2025-07-08 09:01

FRANKFURT, July 8 (Reuters) - The European Union is increasingly trading with autocratic regimes, funding their often expansionary strategy and potentially aiding an existential challenge to the bloc itself, a European Central Bank blog post said on Tuesday. The EU has long prided itself on running a values-based economic policy, with trade relations taking into consideration factors such as social justice, human rights, labour rules, and environmental standards. Sign up here. But reality is quite different and trade with autocratic regimes has steadily risen from 1999 until the bloc imposed widespread sanctions on Russia after its invasion of Ukraine, the blog post authored by ECB economists Claudia Marchini and Alexander Popov argued. "Our findings show that, despite its pledges, the EU is indeed increasingly trading with countries run by autocrats and dictators," the blog, which does not reflect the ECB’s views, said. "We see an interruption to this trend only recently." The shift comes as the EU has reallocated imports in favour of less democratic countries and because the quality of democratic governance has declined among existing trading partners. "'Trading with dictators' amounts to generating profits for regimes that often have an explicit expansionary and militaristic agenda," the blog said. "Ultimately, this can potentially become an existential challenge to the EU." The article, however, dismisses the argument that increased trade with China is the culprit, claiming that a similar trend can be observed even if China is excluded. It also disputes that democracy was itself on the decline, arguing that the median country outside the bloc has actually become more democratic. On top of the reputational and existential threats, the trend is also concerning since many of the key resources needed for the bloc’s green transition are found in countries run by autocrats, the blog added. "Our findings suggest a trade-off associated with the green transition," the blog said. "Current low-carbon technologies rely on a range of rare earth materials that are typically found in countries with autocratic regimes." https://www.reuters.com/sustainability/society-equity/trading-with-dictators-eu-may-be-funding-threats-itself-ecb-says-2025-07-08/

2025-07-08 07:40

SYDNEY, July 8 (Reuters) - Australian Prime Minister Anthony Albanese said on Tuesday that he would visit China from this weekend as Beijing looks to build on partnerships on AI, green energy and the digital economy. "I look forward to going to Shanghai, Beijing and Chengdu, which I will visit from Saturday," Albanese told reporters in Hobart. He did not give more details about his trip. Sign up here. The Chinese foreign ministry confirmed that Albanese will be visiting the country from July 12 to 18. "China is willing to work with Australia to take this visit as an opportunity to strengthen communication, enhance mutual trust and expand practical cooperation," ministry spokesperson Mao Ning told a regular press conference. This would be Albanese's second visit to China as prime minister, after his re-election in May. Albanese's first visit to Beijing as prime minister in 2023 broke a seven-year freeze in diplomatic ties, and he emphasised the need for communication with China, despite differences between the two trading partners. Albanese's trip comes as China, its largest trading partner, suggested a review of the 10-year-old free trade agreement between the two countries to boost ties in agriculture and mining, and explore growth areas in new technologies. "We are willing to review the agreement with a more open attitude and higher standard," Xiao Qian, the Chinese ambassador to Australia, wrote in The Australian Financial Review on Monday. When asked if Australia would look to expand the free trade deal with China to include AI, Albanese said: "We will determine our policy". https://www.reuters.com/world/china/australias-albanese-confirms-china-visit-beijing-eyes-trade-deal-review-2025-07-08/

