Trump: EU not yet offering a fair trade deal
US president Donald Trump has said the European Union was not yet offering a fair deal in trade talks between the United States and the 27-nation bloc.
Seaking to reporters on Air Force One, as he returned early from the G7 summit, Trump explained:
“We’re talking, but I don’t feel that they’re offering a fair deal yet. They’re either going to make a good deal or they’ll just pay whatever we say they have to pay.”
Trump also said there was a chance of a trade deal with Japan, but said Tokyo was being “tough”, Reuters reports.
TRUMP SAYS EU NOT YET OFFERING A FAIR DEAL
— CGTN Europe (@CGTNEurope) June 17, 2025
Trump added that pharmaceutical tariffs were coming very soon and noted that Canada would pay to be part of his “golden dome” project.
Trump has also told reporters on the flight that he wants “a real end” to the nuclear problem with Iran.
White House Press Secretary Karoline Leavitt has posted that the briefing is a sign that Trump is the “most transparent President in history”:
President Trump gaggled with the media aboard Air Force One at 1AM ET. Most transparent President in history.👇 https://t.co/UkUHSXsKCS
— Karoline Leavitt (@PressSec) June 17, 2025
Reminder: The 90-day pause on new tariffs, which Trump announced in April after the markets slumped, ends on 8 July – giving the White House less than a month to strike scores of trade deals.
Europe has been taking a relatively hardball strategy to secure a US trade deal – pitching itself between ‘rollover UK’ (who secured an early deal with the US) and ‘retaliatory China’ (who ended up in a full-blown tit-for-tat tariff war before a peace deal was agreed).
Key events
In another sign that the US economy is slowing, industrial production fell 0.2% in May, the Federal Reserve has reported.
That’s the second decline in three months, and a sign that the burst of activity in the first quarter of 2025 has cooled.
The drop was slightly steeper than the 0.1% drop forecast by economists.
Sarah Butler
Meanwhile in UK retail, Poundland is to shut 68 shops and two distribution centres and aims to close at least 80 more stores, putting more than 2,000 jobs at risk.
The British company, which was sold last week to the US investment group Gordon Brothers for £1, has more than 800 outlets in the UK and the Republic of Ireland employing about 16,000 people. It said it planned to reduce this estate eventually to no more than 650 outlets.
It also wants landlords to cut rents to zero on up to 180 stores – putting the future of those outlets in doubt – while also seeking rent reductions of between 15% and 75% on dozens more stores as part of a restructuring process that it will put to creditors in August.
Poundland is also stopping selling online, ditching its Perks loyalty app, ceasing to sell frozen foods and reducing its range of chilled foods to those elements that make up its £3 meal deals – such as sandwiches – and essentials including milk.
This will lead to the closure of Poundland’s frozen and digital distribution centre at Darton, South Yorkshire, later this year and its national distribution centre at Springvale in Bilston, West Midlands, in early 2026. Two other existing distribution centres in Wigan and Harlow will continue to operate.
More here:
The drop in US retail sales in May could be due to consumers having rushed to buy items earlier in the year, to avoid Donald Trump’s new tariffs on imports.
Here’s Patrick O’Donnell, chief investment strategist at Omnis Investments, explains:
The headline measure of retail sales came in below expectations in May. This was likely driven by the unwind of frontloaded purchases of autos and durable goods ahead of tariffs.
Further weakness is probably in order as more of the tariff-related increase in costs are duly passed onto consumers, weighing on real incomes. However other measures of consumption have been holding up ok. As a result, the FOMC will need to see a steady trend of weaker data before there is any change to their communication, which amounts to a strategy of wait-and-see.
Kathleen Brooks, research director at XTB, says:
The interest rate futures market still see a Sept rate cut from the Fed, so this data may not spur an immediate reaction from the Fed.
After a spate of weaker us econ data recently, if the Fed is not dovish tomorrow we could see a turnaround in bond yields and a boost to the $
— kathleen brooks (@KATHLEENBROOKS) June 17, 2025
US retail sales fall
Newsflash: US retail sales fell last month, and by more than expected, in a sign that consumers may be cutting back.
Retail trade sales were down 0.9% month-on-month in May, new data from the US Census Bureau shows.
Sales at motor vehicle & parts dealers fell by 3.5% in May, the report shows, while takings at building material & garden equipment & supplies dealers were down 2.7%.
