Still reeling from its decision to accept a controversial trade deal with President Donald Trump that imposed 15% US tariffs on most European exports, the European Union received another gut punch, this time from China.
Beijing approved preliminary duties ranging from 15.6% to 62.4% on EU pork imports. China accuses the bloc of dumping practices and of causing “material injury” to its domestic industry, an allegation that a European Commission spokesperson called “questionable.”
While the EU has vowed to defend its producers, it’s easy to see the economic risks of potential tit-for-tat measures. Last year, the EU imposed tariffs on Chinese electric vehicles to protect its own car industry.
The political backdrop won’t help to keep a cool head. Tensions between Beijing and Brussels flared earlier this week after the bloc’s foreign policy chief, Kaja Kallas, criticized the optics surrounding a military parade in Beijing, to which North Korea’s Kim Jong Un and Russia’s Vladimir Putin had been invited. Chinese Foreign Ministry spokesman Guo Jiakun slammed the remarks as “preposterous and irresponsible.”
The timing couldn’t be worse. The EU is going in overdrive to secure market access to compensate for narrowing opportunities in the US. It’s currently trying to ratify a proposed free-trade deal with Mercosur countries by the end of the year.
One of the biggest roadblocks to that is the fierce opposition from French farmers looking to shield their businesses from cheaper imports. It’s catching the French government during another crisis, with the cabinet likely to fall next week in a no-confidence vote called over disputed budget cuts. — Zoltan Simon
What You Need to Know Today
UK Prime Minister Keir Starmer reshuffled his cabinet in an attempt at a political reset following the abrupt resignation of Deputy Premier Angela Rayner over a tax scandal. Yvette Cooper was tapped to leave the Home Office and become foreign secretary in one of the most high-profile swaps, according to an official. Meanwhile Nigel Farage, whose Reform UK leads polls, said he’s preparing his party for power in a general election he predicted could come as soon as 2027
Keir Starmer, left, and Angela Rayner. Photographer: Hollie Adams/Bloomberg
Whether the French government collapses or not, the legacy of rising government debt is here to stay. Borrowings as a share of gross domestic product are on a path to rise by 10 percentage points to 125% in 2030 if politicians can’t agree on measures to bring them under control, according to Bloomberg Economics projections.
Germany plans to purchase three Heron drones for nearly €1 billion ($1.2 billion) from Israel despite growing calls from European allies to increase the pressure on Prime Minister Benjamin Netanyahu to stop his military offensive in Gaza. The deal is part of more than 80 military procurement orders for which the German government will seek parliamentary approval by the end of the year.
A German Heron TP drone. Photographer: Axel Heimken/dpa
Former Credit Suisse AG Chief Executive Officer Tidjane Thiam vowed to press ahead with his presidential ambitions in Ivory Coast, even after being barred from next month’s elections in the West African nation. Thiam, 63, filed his candidacy last month. A court ruled in April that he can’t run because when he registered as a voter in February, he had French nationality, making him ineligible.
Denmark should consider joining the euro if the country wants a bigger role in the European Union, according to their central bank chief, central bank Governor Christian Kettel said in a Bloomberg interview. Denmark is “already a euro country” in a macroeconomic sense because of its foreign-exchange peg, but adopting the single currency would allow it to “take stronger part in the decision making,” he said.
OPEC+ leader Saudi Arabia wants the group to consider reviving more oil production ahead of its scheduled return at the end of next year and amid a push to reclaim market share, we’re told. Key members will hold a video conference on Sunday on the matter, though it’s unclear whether they’ll agree on it then. Any proposal to increase production could run into opposition from other members keen to prop up prices.
London’s commuters face significant travel disruption as workers on the UK capital’s underground network start a seven-day strike. Walkouts will begin Friday at 6 p.m. at Ruislip, west London, where depot operational control managers go on strike. The worst of the disruption is due from Monday when all fleet workers across the network walk out. The Elizabeth Line and the Overground will operate as normal.
