Volkswagen embodies the challenge ahead for European industry
The risks of decline go far beyond any single company
Economic News
Rise of stablecoins could undermine euro area monetary policy, ECB warns
Rapid adoption of dollar-linked tokens would leave central bank struggling to control money supply and interest rates
What have the US and EU agreed on trade?
Most exports from bloc to face 15% tariffs while European market will open to more American imports
European stocks rise to 4-month high after US and EU strike tariff deal
Agreement removes threat of full-blown trade war between Washington and Brussels
European stocks hit 4-month high after US and EU strike trade deal
Agreement reduces uncertainty over tariffs that has stalked markets
What the world got wrong about tariffs
No economy rises or falls for just one reason, even a shock as big as Trump’s trade policy
Trump freezes export controls to secure trade deal with China
US officials have been warned to avoid tough moves against Beijing as Stockholm hosts third round of negotiations
Wegovy ™ for Me, but Not for Thee (cont’d)
The just-announced trade “deal” (what’s the enforcement mechanism?) apparently covers pharmaceuticals. Where do we get most of our pharma (by value)? From Joey Politano, the answer: Source: Politano. I don’t think there’s anything on paper (and even if there were, would it mean much?). So, not the 50% I pondered back in May, but still 15% is above 10%. * To be clear, we do not know if Mr. Trump is taking a GLP-1. ** Back of the envelope calculation of tax increase. Effective tariff rate rises from 1.2% to 15%; 2024 imports from EU equals approx 600 bn. Assuming no price response (price elasticity is 0), and US as small country, this is a tax increase of $83bn/year, or $70 bn/year assuming a price elasticity of demand of unity.
FirstFT: The US and EU reach a trade deal
Also in today’s newsletter, Taiwanese voters reject attempt to recall KMT lawmakers, and China proposes global body to govern AI