Approval comes the day of Trump’s “reciprocal” tariffs on the EU and others take effect

International news via Reuters:

European Union countries are expected to approve on Wednesday the bloc’s first countermeasures against U.S. President Donald Trump’s tariffs, joining China and Canada in retaliating and escalating a conflict that could become a global trade war. 

The approval will come on the day that Trump’s “reciprocal” tariffs on the EU and dozens of countries took effect, including massive 104% duties on China, extending his tariff onslaught and spurring more widespread selling across financial markets.

The 27-nation bloc faces 25% import tariffs on steel and aluminium and cars as well as the new broader tariffs of 20% for almost all other goods under Trump’s policy to hit countries he says impose high barriers to U.S. imports.

The European Commission, which coordinates EU trade policy, proposed on Monday extra duties mostly of 25% on a range of U.S. imports in response specifically to the U.S. metals tariffs.

It is still assessing how to respond to the car and broader levies.

The imports include motorcycles, poultry, fruit, wood, clothing and dental floss, according to a document seen by Reuters.

They totalled about 21 billion euros ($23 billion) last year, meaning the EU’s retaliation will be against goods worth less than the 26 billion euros of EU metals exports hit by U.S. tariffs.

They are to enter force in stages – on April 15, May 16 and December 1.

A committee of trade experts from the EU’s 27 countries will vote on Wednesday afternoon on the Commission’s proposal, which will only be blocked if a “qualified majority” of 15 EU members representing 65% of the EU population vote against.

That is an unlikely event given the Commission has already canvassed EU members and refined an initial list from mid-March, removing U.S. dairy and alcoholic drinks.

Major wine exporters France and Italy had expressed concern after Trump threatened to hit EU wine and spirits with a 200% tariff if the EU went ahead with its planned 50% duty on bourbon.

Trump has already responded to Beijing’s counter-tariffs announced last week, nearly doubling duties on Chinese imports. China has vowed to “fight to the end”. ($1 = 0.9178 euros)

Reporting by Philip Blenkinsop; Editing by Toby Chopra

The dollar was last down 0.6% against the Japanese yen and 0.7% against the Swiss franc

International news via Reuters:

The U.S. dollar fell on Tuesday while the euro perked up as stocks bounced in Asia and Europe on hopes that U.S. President Donald Trump will enter negotiations over his sweeping tariffs that have roiled markets for three days.

Rises in both the Japanese yen and Swiss franc showed consistent appetite for safe-havens, however, as investors remain concerned about the potential for a global recession.

Currencies have been highly volatile in recent days as investors tried to work out which offer safety while markets sell off, and which economies might be worst hit.

On Tuesday the euro was last up 0.3% at $1.0936, down from an earlier rise of more than 0.7%, after falling for the two previous days.

Currencies that often fare well when stock markets are rising also recovered, with the pound up 0.3% and the Australian dollar 1% higher after both dropped in the previous two sessions.

“Sentiment is rebounding, perhaps on the view that Trump may focus protectionism on China and speed up trade deals elsewhere,” said Francesco Pesole, currency strategist at ING. “Markets may be erring on the optimistic side though.”

Investors on Tuesday gleaned some positive signs from the Trump administration about tariff talks. Treasury Secretary Scott Bessent said on Monday he hoped negotiations would bring levies down.

Trump said Japan was sending a team to start negotiations, helping Japanese equities rally sharply overnight.

However, China dug in and criticised what it called “blackmail” from the United States over Trump’s threat of additional 50% tariffs in response to China’s initial retaliation. Meanwhile the European Union floated 25% counter-tariffs on some U.S. goods.

The dollar was last down 0.6% against the Japanese yen, traditionally seen as a safe-haven at times of market stress, at 146.95 yen to the dollar, after touching a six-month low against the yen on Friday.

The dollar was also down 0.7% against the Swiss franc. That helped push the U.S. dollar index, which measures the currency against six peers, 0.3% lower to 103.12.

The index has fallen around 0.7% since Trump announced the tariffs on April 2, as investors have weighed up the hit to the U.S. economy against the currency’s typical role as a shield from market slumps.

“The current volatility is entirely the result of the policy choices of the Trump administration, meaning that, if reversed, the impact on financial markets will likely reverse as well,” said Nathan Lim, chief investment officer at Lonsec Investment Solutions.

China’s yuan fell to its weakest level since 2023 after the central bank slightly loosened its grip on the currency in what analysts said was an attempt to counteract the blow to exports from tariffs.

The move “has added to building speculation amongst market participants that China could allow a bigger devaluation of the renminbi to offset the negative impact (of) the worsening trade war,” said Lee Hardman, senior currency analyst at MUFG, using an alternative name for the yuan.

Reporting by Harry Robertson in London, additional reporting by Ankur Banerjee in Singapore; Editing by Aidan Lewis, Shri Navaratnam, Rachna Uppal, Peter Graff