EU Commission Preparing 'Well-Calibrated' Retaliation to US Tariffs

Economic

Summary:

As the US rolls out new tariffs, the European Commission is preparing its response.

The day after the announcement of new US tariffs on car imports, the European Commission stated on Thursday that it is awaiting the US's reciprocal tariffs, set to take effect next week, before deciding on any countermeasures.

“If necessary, we will deliver firm, proportionate robust, and well calibrated and timely response to unfair and counterproductive measures from the US,” Commission spokesperson Olof Gill said, adding that he cannot tell the “exact timing” of EU actions until US tariffs come into force. US tariffs on cars are due to be implemented on 2 April.

US tariffs on steel and aluminium have already been implemented. In addition to the 25% tariffs on cars unveiled on Wednesday, reciprocal tariffs are set to target the EU on 2 April. However, it remains unclear whether these tariffs will affect European countries individually or the EU as a bloc.

The European Commission is set to consult member states on a list of American products that have been subject to suspended tariffs since 2018, following a trade dispute between the EU and the first Trump administration over steel and aluminium tariffs. In addition, a second list of US goods is under consideration, as Brussels weighs its next steps in the row. These measures will form part of a broader package of retaliatory tariffs, expected to take effect by mid-April.

But an EU official told Euronews that Brussels will not settle for these two lists alone, warning that once Washington announces its reciprocal tariffs next week, the bloc may need to respond with further measures. “We haven't announced anything on services or on the anti-coercion tool,” the official said.

So far, the announced countermeasures on steel and aluminium have only targeted American goods. However, in 2023, the US recorded a services trade surplus of €109 billion with the EU. Expanding retaliatory measures to services would mark a significant escalation in the ongoing trade tensions between Brussels and Washington.

The anti-coercion instrument, adopted by the EU in 2023 but never used, is seen too by some experts as a "nuclear option" in trade policy. It would enable Brussels to impose measures on intellectual property rights or, for example, restrict licensing against a third country, adding a powerful tool to the bloc’s arsenal in global trade disputes.

The announcement of tariffs on car imports into the US has sparked strong reactions across the EU.

“It is now important that the EU gives a decisive response to the tariffs - it must be clear that we will not back down to the USA. Strength and self-confidence are required,” German Minister for economic affairs Robert Habeck said in a statement, adding: “At the same time, we will support the European Commission in continuing to find a solution with the USA through negotiations that avert a tariff spiral.”

EU Trade Commissioner Maroš Šefčovič met on Tuesday in Washington with US Commerce Secretary Howard Lutnick, Trade Representative Jamieson Greer, and top White House economic adviser Kevin Hassett. However, according to the European Commission, the talks yielded disappointing results.

“It’s true that Commissioner Šefčovič’s mission to Washington DC just now didn’t deliver any negotiated outcome" Gill said on Thursday, despite Commission's hopes for progress.

“This is very bad news, and it is an act that is obviously uncooperative, in a situation where it is cooperation that will allow us to resolve the problem,” French economy minister Eric Lombard commented on Thursday on French public radio France Inter about US tariffs on cars. He added: "We are in a situation where we are under attack: either we let it happen, in which case this situation will never end; or we retaliate, unfortunately, that is the rule of the game that has been imposed by the Americans.”

Source: Euronews

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Liam Peterson

Cryptocurrency

On March 27, Bitcoin exchange-traded funds (ETFs) experienced substantial interest from investors, resulting in $89 million in net inflows. Approximately 1,020 BTC were purchased, reflecting confidence in Bitcoin’s long-term potential.

Institutional investors are increasingly turning to BTC ETFs as a regulated and accessible way to gain exposure to the leading cryptocurrency. This surge in inflows highlights Bitcoin’s continued dominance in the crypto investment landscape.

Ethereum ETFs See Notable Outflows

In contrast, Ethereum ETFs faced net outflows of $4.2 million, with around 2,090 ETH sold on the same day. This divergence suggests a more cautious stance among Ethereum investors, potentially driven by regulatory uncertainties or concerns over market volatility.

Despite Ethereum’s strong fundamentals, including its role in the decentralized finance (DeFi) and NFT ecosystems, short-term market sentiment remains lukewarm. The contrast between BTC and ETH ETF flows further underlines Bitcoin’s status as the preferred choice for institutional portfolios.

What This Means for the Market

The recent ETF activity provides insights into broader market sentiment. Bitcoin’s resilience in attracting inflows indicates a growing belief in its value as a long-term store of value. Meanwhile, Ethereum’s outflows may reflect temporary uncertainty, but its innovation and growing use cases suggest potential recovery in the future.

