EU Offers Trump Fresh Trade Deal — Lobsters Included

• The EU has proposed phased tariff cuts on non-sensitive goods and extended a tariff-free U.S. lobster import deal, worth $108 billion, to revive trade talks with the Trump administration, while threatening $108 billion in retaliatory tariffs if negotiations fail.
• U.S.-China trade tensions persist despite a 90-day tariff pause, with China threatening legal action over U.S. restrictions on Huawei chips, impacting trade flows as Chinese Apple (AAPL) iPhone shipments to the U.S. hit a low not seen since 2011 in April.
• Corporate responses to trade uncertainties include Nike (NKE) raising prices on adult gear by up to $10 and returning to Amazon (AMZN), while Walmart (WMT) faces pressure from President Trump to absorb tariff costs amid planned price hikes, with JPMorgan (JPM) CEO Jamie Dimon warning of potential stagflation.

YF reports that the European Union has put forward a new trade proposal to the United States, aiming to break the deadlock in negotiations with the Trump administration, amid a complex global trade landscape marked by tensions and strategic maneuvering. The EU’s offer centers on phased tariff reductions for non-sensitive goods, alongside enhanced cooperation in critical sectors such as energy, artificial intelligence, and digital infrastructure. To bolster the proposal, the EU is prepared to extend a 2020 tariff-free agreement on U.S. lobster imports, valued at $108 billion, which has supported U.S. exports to the bloc since its inception and is set to expire in July. Failure to reach an agreement could prompt the EU to impose $108 billion in retaliatory tariffs, escalating transatlantic trade tensions that already jeopardize $9.5 trillion in annual business, according to the American Chamber of Commerce.

Concurrently, the U.S.-China trade truce, established with a 90-day tariff pause, is showing signs of strain. China’s Commerce Ministry has threatened legal action against entities supporting U.S. efforts to curb the use of Chinese advanced semiconductors, specifically citing Huawei. This follows a U.S. Commerce Department warning that using Huawei chips globally would breach export controls, a statement later retracted, highlighting the fragility of the trade thaw. The ongoing disputes have already impacted trade flows, with Chinese shipments of Apple (AAPL) iPhones and mobile devices to the U.S. dropping to their lowest level since 2011 in April, reflecting the broader economic fallout from reciprocal tariffs.

The trade uncertainties are compounding economic concerns in the U.S., with JPMorgan (JPM) CEO Jamie Dimon warning on Wednesday of potential stagflation driven by geopolitical risks, fiscal deficits, and persistent price pressures. These pressures are already influencing corporate strategies. Nike (NKE) announced price increases of up to $10 on select adult gear starting next week, while keeping children’s prices unchanged, and plans to resume sales on Amazon (AMZN) after a six-year hiatus to counter competitive challenges. Similarly, Walmart (WMT) signaled forthcoming price hikes last week, prompting a sharp response from President Trump, who urged the retailer to absorb the tariff costs. These developments underscore the broader economic ripple effects of trade policies, as businesses navigate rising costs and shifting market dynamics.

The interplay of these trade negotiations and tariff disputes highlights the delicate balance of global economic relations. The EU’s proposal reflects a strategic push to deepen ties with the U.S. while countering the risks of a tariff war, particularly as the bloc seeks to secure its economic interests in advanced technologies. Meanwhile, the U.S.-China tensions over semiconductors and trade restrictions signal ongoing challenges in achieving a stable global trade environment, with significant implications for major corporations and the broader economy.

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