🇺🇸 Morning Economic Data:
*Retail Sales: Big Miss 🔴
*Core Retail Sales: Big Miss 🔴
*Export Price Index: Big Miss 🔴
*Import Price Index: Beat 🟢US consumer spending is starting to show signs of slowing down. $SPY pic.twitter.com/KcCIe1oiKB
— Jesse Cohen (@JesseCohenInv) June 17, 2025
*US MAY RETAIL SALES -0.9% M/M vs. -0.6% M/M est.
*US MAY RETAIL SALES (Ex. AUTO) -0.1% M/M vs. +0.3% M/M est.But… the economy is strong, and the hard data is not deteriorating… correct bulls? pic.twitter.com/16FzH8hpFh
— Gordon Johnson (@GordonJohnson19) June 17, 2025
Water industry review won’t recommend changes to ownership model, despite crisis
Helena Horton
The government will not be recommended to turn water companies into not-for-profit companies under its “root and branch review” of the sector, review author Sir Jon Cunliffe has said.
At the launch of the Cunliffe review, the Department for Environment Food and Rural Affairs said that all options – except nationalisation – were on the table, and that a non-profit model such as that used in Wales was being considered.
But Cunliffe has now said the ownership structure is not the problem causing sewage spills, financial mismanagement and water shortages created by a lack of investment, my colleague Helena Horton reports.
He told parliament’s Environment, Food and Rural Affairs committee in Parliament today that the review will not be recommending one ownership structure for the industry.
Cunliffe said:
“If the question is whether we will recommend a wholesale transfer to another [ownership] model, what we won’t do is say we will move the whole sector to a different model. I’m not sure how you get there without spending a very large amount of public money to buy the assets and that’s outside my terms of reference”.
Feargal Sharkey, former Undertones frontman turned water campaigner, said in response:
“I had absolutely no expectations for this commission whatsoever and so far I am yet to be disappointed.
“I fail to comprehend how the interpretation of a root and branch review of the water industry is to completely exclude the issue at the heart of the industry which is ownership of the industry and the financial abuse of the water companies.
“Sir John is refusing to look at this because the government has told him not to.”
When asked by MPs if his report was going to be “tinkering” if it was not recommending an overhaul of how water companies are owned, Cunliffe said: “It’s not tinkering, it’s trying to be evidence based. I don’t think looking at the models, the evidence we have, it’s not a big data set but I don’t think the conclusive evidence is there to make a big change like that.”
He added that the terms of reference set by Defra secretary Steve Reed rule out using public money to nationalise water companies.
Cunliffe said that in the review he will “think about the investors, how they want to take their money out, are they prepared to put more equity in as investment goes up, are they looking for capital gain, are they looking for a stream of dividends over time?” and added he will “look at how do we set rules around that”, adding “it looks maybe weak but I don’t think it is.”
The review will also not make any recommendations on large bonuses and renumeration for water company CEOs:
“I don’t have a problem with there being bonuses for the financial performance provided they are not at the expense of the public good. We are not going to make recommendations on particular renumeration packages for chief executives.
There is a tension here between people taking pay packages they don’t deserve and recruiting and retaining. These are pretty big companies, the penalties for failure are pretty enormous. What we won’t get into is whether this [pay] is excessive.”
The US stock market is set to fall when trading begins in under two hours.
The main three stock indices are all in the red in the futures markets, as Reuters reports:
At 7:04 a.m. ET (12.04pm BST), Dow E-minis were down 221 points, or 0.52%, S&P 500 E-minis were down 30.75 points, or 0.51%, and Nasdaq 100 E-minis were down 120 points, or 0.55%.
Brad Bechtel of investment bank Jefferies explains that the Middle East crisis is dominating investors’ attention:
The overnight news flow remains robust with plenty of headlines on Iran / Israel, the G7 meeting, which Trump exited early, and other events like the BoJ [it left Japan’s interest rates on hold].
The G7 statement contains a call for peace in the Middle East along with a clarifying statement indicating the G7 agrees that Iran should never have a nuclear weapon. Trump exited the G7 meeting rather quickly as he felt compelled to return to Washington as quickly as possible. The situation in Iran is still quite fluid with both sides still lobbing attacks but Israel claiming aerial superiority.
The question on the media’s mind is around whether the US will provide bunker busters to target the nuclear facilities more aggressively, seemingly a red line for Iran with regard to negotiations. So far the view is that this attack by Israel will be a quick ‘operation’ but we heard the same on Gaza and Ukraine. Iran by far the toughest opponent in the Middle East, so we will see.
Reeves pitches UK as ‘oasis of stability’
Heather Stewart
Rachel Reeves has said she hopes global investors will see Britain as an “oasis of stability,” in an unstable world.
Speaking at the FT Global Borrowers and Bond Investors Forum in London, the chancellor said she hoped her “non-negotiable” fiscal rules, had helped create confidence.
