German finance minister: EU must be ready to counter U.S. tariff hike
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Diverging Reports Breakdown
BASF cuts 2025 outlook as tariffs weigh on global economy
Germany’s BASF (BASFn.DE) said on Friday that it was lowering its full-year outlook. The company cited weaker-than-expected global economic growth and reduced demand for its chemicals due to U.S. tariffs. The Ludwigshafen-based chemical giant had already warned that it. was facing high levels of uncertainty from U.s. tariffs and the potential backlash from other countries.
FRANKFURT, July 11 (Reuters) – Germany’s BASF (BASFn.DE) , opens new tab said on Friday that it was lowering its full-year outlook, citing weaker-than-expected global economic growth and reduced demand for its chemicals due to U.S. tariffs.
The Ludwigshafen-based chemical giant had already warned that it was facing high levels of uncertainty from U.S. tariffs and the potential backlash from other countries, cautioning that the threat of trade duties was prompting customers to order more cautiously overall.
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In an unscheduled release of preliminary results on Friday, BASF said that earnings before interest, taxes, depreciation and amortisation (EBITDA), before special items, would likely be between 7.3 billion euros ($8.54 billion) and 7.7 billion euros in 2025.
That is a reduction from its previous outlook of between 8.0 billion euros and 8.4 billion euros.
“Global gross domestic product is projected to grow less in 2025 than previously assumed. This development is essentially attributable to the U.S. tariffs,” it said.
“In 2025, market demand for chemical products will likely grow less than previously expected,” the company added.
The company also announced that second-quarter operating profit declined 9.7%, in line with market expectations.
EBITDA before special items dropped to 1.77 billion euros, right in line with consensus , opens new tab posted on the company’s website, but lower than the 1.96 billion euros generated a year earlier.
($1 = 0.8553 euros)
(This story has been refiled to fix punctuation in paragraph 1)
Reporting by Ludwig Burger and Tom Sims, Editing by Louise Heavens
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TSX gives up weekly gain as the US plays ‘hardball’ on tariffs
The S&P/TSX composite index (.GSPTSE) ended down 59.05 points, or 0.22%, at 27,023.25. For the week, the index was barely changed, posting a decline of 0.05%. U.S. President Donald Trump ramped up his tariff assault on Canada on Thursday. The Canadian economy added 83,100 jobs in June and the unemployment rate surprisingly dipped to a level of 6.9% from 7% in May. Money markets see a 13% chance the BoC cuts its benchmark interest rate at the next policy decision on July 30.
July 11 (Reuters) – Canada’s main stock index pulled back on Friday from a record high as investors weighed the prospect of increased U.S. tariffs on Canadian goods and after domestic jobs data clipped expectations the Bank of Canada would resume its easing campaign.
The S&P/TSX composite index (.GSPTSE) , opens new tab ended down 59.05 points, or 0.22%, at 27,023.25, after notching a record closing high on Thursday. For the week, the index was barely changed, posting a decline of 0.05%.
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U.S. President Donald Trump ramped up his tariff assault on Canada on Thursday, saying the U.S. would impose a 35% tariff on imports next month, up from the current 25% rate. An exclusion for goods covered by the United States-Mexico-Canada Agreement on trade was expected to stay in place.
“Clearly, the U.S. is pushing for more concessions,” said Ian Chong, a portfolio manager at First Avenue Investment Counsel. “They’re playing a little bit of hardball here, so not good for Canada and the TSX.”
The Canadian economy added 83,100 jobs in June and the unemployment rate surprisingly dipped to a level of 6.9% from 7% in May. Money markets see a 13% chance the BoC cuts its benchmark interest rate at the next policy decision on July 30, down from 27% before the jobs data.
The technology sector fell 1.6%, with shares of software company Open Text Corp (OTEX.TO) , opens new tab down 4.0%.
Consumer staples lost 0.9% and heavily weighted financials ended 0.6% lower.