2025-07-08 07:39

Japan's top trade negotiator says held phone talk with Lutnick Japan, US trying to agree on package of measures, Akazawa says Japan won't sacrifice agriculture for early deal Yen slumps on receding expectations of near-term BOJ rate hike July 20 election may complicate trade negotiation outcome TOKYO, July 8 (Reuters) - Japan's trade deal with the U.S. must include tariff concessions for its vital automobile industry, top trade negotiator Ryosei Akazawa said on Tuesday, after President Donald Trump announced 25% tariffs on goods from Japan starting August 1. Akazawa said he held a 40-minute phone talk with U.S. Commerce Secretary Howard Lutnick, where the two sides agreed to "actively" continue negotiations. Sign up here. "We are trying to agree on a package of measures" ranging from expanded trade, non-tariff barriers and cooperation on key economic security issues, Akazawa said at a news conference. "The two countries must garner trust through sincere dialogue, and reach common ground step by step. Through such a process, my job as negotiator is to agree on a full package as soon as possible." Trump on Monday began notifying trade partners of steep U.S. tariff hikes, but later indicated a willingness to delay implementation if countries made acceptable proposals. He also signed an executive order to put off the tariffs until August 1. Akazawa said Japan had no deadline in mind, including August 1, in reaching a deal with the U.S., and would not sacrifice Japan's agriculture sector for the sake of an early agreement. He also stressed that protecting the automobile sector, a mainstay of Japan's export-reliant economy that is being slapped with 25% tariffs, was among his top priorities. "There's no point striking a deal with the U.S. without an agreement on automobile tariffs," Akazawa said. Uncertainty on tariffs sent the dollar to a two-week high of 146.44 yen on fading expectations of a hawkish quarterly report from the Bank of Japan on July 31, which would have laid the groundwork for an interest rate hike this year. "If the new deadline is set on August 1, the BOJ probably won't be able to say much at the upcoming report in July," said Takeshi Ishida, a strategist at Kansai Mirai Bank. "Market expectations of a near-term rate hike will be rolled back." In a press conference on Tuesday, Finance Minister Katsunobu Kato said he had no plans for now to hold talks on exchange rate matters with U.S. Treasury Secretary Scott Bessent. ECONOMIC IMPACT Japan failed to clinch a deal with the U.S. before the July 9 expiration of Trump's temporary pause on his "reciprocal" tariffs, after it focused on eliminating automobile levies. With an upper house election on July 20, Prime Minister Shigeru Ishiba has said Japan will not make "easy concessions" for the sake of an early deal with Washington. Recent media polls have shown Ishiba's ruling coalition may fail to maintain a majority in the upper house, which could complicate trade negotiations, analysts say. U.S. tariffs also add to woes for Japan's economy, which shrank in the first quarter. "There's now a chance Japan could slide into recession," said Yoshiki Shinke, an economist at Dai-ichi Life Research Institute, who expects 25% tariffs to knock 0.7% point off Japan's annual economic growth. https://www.reuters.com/business/japan-will-continue-trade-talks-with-us-pm-ishiba-says-2025-07-08/

2025-07-08 07:17

HANOI, July 8 (Reuters) - Vietnam will soon sign an agreement with Indonesia to boost long-term rice shipments, the Vietnamese government said on Tuesday in a statement, after exports plunged in the first half of the year. The statement came hours after Vietnamese Prime Minister Pham Minh Chinh met Indonesian President Prabowo Subianto on the sidelines of the BRICS summit in Brazil. Sign up here. Indonesia has been among Vietnam's key markets for rice, but deliveries in the first half of this year plummeted 97% to 19,000 metric tons. Vietnam is the world's third largest rice exporter after India and Thailand, but Indonesia slashed its purchases partly because of high domestic inventories. The Vietnamese government said the rice trade agreement would contribute to long-term and sustainable rice exports for Vietnam and would "ensure food security for Indonesia." At the meeting, Chinh also said he would instruct Vietnam's trade ministry to work with Indonesian authorities to further open each other's markets. https://www.reuters.com/markets/asia/vietnam-indonesia-agree-sign-rice-trade-deal-shipments-plunge-2025-07-08/