Reeves said:
“In a very uncertain world, the sort of age of insecurity we live in today, I hope that people are increasingly looking at Britain and seeing a sort of oasis of stability, where we have stable politics, a stable economy, and also tough, robust fiscal rules which this government is determined to stick to, as well as a government that’s squarely focused on growing the economy.”
Being interviewed by the FT’s Chris Giles, the chancellor also made clear she hopes the independent Office for Budget Responsibility (OBR) will give the government credit for some of its pro-growth policies, when it makes its autumn budget forecasts.
The OBR is widely expected to revise down its GDP forecasts, given that it is currently more optimistic than almost every other forecaster on productivity.
But Reeves pointed to pro-growth factors. Reminding the audience that the OBR increased its GDP forecast by £6.8bn as a result of the government’s planning changes, she said more was to come, including the government’s planning and infrastructure bill, now going through parliament.
“We are hopeful that will have a bigger impact on the ability to get stuff built in Britain,” she said. She also pointed to the government’s recent trade deals with the US and with India, and the controversial welfare reforms announced in the Spring statement. “We’ll work with the OBR over the summer, but I think there are things in both directions,” she said.
Reeves also defended the government’s decision to cut the aid budget to fund defence – but appeared to suggest that decisions about higher defence spending would be for the next parliament.
Lisa O’Carroll
The new Irish pharma export data (see previous post) will add to Trump’s concerns about the trading imbalance with Ireland fuelled by big pharma which last year exported €72bn (£60bn) to the US, with taxes paid in Ireland on drugs consumed in the US.
“The Irish are smart, yes, smart people,” Trump told the taoiseach Micheál Martin in the Oval Office in March, adding:
“You took our pharmaceutical companies and other companies … This beautiful island of 5 million people has got the entire US pharmaceutical industry in its grasps.”
While pharma exports to the US rocketed, today’s Central Statistics Office data shows that overall imports from the US fell 33% in April compared to March and by a similar level, 32%, year on year representing a drop in value of US goods brought into Ireland of €574bn year on year.
Ireland’s pharma exports surged in rush to beat Trump tariffs
Lisa O’Carroll
Ireland’s pharmaceutical industry’s exports to the US rocketed in the first four months of the year as multinationals from Pfizer to Johnson & Johnson rushed to beat Donald Trump’s threatened tariffs.
New data published by the government agency, the Central Statistics Office, this morning showed that exports of medical and pharmaceutical products represented more than 60% of all exports from the country.
They also show that the big push to get medicines across the Atlantic peaked in March, my colleague Lisa O’Carroll in Dublin writes.
CSO statistician Jane Burmanje said the overall increase in exports of pharma for the first four months of the year was more than double the value of exports for the same period of 2024, up from €30.8bn (£26.3) in January-April 2024 to €66.9bn in the first four months of this year.
Exports of pharmaceuticals were down 54% in April compared to March but they were still much higher than in 2024, suggesting continuing efforts to escape import duties which Trump has repeatedly threatened.
Between March and April this year, pharma exports were down €12.8bn (£10.92bn) or by 54% but exports overall were still up €2.1bn (23.6%) to €10.9bn in April 2025 compared to €8.8bn in 2024.
The figures seem to confirm that efforts to beat tariffs were the root cause of a huge spike in Ireland’s economic output data for the first three months of the year.
CSO data earlier this month showed gross domestic product soared by 9.7% as exports to the US ramped up.
Trump has already imposed a 10% tariff on all exports from the EU to the US but the pharma industry is bracing itself for a further stacking of import duties with sectoral taxes threatened on medicines.
As we reported at 10.42am, Trump says those pharmaceutical tariffs are coming “very soon”.
He said:
“We’re going to be doing pharmaceuticals very soon. That’s going to bring all the companies back into America.
It’s going to bring most of them back into, at least partially back in.”
The Iran-Israel conflict has hit risk sentiment yet again today, report Kathleen Brooks, research director at XTB.
It is difficult to sum up the general mood in the markets on Tuesday. European stocks are extending losses as we move through the European morning session, and US equity market futures also point to a lower open. The oil price is also extending gains towards $74.50, as risk aversion takes hold once more. However, the gold price is only moderately higher. Headline risk from the Iran/ Israel conflict is once again impacting financial markets, after taking a reprieve on Monday.
Stocks are lower after Donald Trump’s abrupt departure from the G7 to monitor events in the Middle East from the White House. This suggests that things could be about escalate in this conflict.