Investors should closely monitor ETF flow trends as they often act as a leading indicator of institutional sentiment in the cryptocurrency market.

Source: CryptoSlate

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Economic

This is the moniker U.S. President Donald Trump has bestowed on his April 02 tariff announcement that will see the rollout of a barrage of new punitive trade measures.

Citi FX strategists view "Liberation Day" as the catalyst for EUR weakness.

However, the Euro is not reflecting any nerves as of yet: the Pound-to-Euro exchange rate is comfortably in the middle of its multi-month range and the Euro-to-Dollar exchange rate is nearly 4% higher than where it started the year.

In fact over the course of the past month, EUR is the third-best performing G10 name.

"EUR resilience in the face of worrying developments on the trade front is either impressive or optimistic," says Daragh Maher, Senior FX Strategist at HSBC. "It feels unsustainable.' Pound-to-Euro: EUR Running on the Fumes of Optimism_1

Pound-to-Euro: EUR Running on the Fumes of Optimism_1

Only the Scandies have outperformed EUR over the past month.

According to HSBC, the market's optimistic stance on the EUR reflects a selective reading of tariff headlines, with a choice to focus on Trump's suggestion upcoming tariffs will be "lenient".

This means traders are choosing to ignore a 25% tariff on EU auto exports and ignore headlines that double-digit tariffs are to be layered on top.

Trump also made a threat on Wednesday that tariffs on the EU could be much larger than planned if it cooperates with Canada to hurt the U.S. Again, the EUR looks to be ignoring this.

"If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!" Trump posted on Truth Social.

The scale of the threat and current levels in spot exchange rates could suggest EUR is running on the fumes of optimism.

"We continue to see tariff risks as underpriced, particularly in FX and equities," says a note from Citi's currency desk.

"The inertia in the FX market might simply reflect confusion about what this all might mean," says Maher.

According to reports, European trade chief Maroš Šefčovič's was told of the tariffs by U.S. Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer. Photographer: Claudio Centonze. Copyright: European Union.

Indeed, FX trading veteran Brent Donnelly at Spectra Markets says that at this juncture, "tariffs are untradable."

Others agree. JP Morgan's London trading desk says in a daily briefing that "the market has learnt its lesson, shooting first and asking questions later was a painful experience post-inauguration and therefore a sense of calm is perhaps the best reaction here until we understand the end game."

"In the relative world of FX, the logic might be that all ships are sinking, so there might be no currency implication," points out Maher.

The Pound retains support against the Euro on strong hints the UK will be relatively unaffected by next week's "Liberation Day" tariffs.

CNBC said the U.S. President may not take all of the non-tariff barriers into account when setting tariff rates. He specifically mentioned VAT taxes, which will be welcomed by the UK.

"That could be notable for the UK given the lack of a goods sector imbalance," says Jeremy Stretch, an analyst at CIBC Capital Markets.

CNBC's Eamon Javers said, "A White House official tells me the president is signalling he may not take all of the non-tariff barriers into account when he calculates tariffs on given countries. Those non-tariff barriers, they say, include VAT taxes."

Previously it was mooted that countries that charge VAT could be in line for tariffs, which brought the UK into focus. But dropping the VAT threat means the UK will unlikely feature on Trump's radar.

Source: Poundsterlinglive

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Kevin Morgan

Economic

Forex

Britain’s economy grew by 0.1% in the fourth quarter of 2024, in line with economists’ expectations from a Reuters poll, the Office for National Statistics (ONS) confirmed on Friday.

The services sector posted a 0.1% increase in output during the quarter, while construction grew by 0.3%. In contrast, production output fell by 0.4%.

Real annual GDP growth for 2024 has now been revised up to 1.1% from an initial estimate of 0.9%, following a 0.4% increase in 2023, the ONS said.

Real households’ disposable income (RHDI) per head rose by 1.7% in the fourth quarter, accelerating from 0.6% growth in the previous quarter.

The latest data adds to the stagnation concerns as households continue to accumulate cash at record levels.

The household savings ratio climbed from 10.3% to 12% in the final quarter of 2024, marking the highest level outside of the pandemic since 2010, following the financial crisis. Non-pension savings also reached their highest point on record, excluding the COVID period.

Grant Fitzner, chief economist at the ONS, said that the economy “continues to show little growth since last summer.”