Four of the 10 major sectors ended higher. Energy added 1.2% as the price of oil settled up 2.8% at $68.45 a barrel.
The price of gold also rose, climbing 1%. The materials group, which includes metal mining shares, gained 0.9%.
Aritzia Inc (ATZ.TO) , opens new tab reported first-quarter results that beat expectations. Shares of the fashion retailer ended 1.5% higher.
Reporting by Fergal Smith, Twesha Dikshit and Sukriti Gupta; Editing by Shreya Biswas and Leroy Leo
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EU says it still wants US trade deal, will defend interests
EU ready to take ‘proportionate countermeasures’ if needed, says EU Commission President Ursula von der Leyen. EU ambassadors will discuss next steps on Sunday, before trade ministers meet in Brussels on Monday for an extraordinary meeting. EU has so far held back from retaliating against the U.S., although it has readied two packages that could hit a combined 93 billion euros of goods. Trump has periodically railed against the European Union, saying in February it was “formed to screw the United States” The American Chamber of Commerce to the EU said in March the trade dispute could jeopardise $9.5 trillion of business in the world’s most important commercial relationship. The EU has repeatedly pointed to a U.s. surplus in services, arguing it in part redresses the balance of trade between the two countries, which is worth $235 billion a year. The European Commission needs more than ever to “assert the Union’s determination to defend European interests resolutely”, says French President Emmanuel Macron.
Summary EU position attracts swift backing from European capitals
Bloc ready to take ‘proportionate countermeasures’ if needed
Macron says Commission must defend bloc’s interests ‘resolutely’
Trump’s biggest grievance is merchandise trade deficit
July 12 (Reuters) – The European Union said on Saturday it was ready to retaliate to defend its interests if the United States pressed ahead with imposing a 30% tariff on European goods from August 1.
U.S. President Donald Trump latest salvo surprised the bloc, the United States’ largest trading partner, which had hoped to avoid an escalating trade war after intense negotiations and increasingly warm words from the White House.
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Ursula von der Leyen, head of the EU executive which handles trade policy for the 27 member states, said the bloc was ready to keep working towards an agreement before August 1, but was willing to stand firm.
“We will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required,” she said of possible retaliatory tariffs on U.S. goods entering Europe.
EU ambassadors will discuss next steps on Sunday, before trade ministers meet in Brussels on Monday for an extraordinary meeting. They will need to decide whether to impose tariffs on 21 billion euros of U.S. imports in retaliation against separate U.S. tariffs against steel and aluminium, or extend a suspension which lasts until the end of Monday.
The EU has so far held back from retaliating against the U.S., although it has readied two packages that could hit a combined 93 billion euros of U.S. goods
European capitals swiftly backed von der Leyen’s position.
German Economy Minister Katherina Reiche called for a “pragmatic outcome to the negotiations”.
Trump’s proposed tariffs “would hit European exporting companies hard. At the same time, they would also have a strong impact on the economy and consumers on the other side of the Atlantic,” she said.
French President Emmanuel Macron said on X that the European Commission needed more than ever to “assert the Union’s determination to defend European interests resolutely”.
Retaliation might need to include so-called anti-coercion instruments if Trump did not back down, Macron said.
The tool, drawn up during Trump’s first term and used against China, allows the EU to go beyond traditional tariffs on goods and impose restrictions on trade in services, if it deems that a country is using tariffs to force a change in policy.
Spain’s Economy Ministry backed further negotiations but added that Spain and others in the EU were ready to take “proportionate countermeasures if necessary”.
Trump has periodically railed against the European Union, saying in February it was “formed to screw the United States”.
His biggest grievance is the U.S. merchandise trade deficit with the EU, which in 2024 amounted to $235 billion, according to U.S. Census Bureau data. The EU has repeatedly pointed to a U.S. surplus in services, arguing it in part redresses the balance.
RETALIATION
Combining goods, services and investment, the EU and the United States are each other’s largest trading partners by far. The American Chamber of Commerce to the EU said in March the trade dispute could jeopardise $9.5 trillion of business in the world’s most important commercial relationship.
