as traders await news of the tariff ‘deals and letters’ which Donald Trump says he will issue later today.

The euro has slipped by 0.15% against the dollar to $1.176, not too far from the near-four-year high touched last week.

The Australian dollar has lost 0.7%, while New Zealand’s dollar has dropped by 0.95%.

The British pound is also weakening a little, down 0.35% at just over $1.36.

So far, only the UK, China and Vietnam have reached any kind of trade agreements with the US in the last 90 days….

Donald Trump threatens extra 10% tariff for “anti-American” Brics policies

Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy.

Donald Trump has targeted the BRICS group of developing nations in the latest salvo of his ongoing trade war, as the deadline to agree deals before the president’s 90-day tariff pause looms.

Trump has warned overnight that he will impose a new 10% tariff on any country that aligns itself with the BRICS group, claiming they are “anti-American”.

Writing on his Truth Social site, Trump declared:

Any Country aligning themselves with the Anti-American policies of BRICS, will be charged an ADDITIONAL 10% Tariff. There will be no exceptions to this policy. Thank you for your attention to this matter!

Trump’s attack comes after the Brics group — which was originally made up of Brazil, Russia, India, China and South Africa but now includes other nations — met in Brazil at the weekend.

Brazil’s president Luiz Inacio Lula da Silva, told the meeting in Rio de Janeiro that BRICS was the heir to the “Non-Aligned Movement” – the bloc of countries who declined to ally with either side in the Cold War.

Lula criticised the move (driven by Trump) towards increased spending on the military rather than on international development, pointing out: “It is always easier to invest in war than in peace”.

He told leaders they were witnessing “the unparalleled collapse of multilateralism”, before warning:

“If international governance does not reflect the new multipolar reality of the 21st century, it is up to BRICS to help bring it up to date.”

The BRICS group also condemned US and Israeli attacks on Iran and urged “just and lasting” solutions to conflicts across the Middle East.

All of which appears to have stirred Trump into another tariff threat.

There’s also confusion this morning about the status of the original ‘liberation day’ tariffs which Trump announced at the start of April, and then paused for 90 days after the markets slumped.

The president told reporters on Sunday that his administration plans to start sending letters later today to US trade partners dictating new tariffs.

But there’s confusion about when these levies would kick in. Trump implied they would start on Wednesday, saying “I think we’ll have most countries done by July 9, yeah. Either a letter or a deal.”

But commerce secretary Howard Lutnick then weighed in to explain: