| Evening Briefing Europe |
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| US President Donald Trump threatened a sweeping 50% tariff on the European Union starting June 1. Trump also made a threat to place a 25% levy on Apple if the tech giant failed to move iPhone manufacturing to the US. The comments, made in social media posts, have reignited investor fears about his trade agenda. Trump accused the EU of being "very difficult to deal with" and US Treasury Secretary Scott Bessent said on Fox News that he hopes the message would "light a fire under the EU." This latest posturing comes after the EU earlier this week shared a revived trade proposal with the US in a bid to jump-start talks. Equities dropped across the globe, with the S&P 500 and the Stoxx Europe 600 Index each sinking about 1%. Apple led a selloff in tech, falling 2%. The dollar slid toward its lowest since 2023 and Treasury yields plunged across the curve. Trump's latest tariff threat would hit $321 billion worth of US-EU goods trade, lowering US gross domestic product by close to 0.6% and boosting prices by more than 0.3%, according to Bloomberg Economics calculations. — Jennifer Duggan | |
What You Need to Know Today | |
| Faster US inflation triggered by tariffs wouldn't necessarily spill over into the euro zone, according to European Central Bank Chief Economist Philip Lane. "With floating exchange rates, there's nothing mechanical linking inflation here with the US," Lane said Friday in Florence, Italy. "It's important to remember inflation is under our control. So the global inflation concept is not totally well founded." Tighter US monetary policy could actually curb price growth in Europe by acting as a drag on the world economy, the Irish official said. | |
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| Visa and Mastercard fees are under fresh scrutiny from European Union antitrust enforcers. Less than a decade ago a series of probes ended with hefty fines and an agreement to cut some of their controversial levies. While at an early stage, it's possible the EU's competition watchdog could move toward opening of a formal probe, ramping up the risk of heavy fines of as much as 10% of annual revenue if firms are found to have abused their market dominance. | |
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| Attacks on power infrastructure have become a feature of Russia's attempts to conquer Ukraine. Since the start of the full-scale invasion in February 2022, 63,000 pieces of energy infrastructure have been damaged, according to the Energy Ministry. But as the war has dragged on, the disruptions have been shorter. The grid has been reengineered to be less reliant on massive Soviet-era thermal power stations, and more distributed and diverse in its sources. Under fire, Ukraine has built a system that is more resilient — and greener — than what it had before. | |
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| Harvard University sued the Trump administration over its move to block it from enrolling international students, ratcheting up a high-stakes legal fight with broad implications for higher education in the US. The Trump administration issued its decision on Thursday, delivering a major blow to the university and escalating the government's fight with elite colleges to an unprecedented level. The government's action has thrust thousands of foreign students into limbo. | |
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| The EU has decided to delay the application of tougher capital requirements for banks' trading businesses as the bloc is concerned about the industry's competitiveness. The regulation known as Fundamental Review of the Trading Book will be pushed back by one year to the start of 2027, a European Commission spokesperson said. It's the second such delay. The EU decision comes amid rising pushback from businesses and national governments across the bloc against what they see as excessive red tape, especially in financial services. | |
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| Farms across wide swaths of Europe are parched after an unusually dry spring, evidence of the increasing threat of climate change to homegrown grains. The sunny stretch follows a winter marked by long periods of low rain and snowfall in key crop-producing regions. Total precipitation in Europe from February through April was below long-term averages, according to data from the University of Maine's Climate Change Institute. | |
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| Iran and the US have started their next round of talks on the Islamic Republic's nuclear program, it was reported. The delegations are headed by Iranian Foreign Minister Abbas Araghchi and US Middle East Special Envoy Steve Witkoff, ISNA added. The talks are taking place in Rome and are being mediated by Oman. Earlier Iran said it's "time to decide," with the main sticking point being whether Tehran will be able to continue enriching uranium. | |
What You'll Need to Know Tomorrow | |
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| Europeans are planning 10% fewer trips to the US as the busy summer season approaches, in the latest sign that some international travelers are avoiding America as backlash grows against President Donald Trump's policies. | |
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