The French President initially said that President Trump was leaving due to a ceasefire between Iran and Israel, but that was rebuffed by President Trump. This has spooked financial markets on Tuesday morning.
European fund managers bullish on Europe
Despite trade war uncertainty, global growth pessimism is fading, according to the latest European Fund Manager Survey from Bank of America.
A net 46% of survey participants think that the global economy is set to weaken over the coming year, down from 59% last month and a record 82% in April, on the back of “a fading tariff threat”, BofA reports.
A soft landing for the global economy is once more becoming consensus, with 66% of investors believing this is the most likely outcome, up from 37% in April.
Investors regard a strong US consumer as the biggest upside risk for global growth, while the Trump policy mix is seen as the largest downside risk.
A trade war that triggers a global recession is considered the biggest tail-risk by around half of the respondents and close to two-thirds think only very little of the tariff shock is already in the price, BofA adds.
On the issue of pharmacautical tariffs, Trump told reporters:
“We’re going to be doing pharmaceuticals very soon. That’s going to bring all the companies back into America.
It’s going to bring most of them back into, at least partially back in.”
Trump: EU not yet offering a fair trade deal
US president Donald Trump has said the European Union was not yet offering a fair deal in trade talks between the United States and the 27-nation bloc.
Seaking to reporters on Air Force One, as he returned early from the G7 summit, Trump explained:
“We’re talking, but I don’t feel that they’re offering a fair deal yet. They’re either going to make a good deal or they’ll just pay whatever we say they have to pay.”
Trump also said there was a chance of a trade deal with Japan, but said Tokyo was being “tough”, Reuters reports.
TRUMP SAYS EU NOT YET OFFERING A FAIR DEAL
— CGTN Europe (@CGTNEurope) June 17, 2025
Trump added that pharmaceutical tariffs were coming very soon and noted that Canada would pay to be part of his “golden dome” project.
Trump has also told reporters on the flight that he wants “a real end” to the nuclear problem with Iran.
White House Press Secretary Karoline Leavitt has posted that the briefing is a sign that Trump is the “most transparent President in history”:
President Trump gaggled with the media aboard Air Force One at 1AM ET. Most transparent President in history.👇 https://t.co/UkUHSXsKCS
— Karoline Leavitt (@PressSec) June 17, 2025
Reminder: The 90-day pause on new tariffs, which Trump announced in April after the markets slumped, ends on 8 July – giving the White House less than a month to strike scores of trade deals.
Europe has been taking a relatively hardball strategy to secure a US trade deal – pitching itself between ‘rollover UK’ (who secured an early deal with the US) and ‘retaliatory China’ (who ended up in a full-blown tit-for-tat tariff war before a peace deal was agreed).
German investor morale rose more than expected in June, according to new data from the ZEW economic research institute.
ZEW’s economic sentiment index has jumped to 47.5 points, up from from 25.2 points in May, a larger rise than expected.
The survey was conducted between 6 and 16 July (ie yesterday), so it covered the period when the US and China were striking a trade deal in London, as well as the Israel-Iran crisis, and began just after the European Central Bank cut interest rates on 5 June.
ZEW president Achim Wambach says:
“Confidence is picking up.”
Sabadell gets expressions of interest for UK’s TSB
Julia Kollewe
In the banking world, Spain’s Sabadell has said it has received interest from prospective buyers of its UK division TSB, and said it would assess any firm offers it may receive.
Sabadell wants to sell TSB as it battles to fend off an €11bn (£9.4bn) hostile approach from its Spanish rival BBVA.
The Catalonia-based lender said it had received “preliminary non-binding expressions of interest” for TSB from unnamed bidders, and would examine any potential binding offer.
TSB, which has 175 branches in the UK, has more than 5 million customers and 5,000 staff.
UAE evacuates 24 people from oil tanker after collision near Hormuz Strait
Two tankers have collided in waters off the United Arab Emirates and caught fire in the early hours this morning.
The United Arab Emirates coast guard says it evacuated 24 people from oil tanker ADALYNN following a collision between two ships in the Gulf of Oman, near the Strait of Hormuz.
National Guard Executes Evacuation of 24 People from Oil Tanker Following Collision Between Two Ships in the sea of Oman
The Coast Guard of the National Guard carried out today, Tuesday, June 17, 2025, an evacuation mission involving 24 crew members of the oil tanker ADALYNN,…
— الحرس الوطني (@Uaengc) June 17, 2025
British maritime security firm Ambrey has said the cause of the incident was not security-related.
Daniel Smith, an analyst at Ambrey, said (via Bloomberg):
“At the time of writing, we can only confirm that it is not a security incident. We continue to investigate the cause.”
