Tariffs, glimmer of hope for Europe in negotiations with the US

The EU is now at risk of tariffs of 50 per cent according to Trump's threats - starting on 9 July, if there is no agreement or extension of the deadline - who has suspended the US global crusade armed with so-called reciprocal tariffs to give diplomacy time. The EU has indicated it hopes for flexibility in the timetable and Treasury Secretary Scott Bessent, considered the White House's most pragmatic economic ambassador, has suggested that extensions are 'very likely' for partners engaged in serious talks.

But the US double message, negotiations under the Damocles sword of tariffs wielded like sanctions, has kept alarm high among investors and companies worried about shocks to international supply chains. Bessent himself, testifying before the Senate, has defended the trade strategy to the hilt by downplaying the risks to the US economy: he has boasted "no inflation and no recession" to date and accused the Democratic opposition of being afflicted by tariffs mental illness.

Many analysts and the Federal Reserve - not just critics - fear that such reassurances are premature, with repercussions still to come. The nations in the crosshairs of Trump's new epistolary ultimatum, already speculated last month, are up to 150. And the newly renewed truce with a major strategic rival as well as economic partner, China, has become a symbol of the knots to be unravelled. Trump celebrated it again yesterday: 'I am very pleased'. In reality, the provisional armistice, which maintains a halt to drastic bilateral trade barriers until August, appears as fragile as the handshake between delegations that sanctioned it in London: details are still vague and Beijing has guarded against new escalations by only granting six-month licences for the export of rare earths and magnets needed by the US.

This is not enough. Beijing is demanding, according to the Financial Times, more in-depth information on foreign businesses seeking supplies of critical minerals, raising questions about security and trade secrets. The Asian power dominates the extraction and production of rare earths, a fact it has tried to turn into one of its strengths in the uncertain negotiations with Washington.