Trump says 25% tariffs on EU will be announced soon

Summary

Marketplace Morning Report: Trump Announces Imminent 25% Tariffs on EU Goods

Release Date: February 27, 2025
Host: Stuart Clarkson
Source: BBC World Service

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U.S.-EU Trade Tensions Escalate

The episode opens with a significant development in international trade as President Trump signals the impending imposition of a 25% tariff on all European Union (EU) goods. Stuart Clarkson reports from the UK, highlighting the EU's stern response to what it deems "unjustified barriers to free and fair trade."

Key Points:

• Trump's Rationale: The administration cites a "massive deficit" with the EU, although European officials argue the actual gap is much smaller when accounting for goods and services.
• Targeted Industries: The automotive sector is under particular threat, with Trump singling out car manufacturers.

In an insightful discussion, European autos market analyst Matthias Schmidt elaborates on the potential repercussions:

"If these tariffs are brought in at 25%, you could almost say it's a perfect storm brewing." (01:19)

Schmidt explains that European manufacturers were strategically diversifying away from heavy reliance on China, but Trump's tariffs could disrupt these plans by making entry into the U.S. market significantly more challenging.

Potential Responses:

• Reciprocal Tariffs: The EU might respond by matching the U.S. tariffs, although Schmidt suggests a more balanced approach is likely:

  "What's likely to happen is there's likely to be a call to go precisely in the opposite direction." (01:56)

  This would involve reducing tariffs to 2.5% each way, fostering a more equitable trading environment and supporting European manufacturers' ambitions.

Confidence in Resolving the Dispute: Schmidt remains cautiously optimistic:

"I would say half confident that the EU can sort out a deal. And I think history has proved that." (02:36)

He believes that Trump’s strategic announcements are aimed at negotiating favorable terms, a tactic consistent with his administration’s approach.

Broader Economic Updates

Tariffs on Canada and Mexico: President Trump has indicated the possibility of delaying tariffs on Canada and Mexico, adding another layer of uncertainty to North American trade relations.

Rolls Royce's Profitable Year: British jet engine manufacturer Rolls Royce reported a 55% increase in profits last year. Notably, the company is issuing dividends to shareholders for the first time since the COVID-19 pandemic, signaling a strong recovery. Rolls Royce maintains significant contracts with major aerospace players like Airbus and Boeing.

Oil Market Movements: Oil prices have seen a slight uptick following President Trump's decision to revoke a license previously granted to Chevron for operations in Venezuela. This move has implications for global oil supplies and market dynamics.

Cryptocurrency Heist and Innovative Recovery Efforts

A dramatic episode unfolds in the world of cryptocurrency, where the exchange Bybit suffered a theft of nearly $1.5 billion in Ethereum coins. The FBI attributes the hack to North Korean operatives, prompting an international response involving bounty hunters.

Insights from Joe Tidy (BBC Reporter):

"We can see this $1.46 billion worth of crypto going out of the Bybit exchange wallets into the hacker's address." (03:41)

Tidy explains that the transparent nature of the blockchain allows investigators to trace funds as they're dispersed into smaller chunks, complicating efforts to obscure their origins. Bounty hunters are actively monitoring these transactions, racing to notify exchanges when stolen funds appear, thereby enabling freezes. Successful interceptions earn them a 5% bounty from Bybit.

Pokémon Company's Enduring Success and Challenges

The Pokémon franchise, a stalwart of global media, continues to thrive nearly three decades after its inception. Despite remaining private and not disclosing earnings, the company’s product lines are estimated to generate $150 billion in sales.

Conversations with Pokémon Company President:

"The original game was groundbreaking because it allowed users to exchange Pokémon that you catch with your friends and other players." (05:14)

The President attributes Pokémon’s longevity to its emphasis on social interaction and continuous expansion, growing from 151 to over 1,000 Pokémon, thereby engaging multiple generations of fans.

Combatting Counterfeits: In response to increasing counterfeit products, the company has taken legal action against infringers, including the makers of the survival adventure game Palworld.

"We've been fighting fakes since the beginning. The more popular Pokémon became, the worse the problem." (05:47)

High-Value Collectibles: Rare Pokémon cards have surged in value, with influencer Logan Paul holding a Guinness World Record for purchasing a card worth over $5 million. The President emphasizes that while high-value cards exist, the core value lies in play and community.

"The true value of Pokémon is to play, have fun and communicate with friends." (06:18)

Legal Victory for Time-Waive Precautions

In a unique legal case from Bangalore, India, an individual successfully sued a cinema multiplex chain for losing 25 minutes due to excessive advertisements and trailers before a movie screening. The court awarded him approximately $630 in compensation, underscoring the increasing valuation of personal time in the modern era.

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This episode of the Marketplace Morning Report provides a comprehensive overview of critical global economic developments, from escalating trade tensions between the U.S. and EU to groundbreaking moves in the cryptocurrency and entertainment industries. Through expert interviews and detailed reporting, listeners gain valuable insights into the interconnectedness of international markets and the evolving challenges faced by major corporations.

Transcript

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[Stuart Clarkson]

Revving up the engine on a possible trade war between the US And Europe. Live from the UK this is the Marketplace Morning report from the BBC World Service. I'm Stuart Clarkson in for Liana Bern today. So now the European Union is in the frame for President Trump. The European Commission says it'll react firmly and immediately against unjustified barriers to free and fair trade after Mr. Trump threatened a 25% tariff on all goods from the Continent. He says there's a massive deficit, but Europe argues the gap is much smaller when goods and services are taken into account. The car making sector was singled out by Trump. We've got Matthias Schmidt with us, who's a European autos market analyst. Good morning, Matthias. Hi.