Bernd Lange, head of the European Parliament’s trade committee said he was now convinced the first stage of countermeasures should come into force on Monday, followed quickly by the second package.
Trump has said he would mirror any retaliatory moves.
Still, Trump has repeatedly announced sweeping tariffs in recent months, only to row back or suspend them before his own self-imposed deadlines. The expectation that he will again relent has led to increasingly muted responses on financial markets, which have recovered since plunging after his initial “Liberation Day” announcement of big global tariffs in April.
Three EU officials who spoke on condition on anonymity said they saw Trump’s latest threats as a negotiating ploy.
Carsten Brzeski, global head of macro at ING, said Trump’s move suggested that months of negotiations remained deadlocked and that the situation was inching towards a make-or-break moment for the transatlantic trade relationship.
“The EU will now have to decide whether to budge or to play hardball,” he said. “This will bring market volatility and even more uncertainty.”
Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, noted that the brunt of the U.S. tariffs, if implemented, would be felt by U.S. consumers.
However, there would also be clear repercussions for the euro area economy, already struggling with weak growth.
The European Central Bank had used a 10% tariff on EU exports to the United States as the baseline in its latest economic projections, which put output growth in the euro area at 0.9% this year, 1.1% in 2026 and 1.3% in 2027.
It said a 20% U.S. tariff would curb growth by 1 percentage point over the same period and also pull down inflation to 1.8% in 2027, from 2.0% in the baseline scenario. It did not even offer an estimate for the possibility of a 30% tariff.
Reporting by Ana Cantero Rios in Madrid, Maria Martinez and Christian Kraemer in Berlin, John Revill in Zurich, Francesco Canepa in Frankfurt, Charlotte Van Campenhout in Brussels Writing by Mark John Editing by William Maclean and Peter Graff
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Germany finance minister: EU must be ready to counter US tariff hike
President Donald Trump on Saturday threatened to impose a 30% tariff on imports from Mexico and the EU starting on August 1. The threat has prompted a robust response from German politicians and business leaders. European Commission President Ursula von der Leyen on Sunday said the bloc favoured a negotiated solution to the row, and would extend the suspension of its countermeasures to U.S. tariffs until early August. Germany sold goods worth 161 billion euros ($188 billion) to the United States in 2024, running a trade surplus of nearly 70 billion euros, according to German government data. The United States is Germany’s largest export market, selling vehicles and automotive components, machinery and pharmaceuticals. The EU said it still preferred a negotiated settlement to the escalating global trade conflict.
President Donald Trump on Saturday threatened to impose a 30% tariff on imports from Mexico and the EU starting on August 1, after weeks of negotiations with the major U.S. trading partners failed to reach a comprehensive trade deal.
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The threat has prompted a robust response from German politicians and business leaders, while the EU said it still preferred a negotiated settlement.
“If a fair negotiated solution does not succeed, then we must take decisive countermeasures to protect jobs and companies in Europe,” Klingbeil, who is also vice chancellor in Germany’s ruling coalition, told German newspaper Sueddeutsche Zeitung.
“Our hand remains outstretched, but we will not go along with everything,” he added.
European Commission President Ursula von der Leyen on Sunday said the bloc favoured a negotiated solution to the row, and would extend the suspension of its countermeasures to U.S. tariffs until early August.
“The (anti-coercion) instrument is created for extraordinary situations, we are not there yet,” von der Leyen said, a reference to a tool that allows the EU to go beyond traditional tariffs on goods and also impose restrictions on trade in services.
Higher U.S. tariffs pose a particular challenge for Germany, as the United States is its largest export market, selling vehicles and automotive components, machinery and pharmaceuticals.
In 2024 it sold goods worth 161 billion euros ($188 billion) to the United States, running a trade surplus of nearly 70 billion euros, according to German government data.
