Good morning. Donald Trump dials up trade tensions. China imposes curbs on EU medical devices in a retaliatory move. And Tesla shares may come under pressure on Elon Musk’s political plans. Listen to the day’s top stories.
Donald Trump said any country aligning with the “anti-American” policies of the BRICS nations will face an additional 10% levy. The group of countries that includes Brazil, Russia, India, China and South Africa met over the weekend and condemned US and Israeli attacks on Iran. Trump also said tariff letters will be delivered from noon Washington time today. US Treasury Secretary Scott Bessent indicated some countries may be given an extension to finalize agreements.
Markets: European and US equity futures dropped along with Asian shares over fresh tariff uncertainty, while the Indian rupee, the rand and the yen fell. Oil prices slid after OPEC+ agreed to a bigger-than-expected production increase next month, raising concerns about oversupply.
Europe must shore up its tariff barriers to counter Chinese imports that risk harming the continent’s industrial economy, France’s finance minister said. Meanwhile, China will impose some reciprocal curbs on medical-device procurement for EU-based companies, adding to tensions just as Beijing seeks to shore up ties with the bloc.
Trump criticized Elon Musk’s bid to start a new political party, saying third parties have never worked in the US. Wedbush Securities expects Tesla shares to come under pressure as investors fret over the impact of Musk’s move. Read our explainer about the troubles Tesla is facing now. And in case you missed it, here’s a detailed look at Musk’s plans to form a new “America Party.”
Chancellor of the Exchequer Rachel Reeves and Prime Minister Keir Starmer. Photographer: Jack Hill/WPA/Getty Images
A year on from the Labour Party’s landslide UK election win, initial business optimism has been replaced by discontent over tax increases, persistent red tape and a lack of dialogue with the government.
“I’m struggling to see what’s business-friendly so far,” said Bernard Fairman, executive chairman of Foresight Group, an infrastructure investment firm.
The government is faced with a balancing act—appeasing companies as well as the unions; appealing to its traditional left-wing base while trying to win over Conservative supporters and voters who may be veering toward the populist Reform UK party.
Keir Starmer’s initial failure to give his full-throated backing to Rachel Reeves caused a sharp selloff in gilts, and the tumult signals worse to come, Marcus Ashworth writes. The gilt market is ambivalent to who the chancellor is but bond vigilantes are getting restless.
Bakeries and restaurants from Paris to Hong Kong are grappling with a surge in butter prices and a shortage in supply. Bloomberg's Celia Bergin explains how a hot summer, cheese and cows in the EU and New Zealand are all playing a role in boosting costs.
