2025-03-25 06:23

Trump's threats have jolted Europe into action Defence, construction firms getting a tailwind But structural drags remain in energy, red tape FRANKFURT, March 25 (Reuters) - U.S. President Donald Trump's erratic policymaking has given Europe an unexpected spur to action, but any sense of "Europhoria" about the region's chances of turning this moment into a longer-lasting revival is likely premature. Trump's threats on tariffs and questioning of America's future security role in Europe have drawn an energetic response, perhaps best symbolised by Germany's plans to spend hundreds of billions of euros on defence and infrastructure. Sign up here. Some European companies are becoming more optimistic about sales, while growth projections for the euro zone economy have been upgraded. The euro has risen and investors are ditching U.S. stocks for their long-neglected European counterparts. Yet while some analyst notes now include the phrase "Make Europe Great Again" - a play on Trump's MAGA slogan - the surge in optimism ignores Europe's unresolved problems: high energy costs, a fragmented internal market, and looming tariffs from its biggest customer, the United States. "Is the Europhoria justified?," asked Holger Schmieding, an economist at German bank Berenberg. "The more positive outlook for Europe makes sense. But as usual, the sudden swing may be a little overdone in some cases." Euro zone shares have risen 12% since Trump's inauguration on January 20, while U.S. stocks have fallen by 6.7%. U.S. consumers and investors , opens new tab have also turned much more pessimistic than their European counterparts. Economists polled by Reuters have upgraded their 2026 growth forecasts for the euro zone for the first time in nearly a year, to 1.3% from 1.2%. While that is still less than the 2% predicted for the United States, there was further positive news on Monday as closely watched factory gate data showed euro zone business growth expanding at its fastest pace in seven months. Some European officials have pointed out that the region's widely deprecated fondness for rules looks like a virtue compared with unpredictable policymaking elsewhere. Angelique Renkhoff-Muecke of Bavaria's metal and electrical industry association, was even blunter about the growing doubts over legal certainty for business in the U.S. "Anyone who is not already there is thinking about whether they should go," she said. TRADE RISK A potential trade war with the United States, starting with tariffs due to take effect on April 2, is the biggest risk for an export-oriented economy like Europe's. The European Central Bank estimates a 25% U.S. tariff on imports from Europe would dent euro zone output by about 0.3 percentage points in the first year. Retaliatory measures by Europe could increase the damage to about half a percentage point. Any sustained investment gains in Europe are unlikely until the fog surrounding Trump's plans clears. Indexes that measure trade , opens new tab and broader economic policy , opens new tab uncertainty using sources such as newspaper articles, disagreements among forecasters and filings have shot to all-time highs. "Businesses are not in a good position to plan for their investments," said Atanas Kolev, co-author of one paper on the economic drag created by uncertainty. To be sure, Europe's new-found spending courage can help the region insulate itself from trade headwinds - especially those sectors that benefit directly from Germany's spending plans, such as defence and construction. Rheinmetall (RHMG.DE) , opens new tab, Europe's top ammunition maker, expects significant sales growth in 2025, and missile maker MBDA will invest in its Italian unit to boost production in expectation of more orders. Infrastructure companies from Germany's Heidelberg Materials (HEIG.DE) , opens new tab and Austria's Strabag (STRV.VI) , opens new tab to Swiss Geberit (GEBN.S) , opens new tab and France's SPIE (SPIE.PA) , opens new tab expect the German spending programme to have a short-term impact. Peter Huebner, president of Germany's construction industry association HDB and a board member of Strabag's German division, expected both orders and sales at his unit to rise this year. "Every euro invested in infrastructure increases gross domestic product by two and a half times (that amount)," he said. HDB told Reuters it reckons sales will likely rise in 2025 for the first time in five years. In January, it saw sales declining by 1.4% this year. But executives elsewhere, including the beaten-down steel sector, are concerned funds may take years to find their way into the economy and fail to tackle other pressing issues, most notably red tape and energy costs. "Money alone won't do the trick," said Stefan Rauber, CEO of German steelmaker Saarstahl. Klaus Adam, a professor at University College London, echoed that, noting that no moves had yet been taken to address snags in the free flow of labour, capital and goods in the bloc's 32-year-old single market. "Stability and rule of law is all good and people probably appreciate it more than in the past now that others have become erratic," he said. "But of course it is also a bit of a drag because ... we could move a little faster on some fronts." ($1 = 0.9225 euros) https://www.reuters.com/markets/europe/trump-policy-swerves-spur-europe-into-action-any-europhoria-may-be-premature-2025-03-25/

2025-03-25 06:06

HONG KONG, March 25 (Reuters) - China's Vice Premier He Lifeng met Blackstone's (BX.N) , opens new tab Chairman Stephen Schwarzman in Beijing, the official Xinhua news agency reported on Tuesday, stating that the Chinese side said it welcomed more U.S.-funded enterprises and long-term capital. China's He said that the country's economic development was improving and that prospects were brighter. Sign up here. "We welcome more U.S.-funded enterprises and long-term capital, including Blackstone, to continue to deepen mutually beneficial cooperation with China and play a greater role in promoting the healthy development of China-US economic and trade relations," Xinhua quoted the vice premier as saying. Schwarzman said that Blackstone, the world's largest alternative asset manager, was "full of confidence in China's economic development" and willing to "continue to cultivate the Chinese market and play an active role in promoting U.S.-China economic and trade cooperation." Blackstone is raising at least $10 billion in a new Asia private equity fund, which primarily focuses on India, Reuters reported in October. China would not be among the fund's focus markets, sources told Reuters at the time. https://www.reuters.com/business/chinas-vice-premier-meets-blackstone-chairman-beijing-2025-03-25/

