TL;DR

U.S. sets 25% tariffs on Japan/Korea; China, Germany warn; EU readies harsh Russia sanctions.

Highlights

• Trump to impose 25% tariffs on all Japanese and South Korean imports from Aug. 1; Japan rejects auto duties, S&P 500 falls ~1%117.
• China warns of retaliation if U.S. revives steep tariffs in August; truce at risk2.
• German exports drop 1.4% in May, with U.S.-bound shipments at a three-year low amid tariff uncertainty7.
• EU preparing toughest Russia sanctions since 2022, targeting oil revenues and intermediaries, coordinated with U.S. Senate4.
• Russia launches large-scale Zaporizhzhia offensive, advances in Donetsk; Ukraine signals six-month window without new aid5.
• Houthi attacks sink and disable bulk carriers in Red Sea; Israel strikes Yemeni ports, raising shipping risk3.
• RBA holds rates at 3.85% in split vote; AUD jumps, bonds fall, equities slip6.
• Cairo telecom hub fire disrupts Egypt’s internet, halts stock exchange; recovery expected within 24 hours8.
• Ingram Micro ransomware attack disrupts global tech supply chains and order fulfillment9.
• EU regulator investigates Robinhood ’s tokenized OpenAI and SpaceX shares for compliance after OpenAI objections10.
• Dubai approves first tokenized money market fund; Pakistan establishes independent crypto regulator1219.
• UK set to miss U.S. steel tariff deal deadline, risking 25–50% tariffs on metals exports18.

Commentary

Trade policy is a central risk driver this week. The U.S. move to impose 25% tariffs on all Japanese and South Korean imports from August, with the S&P 500 reacting negatively, signals a renewed escalation in global trade tensions1. Japan’s refusal to accept auto tariffs17 and China’s warning of retaliation if U.S. duties on Chinese goods are reinstated in August both point to a deteriorating trade environment2. German May export data, showing a 1.4% drop and a sharp decline in U.S.-bound shipments, highlights the direct impact of tariff uncertainty on global supply chains and export-driven economies7.

Geopolitical risk remains elevated. The EU is coordinating its harshest sanctions on Russia since 2022, targeting oil revenues and intermediaries, just as Russia intensifies its offensive in Ukraine’s Zaporizhzhia and Donetsk regions45. Ukraine’s warning that it may only hold out for six more months without increased Western support adds urgency to the situation5. In the Middle East, renewed Houthi attacks have sunk and disabled bulk carriers in the Red Sea, prompting Israeli airstrikes on Yemeni ports and raising the risk profile for global shipping and insurance markets3.

Monetary policy and operational disruptions are also in focus. The Reserve Bank of Australia’s surprise rate hold, despite expectations for a cut, pushed the AUD higher and weighed on bonds and equities6. In Egypt, a major telecom fire temporarily halted stock trading and disrupted digital transactions, though a near-term recovery is expected8. Meanwhile, a ransomware attack on Ingram Micro is causing global supply chain delays in the tech sector, with some partners shifting orders to competitors9.

Digital asset regulation is advancing, with the EU probing Robinhood ’s tokenized equity products after OpenAI’s objections10, and Dubai and Pakistan moving forward with new frameworks for tokenized funds and crypto oversight1219. The UK’s likely failure to meet a U.S. deadline on steel tariffs leaves its metals sector facing elevated costs and ongoing uncertainty18.

Traders should monitor further developments in U.S. trade policy, EU-Russia sanctions, and Red Sea shipping security. Expect continued volatility in equities, especially in export and industrial sectors, and potential upward pressure on oil and shipping costs134. Currency and bond markets may respond to central bank decisions and geopolitical headlines68.