2025-07-08 07:13

Ryanair sees strong bookings, rising prices for summer Recent heatwave has no influence on travel Aims to treble traffic from Warsaw's Modlin airport by 2030 WARSAW, July 8 (Reuters) - Ryanair (RYA.I) , opens new tab said demand for travel this summer was showing no signs of cooling, with strong bookings and rising ticket prices, even as a severe heatwave recently engulfed Europe, Chief Executive Michael O'Leary said on Tuesday. O'Leary reaffirmed the Irish low-budget airline's May forecast, noting it expects to recover most, but not all, of the 7% decline in average fares recorded last year as consumers grappled with high interest rates. Sign up here. "Bookings into summer 2025 are strong, prices are rising," he said, adding that demand for destinations such as Italy, Greece, Spain, the Balearics, the Canaries and Morocco remains robust. The CEO also said market consensus anticipates Ryanair's after-tax profit for the first quarter ending in June to double, stating, "We see no reason to alter or object to that consensus, but we can't comment on that". The company is scheduled to release its first-quarter results on July 21. Addressing concerns over extreme weather, O'Leary described heatwaves as a "temporary phenomenon" that does not seem to be affecting travel patterns this summer. O'Leary, whose airline sources almost all of its aircraft from Boeing (BA.N) , opens new tab, said he was hopeful that commercial aircraft will be exempt from U.S. and EU tariffs, but admitted that "nobody is really sure". Speaking in Warsaw, O'Leary announced plans to treble the number of passengers Ryanair serves at the city's Modlin airport to more than 5 million a year by 2030. The company plans to invest $400 million in Modlin and double the number of aircraft based there to eight from four, while still flying from the city's main airport, Okecie. Air traffic in Modlin had been falling in the last three years due to a dispute with Ryanair over fares, but O'Leary said it would now be "the fastest growing airport in Poland". As part of the deal, Modlin Airport has undertaken to build at least four new passenger check-in desks and four new parking stands by September 2027. https://www.reuters.com/business/aerospace-defense/ryanair-has-strong-bookings-summer-says-ceo-2025-07-08/

2025-07-08 06:37

Trump unveils 25% tariffs on Japan, South Korea Higher tariff rates to take effect from August 1 Fed to release minutes from latest meeting on Wednesday July 8 (Reuters) - Gold prices were little changed on Tuesday, caught between safe-haven demand following U.S. President Donald Trump's new tariff proposals for trading partners, including Japan and South Korea, and rising Treasury yields that capped any upside momentum. Spot gold eased 0.1% to $3,331.85 per ounce, as of 0612 GMT. U.S. gold futures was steady at $3,341.80. Sign up here. On Monday, Trump began telling trade partners that sharply higher U.S. tariffs would start on August 1, marking a new phase in the trade war he launched earlier this year, with tariffs on goods from Japan and South Korea set at 25%. The August 1 deadline for implementing the tariffs was firm, Trump said, adding that he would consider extensions if countries made proposals. "Reciprocal tariffs" were capped at 10% until July 9 to allow for negotiations, but only agreements with Britain and Vietnam have been reached so far. "Traders seem relatively unfazed by Trump's tariff letters, and with safe-haven demand largely contained at this point, gold is still just biding its time, waiting for a topside breakout to potentially occur," KCM Trade Chief Market Analyst Tim Waterer said. The higher bond yields and resilience in Asian markets to tariff developments are curbing gold's immediate upside potential, Waterer added. The yield on benchmark U.S. 10-year notes hovered near a two-week high. Higher yields increase the opportunity cost of holding non-yielding bullion. Meanwhile, China warned the Trump administration against reigniting trade tensions by restoring tariffs on its goods next month, and threatened to retaliate against nations that strike deals with the U.S. to cut China out of supply chains. Trump's tariffs have stoked inflation fears, further complicating the Federal Reserve's path to lower interest rates. The minutes of the Fed's June meeting, due on Wednesday, should offer more clues into the central bank's policy outlook. Spot silver held steady at $36.75 per ounce, platinum fell 0.1% to $1,368.93 and palladium rose 0.2% to $1,112.88. https://www.reuters.com/world/india/gold-holds-ground-investors-assess-us-tariff-hike-2025-07-08/