Economy
EU agrees to implement last year’s US trade deal after Trump threats
After nearly a year of fluctuating trade tensions, the European Union reached an agreement Wednesday to implement its side of a trade pact with the U.S., seen as a crucial step in de-escalating the tariff disputes sparked by President Donald Trump.
Hailing the “good news,” German Chancellor Friedrich Merz said it showed the bloc was “delivering on its commitments” and bringing “security and stability” for European businesses – which faced a new Trump tariff threat unless the deal kicks in by July 4.
The 27-nation bloc struck an accord with Washington last July, setting levies on most European goods at 15%, but to Trump’s frustration, it had yet to make good on its pledge to scrap levies on most U.S. imports in return.
Negotiators from the EU’s parliament and capitals wrangled late into the night in Strasbourg, finally emerging long after midnight with news of an agreement to move forward.
“This means we will soon deliver on our part,” EU chief Ursula von der Leyen said on social media, calling for the implementation process to be quickly finalized as Trump’s deadline looms.
“Together, we can ensure stable, predictable, balanced, and mutually beneficial transatlantic trade.”
The EU agreement puts the bloc well on track for ratification by July 4 – short of which the U.S. leader threatened “much higher” tariffs and already vowed to raise duties on European cars and trucks from 15% to 25%.
Trump’s tariff blitz targeting steel, aluminium, car parts and other sectors hit the bloc hard before the deal struck with von der Leyen in Turnberry, Scotland last year – and has jolted it to cultivate trade ties around the world.
But the EU cannot afford to neglect the 1.6-trillion-euro ($1.9-trillion) relationship with the U.S., its largest trade partner.
‘Get what you need’
The EU parliament gave the deal a conditional green light in March, after months of delay caused by Trump’s designs on Greenland and a U.S. Supreme Court ruling striking down many of the president’s tariffs.
Parliament was under pressure to drop several amendments the Americans considered unacceptable, but trade committee head Bernd Lange – whose job was to hammer out a stance between haggling factions – played down the concessions extracted from lawmakers.
“One of my favorite songs from the Rolling Stones is, ‘You can’t always get what you want’. But if you try, you will get what you need – and indeed, we got what we need,” he told reporters at a press conference on Wednesday.
“We need a safety net in the relation with the United States,” Lange said, calling U.S. trade policy under Trump “totally unsecure and unpredictable.”
Among the safeguards built into the final text, the European Commission can move to suspend the accord if the U.S. fails to meet its commitments or disrupts trade and investment, including by “discriminating against or targeting EU economic operators.”
It also gives the EU means to address spikes in U.S. imports “that cause or threaten to cause serious injury to domestic producers,” with suspension once again a possible outcome.
There were clear compromises too, with the text notably giving the United States until the end of the year to drop surtaxes above 15% on steel components, rather than making it a precondition as parliament wanted.
Another concession was over so-called “sunrise” and “sunset” clauses under which the EU side of the accord would kick in once the U.S. makes good on its pledges, and would expire unless renewed in 2028.
The sunrise clause was removed altogether, while the sunset was pushed back to the end of 2029.
The pan-European agri-business group Copa-Cogeca welcomed the overall deal as a “step towards greater certainty for farmers” but vowed to remain vigilant over potential ill-effects.
Similarly, Germany’s auto industry association VDA broadly welcomed the agreement but also warned the safeguards risked upsetting the apple cart with the U.S. side – calling for matters to now be finalized “as quickly as possible.”
The eldest son of the late Isak Andic, founder of the clothing chain Mango, has been arrested over his father’s death during a hiking trip in December 2024, Spanish police said Tuesday.
Jonathan Andic, who was alone with his 71-year-old father when the retail magnate plunged to his death in the Montserrat mountains near Barcelona, was taken into custody, Catalan regional police said, confirming a report in the daily La Vanguardia newspaper.
Authorities said at the time that he fell from a height near the Salnitre caves in Collbato, an area marked by steep drops and ravines.
Investigators initially treated the death as an accident, with early findings suggesting Isak may have slipped. A judge closed the case in January 2025 after finding no evidence of criminal wrongdoing.
However, investigators with Catalonia’s regional police force, the Mossos d’Esquadra, along with prosecutors and the court, reopened the investigation in October 2025 after citing inconsistencies in Jonathan Andic’s testimony, according to the reports.
Jonathan Andic has denied any responsibility for his father’s death and has maintained that the fall was accidental.
British banking major Standard Chartered announced on Tuesday plans to slash thousands of jobs by 2030 as artificial intelligence replaces employees in a range of administrative roles.
The Asia-focused lender said in a statement it plans to cut more than 15% of the roles identified, amounting to around 7,800 posts.
The bank, which employs around 82,000 worldwide, did not specify in which countries the cuts would occur.
“Our next phase of our growth will be supported by a simpler, faster and more connected operating model,” it said in a statement, adding that it was seeking to “streamline processes, improve decision-making and enhance both client service and internal efficiency.”
