TL;DR

Trump mulls 50% EU tariffs; OPEC+ hikes output; Asian equities, oil, and tech slide on trade risks.

Highlights

• Trump administration weighs tariffs up to 50% on EU goods; 10% base tariff now set for August 1 12.
• China rejects U.S. tariff threats on BRICS nations; U.S.–China trade tensions persist 3.
• OPEC+ to increase crude output by 548,000 bpd in August; oil prices fall, but Aramco raises selling prices 4.
• Asian equities and U.S. futures decline ahead of U.S. tariff deadlines; volatility rises 9.
• PBOC surveys banks on dollar weakness as yuan appreciation risk grows; Dollar Index posts worst H1 since 1973 8.
• China boosts FX reserves to $3.3 trillion, adds gold for eighth month, and considers doubling Southbound Bond Connect quota 67.
• Samsung and LG warn of sharp Q2 profit declines on AI chip delays, U.S. export controls, and tariffs 11.
• Shell cuts Q2 gas output guidance, warns on weaker oil/gas trading; expects marketing strength but chemicals loss 20.
• Israel launches major airstrikes on Houthi ports in Yemen, heightening Red Sea shipping risks 5.
• Russia’s airports disrupted by drone threats, costing airlines $220 million/day; operations remain unstable 18.
• BBVA enables Bitcoin and Ether trading for Spanish retail clients, a first for a major EU bank 14.
• U.S. and China to begin talks on TikTok sale to Oracle -led group; new app launch September 5 19.

Commentary

Trade policy remains the primary driver for global markets this week. The Trump administration’s potential escalation of tariffs on EU goods, alongside the formalization of a 10% base tariff (now effective August 1), is increasing uncertainty for cross-border flows 12. The EU and China have signaled readiness to respond, with China specifically rejecting additional U.S. tariffs on BRICS-aligned countries 3. With formal tariff notifications expected imminently, risk sentiment is under pressure, as reflected in declines across Asian equities and U.S. futures 9.

Currency and capital flow dynamics are also in focus. The PBOC’s survey of domestic banks regarding the dollar’s slide—amid the weakest first-half for the Dollar Index since 1973—suggests Beijing is monitoring yuan appreciation risks closely 8. China’s continued FX reserve accumulation, gold purchases, and a possible doubling of the Southbound Bond Connect quota indicate ongoing efforts to manage capital stability and diversify reserves 67.

In commodities, OPEC+’s larger-than-expected August supply hike has weighed on oil prices, though Saudi Aramco’s price increases for key regions signal confidence in demand, particularly in Asia 4. Shell ’s Q2 update highlights ongoing sector headwinds, with weaker oil and gas trading and reduced gas output guidance, partially offset by strength in marketing 20.

Geopolitical risks persist. Israel’s airstrikes on Houthi-controlled Yemeni ports raise the threat level for Red Sea shipping, a corridor critical for global trade 5. Meanwhile, Russian airspace disruptions from drone threats are causing significant costs and operational instability for airlines 18.

In tech, Samsung and LG’s profit warnings underscore the drag from delayed AI chip shipments, U.S. export controls, and tariffs 11. Separately, the U.S.–China talks on the TikTok sale could affect the broader tech sector, particularly cross-border M&A and data privacy concerns 19. BBVA’s retail crypto rollout in Spain marks a notable step in mainstream digital asset adoption within the EU 14.