Hong Kong (AFP) – Equities struggled Monday as countries fought to hammer out trade deals days before Donald Trump’s tariff deadline, with the US president saying he would begin sending letters to some capitals outlining the rates he had decided upon. While the White House has said several deals were in the pipeline, only two have been finalised ahead of the July 9 cut-off set by the US president.
Governments from major trading partners including Japan, India, the European Union, and South Korea have fought for the past three months to get agreements. But Trump said he will send his first tariff letters at 1600 GMT Monday, setting out what Washington will charge for doing business with the United States. He said an extra 10 percent would be added to any country “aligning themselves with the Anti-American policies of BRICS,” an 11-member alliance including Brazil, Russia, India, and China.
“I am pleased to announce that the UNITED STATES TARIFF Letters, and/or Deals, with various Countries from around the World, will be delivered starting 12:00 P.M. (Eastern), Monday, July 7th,” Trump said on his Truth Social network. The announcement on BRICS came after leaders of the group warned Trump’s “indiscriminate” import tariffs risked hurting the global economy.
The deadline for a deal is Wednesday, but Treasury Secretary Scott Bessent confirmed on Sunday that the measures would not be applied until August 1. “It’s not a new deadline. We are saying, this is when it’s happening. If you want to speed things up, have at it. If you want to go back to the old rate, that’s your choice,” Bessent told CNN. He said the rates will then “boomerang back” to the sometimes very high levels Trump announced on April 2, before the president suspended the levies to allow for trade talks. “I would expect to see several big announcements over the next couple of days,” Bessent said.
The president told reporters Sunday on Air Force One that “I think we’ll have most countries done by July 9, either a letter or a deal,” adding that some deals have already been made. Tariff uncertainty weighed on equity markets, with Tokyo, Hong Kong, Sydney, Wellington, Taipei, Mumbai, Bangkok, and Jakarta all down, though there were small gains in Singapore, Seoul, and Manila. Shanghai was flat. London fell at the open, while Frankfurt and Paris edged up.
“Whether deadlines get extended remains uncertain given Trump’s unpredictable style,” said IG market analyst Fabien Yip. “Our base case expects several important trade partners to agree on a high-level basis before the deadline. This would provide more time for detailed discussions over the following two months. The other risk factor is sector-specific tariffs covering semiconductors, pharmaceuticals, and materials may also be announced in due course.”
Oil prices slipped after Saudi Arabia, Russia, and other major producers in the OPEC+ alliance said they would boost output far more than expected in August, fueling demand worries just as Trump’s tariffs are about to begin. The group said “a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories” led to the decision to further hike output.
– Key figures at around 0715 GMT –
Tokyo – Nikkei 225: DOWN 0.6 percent at 39,587.68 (close)
Hong Kong – Hang Seng Index: DOWN 0.3 percent at 23,842.55
Shanghai – Composite: FLAT at 3,473.13 (close)
London – FTSE 100: DOWN 0.1 percent at 8,811.83
West Texas Intermediate: DOWN 0.9 percent at $66.39 per barrel
Brent North Sea Crude: DOWN 0.2 percent at $68.16 per barrel
Euro/dollar: DOWN at $1.1755 from $1.1783 on Friday
Pound/dollar: DOWN at $1.3609 from $1.3641
Dollar/yen: UP at 145.07 yen from 144.53 yen
Euro/pound: UP at 86.42 pence from 86.37 pence
New York: Closed for a public holiday
© 2024 AFP