“We are investing in the capabilities that will compound our competitive advantages and drive sustainable growth and higher quality returns over time, with clear targets in place,” Standard Chartered chief executive Bill Winters said in the statement.
It said it hoped the changes would drive productivity improvements to help raise income per employee by around 20% by 2028.
“Our strategy is grounded in a simple belief: the world is becoming more connected, more complex and more cross-border,” Winters added.
Following the update, shares in the group were down 0.9% on London’s benchmark FTSE 100 index, which was up 0.5% overall in late morning deals.
“The planned headcount cuts are sure to grab headlines, but the bigger message is that management is trying to strip out complexity and fund growth areas like Asian wealth and corporate banking without letting costs run away,” noted Matt Britzman, senior equity analyst at Hargreaves Lansdown.
“The investment case still leans heavily on familiar themes: growth in affluent banking across Asia, stronger fee income, and ongoing cost discipline.”
Companies across numerous sectors are cutting jobs as AI plays an increasing role in day-to-day operations.
American tech giant Amazon and German insurer Allianz are among the firms to have cited AI as a reason for job cuts in recent months.
Meta and Microsoft have meanwhile axed thousands of jobs this year, citing the need to control costs while they ramp up investment in the field.
Earlier this month, AI-powered language translation company DeepL said it would cut about a quarter of its workforce as artificial intelligence had made roles redundant.
However, “AI-related cost savings do not directly translate to stock market gains”, Kathleen Brooks, research director at traders XTB, pointed out Tuesday, adding that “roles that are closer to the front office could also be at risk.”
Spain will add some 13.3 billion euros ($15.5 billion) in funding to its newly created sovereign wealth fund to extend the stimulus from expiring European Union funds, the government announced on Tuesday.
The injection and activation of the fund, approved by the cabinet at its weekly meeting, involves 10.5 billion euros in loans and 2.8 billion euros from non-repayable grants, all coming from Next Generation EU funds.
The government expects the mechanism, called “Spain Grows,” to mobilize around 120 billion euros in productive investment when coupled with private funding.
It will prioritize sectors with high transformative potential for the economy, such as the construction of affordable rental housing, green transition and technological innovation.
Japan’s economy grew more than expected in the first quarter of the year, led by solid exports and consumption, data showed, although momentum is likely to face a severe test as the full force of the energy shock from the Iran war filters through businesses and consumers.
The data will be one of the key factors the Bank of Japan (BOJ) will scrutinize in determining whether the economy can withstand the energy crisis, and allow it to raise interest rates as soon as next month.
“Today’s data shows the economy was on a solid footing before the Iran war, which means it has some buffers to weather the energy shock,” said Yoshiki Shinke, senior executive economist at Dai-ichi Life Research Institute.
“The economy may contract in the second quarter, but if it’s just about prices rising overall, it can probably resume a recovery thereafter. If there’s huge supply disruptions, the damage to growth could be so severe that the BOJ may not have scope to raise interest rates in June,” he said.
Japan’s real gross domestic product (GDP) increased an annualized 2.1%, data showed on Tuesday, outstripping the median market forecast for a 1.7% gain and a revised 0.8% rise in the previous October-December quarter.
The second straight quarter of expansion in the world’s fourth-biggest economy was underpinned by solid exports with net external demand adding 0.3 percentage point to growth, the data showed.
Private consumption and capital expenditure both grew 0.3% from the previous quarter, suggesting that robust corporate profits and steady wage gains were supporting the recovery.
But analysts expect growth to slow in the coming quarters as the fallout from the Middle East conflict, which has caused an unprecedented disruption to global energy supplies, intensifies.
“We think the Q1 GDP is already in the rear-view mirror and expect the economy to feel the strains from high energy costs ahead. Higher energy prices and elevated uncertainty will limit consumption and investment in the near term,” analysts at Oxford Economics wrote in a research note.
Markets largely shrugged off the GDP data, with attention instead focused on U.S. President Donald Trump’s decision to halt a planned strike on Iran, leaving Asian stocks directionless and bonds on firmer ground.
Safe-haven demand for the dollar pushed the yen down to 159 per dollar, keeping traders on alert for the chance of yen-buying intervention by authorities.
Tokyo is suspected to have spent roughly 10 trillion yen in the latest bout of intervention to shore up the embattled Japanese currency, as its sustained weakness fans inflationary pressure through costlier imports.
‘Difficult year’ ahead
U.S.-Israeli strikes on Iran in late February and Tehran’s effective closure of the Strait of Hormuz, which normally carries a fifth of global oil and gas, have sent prices soaring and raised fears of a major disruption to energy flows.
Japan’s heavy reliance on Middle Eastern oil leaves it acutely exposed. Rising fuel costs are stoking inflation, eroding household purchasing power and tightening corporate margins, a combination that heightens the risk of a severe economic downturn if disruptions persist.
The shift in the outlook is already rippling through policy expectations. The BOJ has dialled up hawkish signals that had prompted markets to price in a strong chance of an interest-rate hike in June.