[Matthias Schmidt]

Thanks for having me.

[Stuart Clarkson]

So how big an issue could this be for carmakers in Europe? If these tariffs are brought in at.

[Matthias Schmidt]

25%, you could almost say it's a perfect storm brewing. European manufacturers were extremely exposed to China. China's switching its purchasing patterns, so it's becoming more patriotic. Chinese consumers are purchasing Chinese brands at a record pace. And European OEMs. The manufacturers were hoping to kind of use the US to de risk from China. Precisely at this time, the Trump administration are looking to increase the barriers to entry to the US Market.

[Stuart Clarkson]

I guess if the EU reciprocates, puts its tariffs up to the same level as the US Is going to charge, the impact on the US Isn't as big a deal.

[Matthias Schmidt]

What's likely to happen is there's likely to be a call to go precisely in the opposite direction. So at the moment, the trading field is asymmetric. So importing a vehicle from the US to Europe, 10% tariffs of charge. And to go the other way, it's 2.5% tariffs and there's an increased call from European CEOs, from car manufacturers to in fact lower tariffs. So it would be 2.5% each way rather than going up to 25%, which would torpedo the European manufacturer manufacturers ambitions going forward.

[Stuart Clarkson]

And are the European manufacturers, do you think worried or do you think they're confident that the EU will sort out a deal that benefits them?

[Matthias Schmidt]

I would say half confident that the EU can sort out a deal. And I think history has proved that. Trump uses these kind of announcements to try and work out a solution, and this is probably what his playbook is.

[Stuart Clarkson]

Okay, really appreciate your insight into this. Thanks for joining us on Marketplace.

[Matthias Schmidt]

Matthias, thank you very much.

[Stuart Clarkson]

Meanwhile, President Trump has said the deadline for tariffs on Canada and Mexico could be delayed again. Let's do the numbers now. Profits were up 55% last year at British jet engine maker Rolls Royce. The company is paying a dividend to shareholders for the first time since the COVID pandemic. The firm counts Airbus and Boeing among its customers. And oil prices edged up slightly. This is after President Trump announced a reversal of a license given to Chevron to operate in Venezuela. Now a cryptocurrency company in Dubai is recruiting bounty hunters to help track stolen funds. Bybit recently had nearly one and a half billion dollars of Ethereum coins stolen. The FBI says North Korea was behind the hack. Here's the BBC's Joe Tidy.

[Joe Tidy]

It's on the blockchain, this giant database of transactions. So we can see this $1.46 billion worth of crypto going out of the Bybit exchange wallets into the hacker's address. And now we know that the way North Koreans, they are splitting it into smaller chunks to try and obscure the origins. So right now what the bounty hunters are doing are watching those transactions take place. And whenever the money is hitting an authoritative company, for example, an exchange, they're racing each other to message the exchange and say, look, we think this money has come from the Bybit hack. Freeze it. And if they're successful, Bybit is giving 5% to the bounty hunters.

[Stuart Clarkson]

That's the BBC's Joe Tidy reporting. Now, even if you're not into gaming, you'll have heard of Pokemon. The franchise launched on Nintendo's game boy nearly 30 years ago, and since then it's become a billion dollar global media brand. The Pokemon company remains private and doesn't release earnings, but it's estimated to have sold $150 billion worth of products. The BBC's Mariko Oy has been speaking to the company's president.

[Sponsor Announcer]

I'm at one of two dozen Pokemon centers around the world where they sell toys, stationaries, cars, you name it. Since Pocket Monsters was released, their popularity hasn't died down. And what looks like a simple card game can be sold for hundreds of thousands of dollars. So what's the secret to their success? I put that question to the president of the Pokemon company.

[Pokemon Company President]

I believe the original game was groundbreaking because it allowed users to exchange Pokemon that you catch with your friends and other players. So it wasn't an introverted activity, but it became a tool to actively communicate with others. The number of Pokemon, which started at 151, has increased to more than 1,000 today. And their fans also grew and now span across several generations.

[Sponsor Announcer]

What about counterfeits and patent infringement? You recently sued the maker of the hit survival adventure game Palworld. What are you doing about those fake Pokemon?

[Pokemon Company President]

We've been fighting fakes since the beginning. The more popular Pokemon became, the worse the problem. It affects our creativity, and our customers get disappointed when they receive products that aren't authentic.

[Sponsor Announcer]

And that's not their only challenge. Pokemon cards are sold for a price tag of six or even seven figures, with influencer Logan Paul currently holding the Guinness World Records for the most expensive Pokemon trading card, which he bought for more than $5 million.

[Pokemon Company President]

If the cards are rare or seen as vintage, their value goes up to us. The true value of Pokemon is to play, have fun and communicate with friends.

[Sponsor Announcer]

Along with hello Kitty and Super Mario, Pokemon is one of Japan's three big soft power. And the Pokemon company is the only one that remains private despite its huge revenue. But Mr. Ishihara says that's not the biggest difference.

[Pokemon Company President]

Hello Kitty is one of the characters for Sanrio, and Super Mario is one of the characters for Nintendo. But Pokemon is the only thing we do at the Pokemon company.

[Sponsor Announcer]

I'm the BBC's Marie Kohe for Marketplace.

[Stuart Clarkson]

And a man from Bangalore in India has successfully sued a cinema multiplex chain for the 25 minutes he lost sitting through adverts and trailers before the movie. The court ruled. In the new era, time is money and each one's time is very precious. He's been awarded around $630 compensation. Compensation. Our producer today was James Graham in the UK. I'm Stuart Clarkson with the Marketplace Morning report from the BBC World Service.