GDP per head, a critical measure of living standards, fell by 0.1% between October and December, signaling a technical recession after two consecutive quarters of decline. Growth per head was flat across 2024.

The data comes after the Office for Budget Responsibility (OBR) on Wednesday trimmed its 2025 GDP growth forecast in half, from 2% to 1%. Chancellor Rachel Reeves said last week that “the world has changed,” attributing the weak outlook to global uncertainty and rising borrowing costs.

She reiterated on Wednesday that “the global economy has become more uncertain, bringing insecurity at home.”

Adding to the economic uncertainty, the UK and Europe face further challenges as U.S. President Donald Trump plans to introduce sweeping “reciprocal” tariffs on April 2, which he has dubbed “Liberation Day” for America.

Trump announced 25% tariffs on car imports to the U.S. on Wednesday, dealing a significant blow to British and European exporters.

In a separate report on Friday, the ONS revealed that British retail sales rose by 1% in February, exceeding expectations.

Data from the ONS showed that the volume of goods purchased outperformed economists’ forecasts of a 0.4% decline, according to a Reuters poll. However, the February increase was smaller than the 1.4% gain recorded in January.

In the three months to February, retail sales were up 0.3% compared to the previous three-month period.

The pound briefly strengthened after the positive data against the dollar, rising to $1.2952 by 08:03 GMT.

Source: Investing

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Economic

The 25% U.S. tariff announced for auto imports is raising a ruckus across the globe, from Tokyo and Seoul to Wolfsburg to Detroit, as car makers warn of price hikes and ponder shifting their manufacturing base to deal with the upheaval.

The shares of Japanese and South Korean automakers - pillars of the two powerhouse Asian economies - sank on Friday in a brutal end to the week.

Almost 3 trillion yen ($20 billion) has been wiped from the market value of Japan's top three carmakers - Toyota, Honda and Nissan- in three trading sessions this week.

Futures suggest European markets are looking at a dour Friday with the region's automakers stuck in the spotlight. The European automobiles and parts index was at its lowest level since early December and is poised for a sixth straight week in the red.

U.S. President Donald Trump's latest tariff salvo has drawn fierce criticism from politicians and industry executives across the globe. Wolfsburg, Germany-based Volkswagen said the entire automotive industry as well as customers will have to "bear the negative consequences".

It's decision time for car makers, who must now determine whether to localise more production in the U.S., swallow the costs of tariffs, or pass those costs on to consumers.

Volvo Cars, Volkswagen's Audi, Mercedes-Benz and Hyundai have already said they will relocate portions of their production.

Ferrari, which makes all of its cars in Italy, said it would raise prices of some models by as much as 10%.

It seems that all big automakers are facing an uncertain future. Well, almost all. Shares of Texas-based EV maker Tesla largely shrugged off the worries, as its production for the U.S. market largely comes from domestic plants, with less reliance than other automakers on foreign-made parts.

President Donald Trump's mercurial tariff policies have created uncertainty on Wall Street and continue to fuel fears of a global slowdown.

Investor attention is now turning to the reciprocal U.S. tariffs to be announced next week, with markets latching onto Trump's suggestion that the levies might be lenient. That leaves a lot of room for a surprise - either pleasant or nasty.

Amidst all this gloom, the rally in gold prices is showing no signs of letting up, cracking through yet another record high on safe-haven flows. Gold has stayed comfortably above $3,000 per ounce since breaching that threshold in mid-March.

The yellow metal has risen more than 17% in the January-March period, on course for its best quarterly performance since 1986.

Morning Bid: Tariff Carnage Rumbles On_1

A line chart titled "Spot gold price in USD per oz" that tracks the metric over time.

Key developments that could influence markets on Friday:

Economic events: UK GDP data for Q4, UK retail sales for February, France inflation data for March, Germany labour data for March, euro zone sentiment survey data for March.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

James Riley

Technical Analysis

FundamentalOverview

The USD performance hasbeen mixed this week amid general uncertainty ahead of the April 2 tariffs planannouncement. The greenback got a bit of a boost recently as Trump announced25% tariffs on auto imports on Wednesday but those gains eventually waned.Overall, the market is still pricing between two to three rate cuts this yearand the sentiment remains tentative ahead of the Trump’s “Liberation Day”.

On the JPY side, we got higherthan expected Tokyo CPI figures today which gave the Yen a boost as traderscontinue to focus on the inflation data to decide whether the BoJ could hikemore than twice by the end of the year. Overall, the market is still pricingaround 34 bps of tightening by year-end with particular focus now on theunveiling of the US tariffs plan next Wednesday.