The government, for its part, will compile an extra budget to cushion the economic blow from soaring fuel costs, a move that would strain Japan’s already worsening finances.
In a statement issued after the GDP data, Economy Minister Minoru Kiuchi urged vigilance over the drag from the Middle East war.
“The outlook for the coming quarters looks incredibly challenging,” with the conflict pushing up commodity prices and inflation keeping real wage growth slow, said Stefan Angrick, head of Japan and Frontier Markets Economics, Moody’s Analytics.
“Modest fiscal support for households, defence and strategic investment should keep the economy from derailing, but the growing list of headwinds points to a difficult year.”
The unemployment rate in the U.K. has unexpectedly risen in the first quarter, as vacancies slumped to their lowest level in five years amid a sharp pullback in hiring across under-pressure retail and hospitality sectors, according to official figures on Tuesday.
The jobless rate rose to 5% in the three months to March, up from 4.9% in the three months to February, said the Office for National Statistics (ONS).
Most economists had expected the rate to remain unchanged.
The ONS estimated the number of workers on U.K. payrolls also slumped by 100,000 during April to 30.2 million, which is the largest fall since May 2020 at the start of the COVID-19 pandemic, although these figures are subject to revision.
It said vacancies dropped by 28,000 quarter-over-quarter to 705,000 in the three months to April, which is the lowest level since the same period in 2021.
Retail and hospitality firms saw some of the largest falls in payroll numbers and vacancies, with the ONS saying firms in the sectors were flagging “economic and geopolitical uncertainty” as reasons to halt hiring.
Regular earnings growth, meanwhile, also fell back further, to 3.4% in the first quarter, down from 3.6% in the three months to February and the lowest level since October 2020, only just outpacing Consumer Prices Index (CPI) inflation by 0.3%.
Liz McKeown, ONS director of economic statistics, said: “Latest figures suggest the labor market remains soft, with vacancies at their lowest level in five years and unemployment higher than a year ago.”
She added: “Lower-paying sectors such as hospitality and retail have seen some of the largest falls in vacancies and payroll numbers, both in recent months and over the last year.”
The figures follow recent warnings over rising unemployment as a result of the inflation shock caused by the Iran war and the impact on consumer spending and the wider economy.
The Bank of England (BoE) last month predicted that even in its most positive forecast, unemployment would hit 5.5% in 2027, with this increasing to 5.6% in a more extreme impact scenario.
Retail and hospitality firms are seen as being particularly exposed, having already been hit with soaring labour costs in recent years.
The ONS said retail vacancies were down 7,000 quarter on quarter in the three months to April while they were 11,000 lower for hospitality.
The number of payroll workers in the sectors were also sharply lower, with retail estimated to be down 76,000 year-on-year in April and hospitality seeing a 75,000 drop.
This is having a major impact on young workers, who traditionally find work in those sectors, with the ONS revealing the rate of unemployment among 16 to 24-year-olds jumped to 16.2% in the three months to March, marking the highest level since 2015.
Work and Pensions Secretary Pat McFadden stressed the latest figures also showed 416,000 more people in work than a year ago.
“While this is encouraging, we know the conflict in the Middle East is casting a shadow on the labor market,” he said.
Consumer confidence in Türkiye increased modestly in May, reaching its highest level in 14 months, according to a survey released Monday.
The consumer confidence index, jointly compiled by the Turkish Statistical Institute (TurkStat) and the Central Bank of the Republic of Türkiye (CBRT), rose 0.3% month-over-month to 85.8 in May.
The reading is up from 85.5 in April and marks the highest level since March 2025.
The index measuring households’ current financial situation fell 3.5% in May to 69.2, down from 71.8 in April.
In contrast, expectations for the next 12 months improved modestly. The household financial situation expectation index rose 0.5% to 87.9 from 87.5 in the previous month.
The greatest improvement among subcomponents was seen in broader economic expectations.
The general economic situation expectation index climbed 3.9% to 81.4, up from 78.3 in April.
Spending intentions for durable goods in the next 12 months remained broadly stable, inching up to 104.5 from 104.4.
The improvement in sentiment comes amid ongoing efforts by policymakers to stabilize inflation and macroeconomic expectations amid pricing pressures amid the fallout of the Iran war.
The conflict, which started in late February after the U.S. and Israel launched joint strikes on Iran, has effectively shut the key Strait of Hormuz, causing what is described as the biggest energy supply crisis ever.
The higher energy prices and transportation prices were among the main drivers behind an increase in Türkiye’s consumer inflation in April, when it reached 32.37%, compared to 30.9% in March.
Last week, CBRT raised its year-end inflation forecast to 26% from 16% and warned of risks linked to the Middle East conflict.
The central bank policymakers said there would be no compromise on their determination to bring down inflation and they will continue to use all available tools for disinflation.
The bank kept its key interest rate at 37% last month, holding steady for the second successive policy meeting due to war-related disruptions.
Despite the May improvement, the consumer confidence index remains below the 100 threshold, signaling that households remain cautious, particularly regarding income stability and purchasing power.
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