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Trump's tariffs are already changing global trade

The Trump administration is imposing tariffs on allies and adversaries alike—15% on the EU, 50% on Brazil, 25% on India. America has become the main driver of global economic uncertainty and increasingly seen as an unreliable trade partner. So what can countries do? They adapt. If they can’t trade through Washington, they’ll try trading around it.

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U.S. President Donald Trump shakes hands with European Commission President Ursula von der Leyen, after an announcement of a trade deal between the U.S. and EU, in Turnberry, Scotland, Britain, July 27, 2025.

REUTERS/Evelyn Hockstein

US and EU strike trade deal

It’s down the wire for countries trying to reach a trade deal with the US before Aug. 1, when President Donald Trump has threatened steep “reciprocal” tariffs. But on Sunday, the United States and the European Union reached a sweeping – and preliminary – agreement that sets new rules for the world’s largest bilateral trade relationship, avoiding a transatlantic trade war that many feared could rattle the global economy.

Trump announced the deal on Sunday after meeting with European Commission President Ursula von der Leyen at his Turnberry golf resort in Scotland, just days before 30% tariffs were set to take effect. “It’s the biggest of all the deals,” Trump said. Von der Leyen called the pact, which affects the world’s largest bilateral trade relationship, a win for “stability” and “predictability.”

Who agreed to what? The US will impose a 15% tariff on most imports from the EU — including automobiles, a major trading category. The rates had hovered in single digits before Trump took office. The 15% rate also applies to pharmaceuticals and semiconductors, which had not previously been subject to tariffs. European steel and aluminum will still be subject to a 50% tariff rate.

In return, the EU has agreed to purchase $750 billion in US energy exports, invest $600 billion in the American economy, and not place tariffs on the US. Brussels had prepared to retaliate with levies on up to $116.2 billion in American products if talks had collapsed.

Not everyone is happy. The euro fell against the dollar on Monday morning, reflecting, in part, concerns that the deal could hurt Europe’s export sector. French Prime Minister Francois Bayrou said that the bloc “resigned itself into submission” to the US, complaints echoed by far-right leaders in France and Germany. Critics also pointed out that the UK got a better deal from Trump, going home with just a 10% tariff.

But it is good news for transatlantic ties. The deal follows months of tense back-and-forth, and according to Eurasia Group’s Europe expert Mujtaba Rahman, “should contribute to a broader stabilization of the transatlantic relationship, certainly compared to where things sat earlier in the year.” In May, Trump threatened to impose 50% tariffs on nearly all EU goods, later reducing that to 30%.

“The EU and US have now struck deals on NATO and trade; the only real issue that remains outstanding is the question of Ukraine,” says Rahman.

What’s next: The final 15% figure mirrors a pact the US recently reached with Japan — and may now become Washington’s new baseline for deals with other trading partners like South Korea, Taiwan, and Switzerland, where the White House will now shift their focus before the Friday deadline.

The Royal Embassy of Cambodia in Bangkok, Thailand on July 24, 2025. The two countries’ long-simmering border dispute turned violent on Thursday.

Teera Noisakran/Sipa USA

What We’re Watching: Clashes on Thailand-Cambodia border, Trump’s new AI plan, China-EU tensions

Thailand and Cambodia on the brink

A long-simmering border dispute between Thailand and Cambodia erupted into armed clashes Thursday that have killed at least 12 people on the Thai side of the frontier. Thailand has launched cross-border airstrikes in response to what it said was Cambodian artillery fire. The dispute dates back more than a century, but things have worsened since May, when a Cambodian soldier was killed in a border skirmish. The issue has also roiled Thai politics: Prime Minister Paetongtarn Shinawatra was ousted earlier this month after a leaked phone call revealed her buttering up influential Cambodian politician Hun Sen and disparaging her own country’s military.

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Syrian residents in Madrid have gathered in Puerta del Sol to celebrate the fall and end of the government of President Bashar al-Assad in the Arab country on December 14, 2024.

David Canales / SOPA Images via Reuters Connect

Hard Numbers: Spain top destination for asylum seekers, Pakistan’s deadly monsoons, babies born with three DNA’s, & more

12,800: Spain replaced Germany in May as the top destination in the European Union for asylum seekers, receiving 12,800 applications that month. Germany had 9,900 asylum applicants, down from 18,700 in the same period last year, as Berlin tries to stem the influx of Syrian nationals – who represent the largest of asylum seekers – following the fall of Bashar al-Assad.

69: At least 69 people have died in a fire at a shopping mall in the city of al-Kut in eastern Iraq. The origin of the fire is not yet known, but initial analysis of the site suggests that it started on the floor where cosmetics and perfumes are sold.

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Lizzy Yee

Graphic Truth: Trump increases tariff threats on top trade partners

US President Donald Trump is threatening to impose 30% tariffs against the United States’ top two trading partners, the European Union and Mexico, demanding that Europe open its markets more to US products and that Mexico combats local drug cartels. Without new trade deals, the levies would come into effect on Aug. 1, and are higher than the previous duties that Trump had threatened. The announcement has put both Mexico and the European trading bloc on their heels: they have each now scrapped earlier plans to retaliate, favoring negotiations to smooth things over in the next two weeks. However, as Trump continues to drive an extremely hard bargain with even the US’s closest trading partners, he increases the risk that they will look elsewhere for alliances – for some, this process has already begun.

- YouTube

Europe’s AI Act: World’s first guardrails or just a flashy head start?

“We wanted to be first with a flashy AI law,” says Kai Zenner, digital policy advisor in the European Parliament.

Speaking with GZERO's Tony Maciulis at the 2025 AI for Good Summit in Geneva, Zenner explains the ambitions and the complications behind Europe’s landmark AI Act. Designed to create horizontal rules for all AI systems, the legislation aims to set global standards for safety, transparency, and oversight. But some of Europe’s largest companies are pushing back, saying the rollout is too fast and too rigid. Zenner acknowledges the growing pains, but insists the law was designed to evolve over time.

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- YouTube

Is Serbia pivoting towards Ukraine?

In this episode of Europe in :60, Carl Bildt breaks down Serbia’s evolving foreign policy, and political developments in Poland.

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- YouTube

EU pressures Israel over Gaza, Romania surprises, Poland vote ahead

In this episode of Europe In 60 Seconds, former prime minister of Sweden Carl Bildt checks in from Dayton, Ohio, with sharp insights on two key developments: The EU’s decision to review its association agreement with Israel amid mounting criticism of Israeli actions in Gaza and the West Bank, and a surprise turn in Romania’s presidential race where a centrist victory defied populist expectations.

Plus, all eyes turn to Poland for a critical second-round election on June 1. What’s at stake for Europe’s political future?

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