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South Korea’s government on Tuesday held emergency talks after US President Donald Trump said he will raise tariffs on South Korean goods, including autos, lumber and pharmaceuticals.Trump said Monday that he would raise tariffs on the goods, accusing South Korea of not living up to an earlier trade pact struck with Washington.South Korea’s presidential office said it had not been officially informed about the tariff hike plans in advance.The increase would bring tariff levels from 15 percent to 25 percent.”South Korea’s Legislature is not living up to its Deal with the United States,” Trump wrote on his Truth Social platform.He added that he was increasing tariff rates “because the Korean Legislature hasn’t enacted our Historic Trade Agreement, which is their prerogative.”On Tuesday, Seoul convened an emergency meeting to hash out a response, with Trade and Industry Minister Kim Jung-kwan, currently in Canada, joining remotely.”Our government intends to convey its commitment to implementing the tariff agreement to the US side, while responding in a calm and measured manner,” Seoul said in a statement.The country added it believed Washington’s “tariff hikes only take effect after administrative steps such as publication in the Federal Register”.South Korea has said Trade Minister Kim will travel to Washington for talks on the issue with US Commerce Secretary Howard Lutnick.Trump’s apparent about-face comes months after Washington and Seoul struck a trade and security deal, capping a period of tense negotiations.The agreement was finalized after Trump met his South Korean counterpart Lee Jae Myung in October, and included investment promises by South Korea alongside tariff cuts by the United States.Since then, it has remained in something of a legal limbo in South Korea.Seoul’s presidential office insisted in November that the deal does not require parliamentary approval, arguing it represents a memorandum of understanding rather than a binding legal document.Asked whether the tariff deal had been submitted to parliament for approval, a senior official told AFP on Tuesday they were looking into it but did not elaborate.Under the pact, Washington would maintain levies of up to 15 percent on South Korean goods including vehicles, car parts and pharmaceuticals.Crucially, the deal’s terms brought US tariffs on South Korean cars down from a 25 percent level.Trump’s latest threat, if enacted, would reverse that.- Export pain -The auto industry accounts for 27 percent of South Korea’s exports to the United States, which takes in nearly half of the country’s car exports.A reversal to a higher tariff level could also put South Korean exports in a less advantageous position compared with economies like Japan and the European Union, which have both struck deals for a 15 percent US tariff.The Trump administration has yet to issue formal notices to enact the changes.The US president’s threat targeting South Korea is his latest against key trading partners in recent days.Over the weekend, Trump warned Canada that if it concludes a trade deal with China, he would impose a 100 percent tariff on all goods coming across the border.Earlier in January, Trump also threatened to slap tariffs on multiple European nations until his purchase of Greenland is achieved. He has since backed off the threat.

Asian markets rose Tuesday following gains on Wall Street, with tech firms leading Seoul to another record as investors brushed off Donald Trump’s threat to hike tariffs on South Korean goods.The yen held its gains after a two-day surge stoked by intervention talk, while geopolitical and economic uncertainty saw silver hit another fresh peak and gold hover just below its own high.Traders are also gearing up for a Federal Reserve policy meeting and earnings from tech titans, which will be pored over for an idea about sustainability of the AI investment surge.Equities enjoyed healthy buying despite the US president reverting to tariff threats, warning South Korea he would impose 25 percent tolls on goods including autos for falling short of expectations on an earlier pact struck with Washington.The announcement comes months after the two sides struck a trade and security deal following tense negotiations, setting levies at 15 percent.”South Korea’s Legislature is not living up to its Deal with the United States,” Trump wrote on his Truth Social platform.He added that he was increasing tariff rates “because the Korean Legislature hasn’t enacted our Historic Trade Agreement, which is their prerogative.”The presidential office in Seoul said it had not been informed in advance but added that Trade Minister Kim Jung-kwan, currently in Canada, would head to Washington for talks with