economy

The United States is far more dependent on the European Union for imports than previously thought. A new study by Germany’s IW economic institute shows that Europe now surpasses China not only in the value but also in the number of product groups on which American buyers rely. This shift gives Brussels unexpected leverage in trade disputes with Washington.

EU Surpasses China in Key Sectors
According to IW, the number of product groups where at least half of U.S. imports come from the EU jumped from 2,600 in 2010 to over 3,100 in 2024. This includes a wide range of goods – from chemicals and machinery to electronics and household appliances.
In dollar terms, U.S. imports tied to these categories from Europe reached $287 billion last year, nearly two and a half times higher than in 2010. By comparison, China supplied 2,925 groups worth $247 billion, with its share steadily shrinking due to “de-risking” policies.

Von der Leyen Held a Stronger Position
The IW study suggests that European Commission President Ursula von der Leyen had a stronger hand in recent tariff talks with Washington than previously acknowledged. The outcome was a 15% baseline tariff on most EU goods – a compromise that, in hindsight, appears more favorable to Europe.
According to co-author Samina Sultan, the data can serve as a warning: if the U.S. escalates tariffs further, it risks “shooting itself in the foot,” as many American sectors would struggle without European supplies.

Europe’s Potential Weapon: Export Restrictions
IW notes that, as a last resort, the EU could restrict exports of critical goods – a move that would hit the U.S. economy quickly. While such a step remains unlikely, the very existence of this option strengthens Europe’s negotiating power amid rising tensions.

Bessent: U.S. Won’t Act Against China Without Europe
Energy policy has also entered the debate. U.S. Treasury Secretary Scott Bessent stated that Washington will not impose new tariffs on China’s oil-linked goods unless Europe joins in.
“We won’t move forward without Europe,” he stressed. The Trump administration is pressing the EU to introduce 50% to 100% tariffs on China and India over their purchases of Russian oil. Bessent even argued that if Europe imposed tough secondary tariffs, the war in Ukraine could be “over within 60 to 90 days” by cutting off Russia’s primary revenue stream.

Europe’s Export Card
The IW study positions Europe not just as a partner, but as a strategic power broker holding a vital economic lever. If transatlantic tensions escalate, the EU’s ability to control exports may prove decisive in tariff and energy disputes.

#usa , #Eu , #economy , #GlobalMarkets , #Geopolitics

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The United Kingdom is facing one of its biggest financial challenges in recent years. According to a new report by the City of London Corporation, the country is expected to encounter a staggering £150 billion funding gap over the next five years. To bridge this shortfall, London is calling for bold reforms and a massive inflow of private investment.

Investment Gap: Businesses and Infrastructure Struggle
The report highlights that small and medium-sized enterprises (SMEs) face an annual £15 billion financing shortfall, stifling growth and innovation. Infrastructure shows an equally dramatic gap – from housing and energy to transport and digital networks.
Chris Hayward, Chair of the City’s Policy Committee, warned that inaction would come at a high cost: lost opportunities, reduced productivity, and slower economic growth.

Pension Reform as a Key Solution
The City is pushing for pension reform and clearer project planning. It points to examples from Canada and Australia, where domestic pension funds have become pillars of infrastructure investment.
The UK has already taken first steps. The Mansion House Agreement saw 17 of the country’s largest pension funds commit to allocating up to 10% of their portfolios to private markets by 2030. At least half of this capital is expected to flow into UK assets – potentially unlocking £50 billion in new investments.
But the City insists this won’t be enough. Investors, it argues, need greater transparency and a concrete list of projects to know where their money will go.

Investment Opportunities Exist – If Conditions Are Right
Britain’s ability to attract global capital is clear. Recently, BlackRock invested $700 million into UK data centers. Analysts say investor appetite remains strong – provided the environment is stable and returns are attractive.

Labour Government Pushes for Economic Restart
The new Labour government under Prime Minister Keir Starmer aims to unleash investments into infrastructure, green energy, and high-growth sectors. A new investment hub is also being set up to connect global funds with UK projects, making Britain a simpler and more attractive destination for capital.

The Pension Capital Debate
UK pension funds remain a sticking point. While in the 1990s they invested up to 50% of portfolios in domestic equities, today that figure has dropped to just 4%. Fund managers prefer foreign markets, where they see higher returns with lower risk.
This trend fuels a heated debate:

🔹 Reform advocates argue that redirecting pensions back into the UK would drive growth and finance much-needed infrastructure.

🔹 Critics warn it could endanger savers and force fund managers to breach their fiduciary duty to act in members’ best interests.
Even the CEO of Aviva recently cautioned that pushing pension funds to invest domestically “is not always the best way to maximize returns.”

The United Kingdom now stands at a crossroads: it must either mobilize domestic savings and attract global capital, or risk seeing its £150 billion deficit deepen and economic stagnation worsen.

#UK , #investments , #economy , #worldnews , #markets

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The U.S. Senate has narrowly confirmed Trump’s advisor Stephen Miran to the Federal Reserve Board of Governors in a 48–47 vote.
Miran now becomes the first active White House advisor to serve on the Fed’s board since the institution’s reorganization in the 1930s. He will join the central bank this week, just in time for a two-day meeting that will shape the nation’s economic trajectory.

Independence of the Fed Under Scrutiny
Miran’s confirmation has immediately sparked concerns about whether the central bank can maintain its traditional independence. During his hearing, Miran pledged to take unpaid leave from his White House position, a move aimed at calming fears of conflicts of interest. Critics, however, noted that he did not fully resign and warned that his ties to Trump could influence his decision-making.
Senator Elizabeth Warren cautioned that Miran could be seen as “an extension of the president” rather than an impartial regulator. The concern comes amid Trump’s openly stated ambition to secure a majority on the Fed board — a move that, according to experts, could fundamentally alter the institution’s independence.

Trump’s Strategy: Greater Influence Over the Fed and Cook’s Ouster
Trump has long criticized Fed Chair Jerome Powell for keeping rates “too high” and argued that the central bank is slowing down the economy. With Miran’s support, he now gains more leverage over Fed decision-making.
Tensions escalated further when Trump attempted to remove Fed Governor Lisa Cook, accusing her of mortgage fraud and invoking his constitutional authority to dismiss her. Cook has denied the allegations and is fighting back in court. A federal appeals court has so far reinstated her, blocking Trump’s move just hours before the Fed’s monetary policy meeting.

Miran’s Economic Views
Stephen Miran is known for backing Trump’s global tariff strategy. He argues that import duties do not necessarily fuel inflation and believes stricter immigration policy could reduce housing demand and lower prices.
His economic outlook largely aligns with Trump’s, fueling concerns that he won’t act as an independent voice on the Fed board.

What’s Next?
The Fed is facing a critical decision on interest rates. Economists widely expect at least a quarter-point cut to support the labor market. Miran’s fresh appointment comes at a moment when even small shifts in monetary policy could directly impact mortgage rates, loans, and credit costs for millions of Americans.
One thing is clear: Trump’s drive to reshape the Fed is far from over, and today’s vote is proof of that ambition.

#FederalReserve , #TRUMP , #USPolitics , #economy , #Powell

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