PROVOCATIONS
German Finance Minister and Vice Chancellor Lars Klingbeil sits in the German lower house of parliament Bundestag during the 2025 to 2029 budget session in Berlin, Germany, July 9, 2025. REUTERS/Christian Mang/File Photo Purchase Licensing Rights , opens new tab
Klingbeil said Trump’s tariffs policy would only result in losers, and called for de-escalation in the row, which he said threatened the American economy at least as much as European companies.
“Nobody needs new threats or provocations now,” Klingbeil said.
“Instead, we need the EU to continue serious and targeted negotiations with the USA. Europe remains united and determined: We want a fair deal.”
Trump’s tariff threat follows a 20% duty he imposed on EU goods in April, a move that was later suspended for 90 days and replaced with a baseline tariff of 10%.
Last week he pushed back the deadline for negotiations to August 1.
Bernd Lange, head of the European Parliament’s trade committee, on Saturday sharply criticised Trump’s tactics and called for EU countermeasures to be implemented immediately.
But earlier on Sunday , Juergen Hardt, deputy leader of Chancellor Friedrich Merz’s conservative CDU/CSU parliamentary group in the Bundestag, said he was hopeful of further negotiations, with the higher US tariffs postponed.
“I’m betting that at least a partial agreement and a further postponement will be reached before August 1,” Hardt told Reuters.
“After all, high tariffs have to be paid by American citizens and companies and lead to higher prices and inflation in the U.S.,” he said.
($1 = 0.8555 euros)
Reporting by John Revill and Andreas Rinke Editing by Gareth Jones and Clelia Oziel
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German upper house of parliament approves $54 billion corporate tax relief package
German upper house approves 46 billion euros tax relief package. Package aims to boost economy, facing potential third year of contraction. Includes depreciation options, corporate tax cuts and incentives for electric cars. It is the first in a series of expected measures from Germany’s new government to boost the economy, which could be facing a third consecutiveyear of contraction for the first time in its post-war history. The package also includes a promised one percentage point cut to the corporate tax rate each year over five years from 2028, bringing it down to 10% by 2032. The measures will cut government tax revenue.
Summary German upper house approves 46 billion euros tax relief package
Package aims to boost economy, facing potential third year of contraction
Includes depreciation options, corporate tax cuts and incentives for electric cars
BERLIN, July 11 (Reuters) – The German upper house of parliament approved on Friday a first tax relief package worth 46 billion euros ($54 billion) from 2025 to 2029 to support companies and revive the country’s sluggish economy.
The package, which had already been approved by the lower house, includes measures such as favourable depreciation options of as much as 30% per year for three years to ease companies’ tax burden. To encourage electric car purchases, buyers will be able to depreciate 75% of the purchase price in the year in which the vehicle is bought.
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It is the first in a series of expected measures from Germany’s new government to boost the economy, which could be facing a third consecutive year of contraction for the first time in its post-war history.
“With this, we are creating strong investment incentives, securing jobs and putting Germany back on a growth path,” German Finance Minister Lars Klingbeil said on Friday.
“We are making Germany as a business location more internationally competitive.”
The package also includes a promised one percentage point cut to the corporate tax rate each year over five years from 2028, bringing it down to 10% by 2032.
Economic output will be 29 billion euros higher by 2029 than without the measures passed today, according to the calculation of the Cologne Institute for Economic Research IW, with real gross domestic product increasing by an average of 0.15% per year.
Investments are expected to be 16 billion euros higher by 2029, IW said in its report, adding that up to 39,000 new jobs could be created.
The measures will cut government tax revenue and the federal government had to make concessions to the states to secure their approval in the upper house of parliament.
“If we generate new growth, state revenues will also increase again,” Klingbeil said. “Until then, we are relieving the burden on municipalities and enabling the federal states to invest an additional 8 billion euros in good daycare centres, education and modern hospitals.” ($1 = 0.8561 euros)
Reporting by Maria Martinez, additional reporting by Christian Kraemer and Rene Wagner, editing by Miranda Murray and Alex Richardson
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