2025-03-25 05:45

March 25 (Reuters) - British finance minister Rachel Reeves will publish a forecast from the Office for Budget Responsibility on Wednesday, which is expected to roughly halve Britain's expected growth in 2025 from 2% to about 1%, the Financial Times reported on Tuesday. Reeves' will also reveal in her spring statement that her 9.9 billion pound ($12.79 billion) fiscal buffer had been wiped out, leaving her with about 4 billion pounds in deficit, FT said, citing people familiar with the forecast. Sign up here. Britain's treasury department did not immediately respond to a request for comment outside regular business hours. ($1 = 0.7739 pounds) https://www.reuters.com/world/uk/reeves-say-britains-growth-will-halve-2025-ft-reports-2025-03-25/

2025-03-25 05:44

TOKYO, March 25 (Reuters) - Japan's cabinet has decided to impose an 95.2% anti-dumping duty on China's graphite electrode exports for four months as a provisional measure effective on March 29, a trade ministry official said on Tuesday. The measure comes after a government probe concluded in its interim report last month that China was exporting graphite electrodes, an industrial material used in electric arc furnace steelmaking, at unfairly low prices and causing damage to Japanese companies. Sign up here. The government launched the investigation in April 2024 after receiving an application from Japanese graphite makers SEC Carbon (5304.T) , opens new tab, Tokai Carbon (5301.T) , opens new tab and Nippon Carbon (5302.T) , opens new tab. Earlier this month, a finance ministry council approved the plan to impose the 95.2% duty on graphite electrodes from China provisionally for four months, a period specified in World Trade Organization's (WTO) anti-dumping agreement. https://www.reuters.com/markets/commodities/japan-impose-tariffs-chinas-graphite-electrodes-saturday-nhk-reports-2025-03-25/

2025-03-25 05:31

A look at the day ahead in European and global markets from Ankur Banerjee The prospect of narrower-than-feared U.S. tariffs rekindled some investor optimism in recent days but the relief rally in stocks is already showing signs of petering out, worn down by the unrelenting uncertainty over what comes next. Sign up here. Asian stocks took their cues from Wall Street and rose during the early Asia trading hours on signs that there may be negotiations under way to head off or narrow the scope of reciprocal tariffs due to be announced on April 2. But by afternoon Asian stocks were wavering, while U.S. and European stock futures pointed lower. The markets' gyrations underscore investor skittishness over U.S. tariffs and the damage they could inflict on the global economy as well as on corporate profits. U.S. President Donald Trump indicated on Monday that not all of his threatened levies would be imposed on April 2 and that some countries may get a break. He also warned that automobile tariffs are coming soon and slapped 25% secondary tariffs on any country that buys oil or gas from Venezuela. And those were just the tariff headlines from Monday! With the economic calendar during European hours rather sparse, global trade conflicts will remain in the spotlight even if market reactions for now will likely be muted. Among currencies, the focus during Asian hours was on the Indonesian rupiah , which sank to its lowest level since the Asian financial crisis of the late 1990s on the dollar's overall strength and worries over the fiscal health of Southeast Asia's largest economy. Investor confidence has been waning in Indonesia, where the stock market (.JKSE) , opens new tab last week felt the brunt of investor angst over Indonesian President Prabowo Subianto's massive social spending plans. The dollar was near a three-week high against the yen and the euro after upbeat U.S. services data eased some concerns about where the economy is headed. Overshadowing everything in the markets, however, is what's happening with tariffs - implemented, proposed and on the way - and whether they may undermine economic growth in the United States. Key developments that could influence markets on Tuesday: Economic events: Germany business climate survey for March from the Ifo institute https://www.reuters.com/markets/europe/global-markets-view-europe-2025-03-25/

2025-03-25 05:29

March 24 (Reuters) - Several residents of Los Angeles who were affected by the deadly Palisades wildfire sued city authorities over claims that municipal utility power lines ignited the fire, according to a lawsuit filed Monday. The suit cited a Washington Post article dated January 12, in which the Los Angeles Department of Water and Power told the newspaper its power lines near the origin of the fire had been disconnected from the electricity system for five years, which the residents' lawyers said was incorrect. Sign up here. The Los Angeles city's counsel admitted last week the statement given to Washington Post was incorrect and that the line was energized at the time of the fire, the lawsuit added. "That statement was a result of a misunderstanding. The line had been de-energized for several years before the fire, but as we said in our prior correspondence, it was energized at the time the fire ignited. There were no faults on the line around the time the fire ignited," the lawsuit quoted LADWP's attorney as telling the plaintiff's lawyers. The lawsuit also claimed that two major reservoirs critical to fighting the fire, Santa Ynez and Chautauqua, were drained by the department prior to the fire to forgo proper maintenance as a cost savings decision. The residents are seeking damages including costs of repairing or replacing properties. The Pacific Palisades neighborhood of Los Angeles, along with Altadena on the eastern flank of the metropolis, was the sites of the worst of the January blazes. At least 29 people died in the fires, which damaged or destroyed more than 16,000 structures. A similar lawsuit was filed against the LADWP by residents of the city in January accusing the public utility of failing to properly manage water supplies critical to fighting the fire. The LADWP did not immediately respond to a request for comment outside regular business hours. https://www.reuters.com/world/us/downed-municipal-power-lines-may-have-caused-las-palisades-fire-lawsuit-claims-2025-03-25/