TL;DR

U.S.-EU tariffs escalate, China rare earth ban hits autos, oil surges on supply and geopolitical risks.

Highlights

• U.S. doubles tariffs on EU steel and aluminum to 50%; EU threatens $107B in retaliatory tariffs, with negotiations ongoing and measures possible by July 14 1.
• China maintains rare earth magnet export ban, risking imminent U.S. auto production cuts and factory shutdowns 2.
• OECD cuts 2025 global growth forecast to 2.9% (from 3.1%) due to U.S.-China tariffs; U.S. and Asian exporters downgraded 4.
• Global equities and U.S. dollar fall on tariff escalation; automakers drop >4%, steelmakers rally, gold and oil surge 6.
• WTI crude jumps 5% to $63.39/bbl on OPEC+ supply restraint, Canadian wildfires (350,000 b/d offline), and geopolitical risks 78.
• Bank of Japan expected to pause JGB purchase tapering amid yield volatility and liquidity concerns in super-long bonds 3.
• U.S. plans tighter tech export controls and chip software bans targeting Chinese firms; TSMC projects record 2025 profit on AI demand but warns tariffs could dampen global demand 1213.
• White House expects Trump-Xi trade call this week; markets watch for possible movement on trade tensions 5.
• EU prepares 18th Russia sanctions package targeting energy, Nord Stream, and banking; NATO reaffirms Ukraine’s irreversible membership path 910.
• Ukraine claims major underwater blast damages Crimea Bridge, disrupting Russian supply lines 11.
• SEC confirms U.S. banks and Wall Street can now custody and offer Bitcoin services 14.
• KKR withdraws £4bn rescue bid for Thames Water, raising risk of special administration and highlighting U.K. utility sector stress 15.

Commentary

Global markets are under pressure as U.S. tariff actions against the EU and China escalate trade friction 16. The EU's threat of up to $107 billion in retaliatory tariffs and China's ongoing rare earth export ban are amplifying supply chain risks, particularly for the automotive and industrial sectors 12. The OECD's downgrade of global growth to 2.9% for 2025 highlights the drag from these disputes, with the U.S. and export-driven Asian economies facing the sharpest outlook cuts 4. Equity markets are reflecting these risks: automakers are sharply lower, while U.S. steelmakers benefit from tariff protection 6. The U.S. dollar's decline and a move into gold underline investor caution 6.

Energy markets are seeing heightened volatility. WTI crude surged 5% on a combination of OPEC+ output restraint, Canadian wildfire-related supply disruptions, and ongoing geopolitical tensions involving Russia, Ukraine, and Iran 78. Natural gas prices are also up, with the market pricing in tighter supply and persistent risks 7. The Bank of Japan's expected pause in JGB purchase tapering signals concern over bond market liquidity and could stabilize Japanese yields, a development to watch for global fixed income flows 3.

In tech, the U.S. is tightening export controls on Chinese firms, targeting chip software and supply chains 12. TSMC continues to benefit from robust AI chip demand, projecting record 2025 profits, but notes that tariffs may eventually weigh on global demand 13. Meanwhile, the SEC's move to allow banks and Wall Street to custody Bitcoin marks a significant step for institutional crypto adoption, potentially boosting digital asset flows 14.

Geopolitical risks remain elevated. The EU is preparing another sanctions package against Russia, while NATO reaffirmed Ukraine’s path to membership and the U.S. commitment to troop presence in Europe 910. Ukraine’s attack on the Crimea Bridge may disrupt Russian logistics and adds to regional uncertainty 11. In the UK, [Thames Water’s failed rescue bid underscores ongoing stress in the utility sector, with broader implications for UK credit markets 15.

Traders should focus on upcoming U.S.-China and EU-U.S. trade negotiations, developments in energy and commodity markets, and central bank policy signals 15. Monitoring supply chain disruptions and sector-specific volatility—especially in autos, commodities, and utilities—remains key as macro and geopolitical headwinds persist 2615.