USDJPYTechnical Analysis – Daily Timeframe

USDJPY Daily

On the daily chart, we cansee that after breaking above the major trendline, the pair continued to drift higher.There’s not much else we can glean from this timeframe so we need to zoom in tosee some more details.

USDJPY TechnicalAnalysis – 4 hour Timeframe

USDJPY 4 hour

On the 4 hour chart, we cansee that we have an upward trendline defining the bullish momentum on thistimeframe. From a risk management perspective, the buyers will have a betterrisk to reward setup around the trendline to position for further upside. Thesellers, on the other hand, will look for a break below the trendline to regaincontrol and pile in for a drop into the 140.00 handle next.

USDJPY TechnicalAnalysis – 1 hour Timeframe

USDJPY 1 hour

On the 1 hour chart, we cansee that we have a minor upward trendline. On an intraday basis, we can expectthe buyers to lean on the trendline with a defined risk below it to positionfor a rally into new highs, while the sellers will look for a break lower to pilein for a drop into the major trendline next. The red lines define the average daily range for today.

Source: ForexLive

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Stocks

London stocks were set to fall at the open on Friday following negative sessions in the US and Asia, as investors continued to mull the impact of Trump’s auto tariffs.

The FTSE 100 was called to open around 20 points lower.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "Sentiment remains sour due to intensifying tariff talk.

"The carmakers around the world got hammered this week as the ones that produce their cars outside the US will cost 25% more if the levies go live - and nearly half of vehicles sold in the US are reportedly assembled elsewhere - and, the ones that are made in the US have at least 20% of their components coming from outside the US."

On home shores, figures from the Office for National Statistics showed that retail sales rose more than expected in February.

Sales were up 1% on the month following a 1.4% increase in January, and versus expectations for a 0.4% decline.

January's growth was revised down from 1.7%.

The ONS said non-food store sales volumes grew strongly in February, with rises across all four sub-sectors - department, other non-food, clothing, and household goods stores - while supermarket sales volumes fell back following a strong rise in January.

In corporate news, WH Smith said it has sold its UK High Street business to Modella Capital for an enterprise value of £76m on a cash and debt-free basis.

The retailer, which will now focus on its travel outlets, said it expected net cash proceeds of around £25m when adjusted for transaction and separation costs, which would be spent in-line with the its capital allocation policy.

It added that the deal did not include the funkypigeon.com personalised online greeting card business where strategic options were now being considered, including a possible sale.

Energy group SSE said it has promoted its chief commercial officer Martin Pibworth to the CEO position, replacing current boss Alistair Phillips-Davies who will formally leave the company this summer.

Pibworth, who first joined SSE in 1998 and stepped up to the executive committee in 2012 and the board in 2017, “has been at the heart of the design and delivery of SSE’s highly successful corporate strategy”, SSE said.

Source: Poundsterlinglive

Risk Warnings and Disclaimers

Add to Favorites

Daily News

Remarks of Officials

Central Bank

Forex

FastBull Events

FastBull Featured

Devin

Mohammad Omar

Recent Searches

Top Searches

Markets

News

Analysis

User

24/7

Economic Calendar

Education

Data

EU Commission Preparing 'Well-Calibrated' Retaliation to US Tariffs

Source: Euronews

BTC ETFs See $89M Inflows While ETH ETFs Face $4.2M Outflows

Ethereum ETFs See Notable Outflows

What This Means for the Market

Source: CryptoSlate

Pound-to-Euro: EUR Running on the Fumes of Optimism

Source: Poundsterlinglive

UK Economy Grew 0.1% in Final Quarter of 2024, Fueling Stagnation Concerns

Source: Investing

Morning Bid: Tariff Carnage Rumbles On

A line chart titled "Spot gold price in USD per oz" that tracks the metric over time.

Source: Reuters﻿

USDJPY Technical Analysis – The JPY Gets A Boost From Higher Tokyo CPI Data

FundamentalOverview

USDJPYTechnical Analysis – Daily Timeframe

USDJPY Daily

USDJPY TechnicalAnalysis – 4 hour Timeframe

USDJPY 4 hour

USDJPY TechnicalAnalysis – 1 hour Timeframe

USDJPY 1 hour

Source: ForexLive

London Pre-Open: Stocks Seen Lower; Retail Sales in Focus

Source: Poundsterlinglive

Risk Disclosure

Source: Reuters