US Commerce Secretary Howard Lutnick.Trump’s outburst follows a warning to Canada on Saturday that it faced 100 percent levies if it signed a trade deal with China, days after backing down from a threat to hit several European countries with measures over their opposition to his grab for Greenland.Still, Seoul’s Kospi continued its run to fresh record highs, with observers pointing to the US president’s history of rowing back the worst of his threats.While carmakers slipped, tech firms ploughed higher with chipmaking giant SK hynix up more than five percent and Samsung Electronics up two percent.There were also big gains in Hong Kong, Shanghai, Sydney, Singapore, Taipei, Manila and Jakarta.Tech firms are enjoying a fresh boost ahead of earnings releases as traders continue to pile into all things AI.Magnificent Seven members Apple, Microsoft, Meta and Tesla are due this week, with other bellwethers including Texas Instruments, Boeing and Mastercard providing an idea about the state of the economy.However, with questions being asked about the amount of cash being invested in artificial intelligence, there is a little nervousness on trading floors about when profits will be realised.”The AI capex cycle is increasingly colliding with the real world: debt markets, power grids, and regulation,” wrote Matt Weller, head of market research at City Index.He added that “2026 capex estimates for the largest ‘hyperscalers’ is widely forecast to hit the $600 bn+ range, driven primarily by AI infrastructure. At the same time, major tech firms have leaned more heavily into debt issuance to fund the infrastructure race”.”This matters for earnings because the market’s attention is moving from ‘who spends the most’ to ‘who can sustain the spend without eroding free cash flow’, especially if AI monetisation takes longer than expected.”Developments in Washington are also being followed after some senators warned they would vote against upcoming spending bills following the second killing of a US citizen in Minneapolis, threatening another possible government shutdown.The dollar remained under pressure after its latest selloff sparked by talk of a joint intervention between US and Japanese authorities to support the yen.And in corporate news, Hong Kong-listed shares in China’s Zijin Gold International rose more than one percent after it agreed to buy Allied Gold, which owns gold mines in Africa, for US$4 billion. Its parent, Zijin Mining Group, soared more than six percent.Zijin Gold’s shares have tripled since listing in September. – Key figures at around 0230 GMT -Tokyo – Nikkei 225: UP 0.3 percent at 53,017.71 (break)Hong Kong – Hang Seng Index: UP 1.3 percent at 27,123.67Shanghai – Composite: UP 0.1 percent at 4,137.56Dollar/yen: UP at 154.26 yen from 153.98 yen on MondayEuro/dollar: DOWN at $1.1877 from $1.1883Pound/dollar: DOWN at $1.3677 from $1.3682Euro/pound: DOWN at 86.84 from 86.85 penceWest Texas Intermediate: DOWN 0.5 percent at $60.35 per barrelBrent North Sea Crude: DOWN 0.6 percent at $65.23 per barrel

Gold prices jumped to fresh records Monday on rising worries about geopolitics, tariff threats and another potential US government shutdown while Wall Street stocks drifted higher ahead earnings from tech giants.The dollar fell, meanwhile, amid speculation of US-Japanese central bank coordination to support the yen. Gold climbed above $5,100 an ounce before retreating a bit as markets react to rising global uncertainty set off by US President Donald Trump’s policies and statements, including threats to impose deep tariffs on China.”It vaulted over the psychologically important 5,000 mark on a glittering streak, heading sharply higher as trade tensions emanating from the US unnerved investors,” said Susannah Streeter, chief investment strategist at Wealth Club.By comparison, gold could be had for just over $2,000 an ounce only two years ago. Silver prices have also spiked to record territory.Shortly after 2000 GMT, gold was at $5,037.14 an ounce.”The relentless quest for hard assets continued amid yet more talk of tariffs and US government shutdowns,” said Neil Wilson, a strategist at Saxo UK.Wall Street stocks enjoyed a benign session, with the S&P 500 finishing up 0.5 percent. Shares of Apple, Microsoft and Facebook won solid gains ahead of earnings later this week, reflecting “a little bit of front running of the idea that (the tech companies) would come in with good results yet again,” said Briefing.com analyst Patrick O’Hare.US investors largely shrugged off a growing furor in the United States over the latest killing of a civilian by Trump’s crackdown in Minnesota over immigration enforcement. Several US senators said they would vote against coming government spending bills after federal agents killed a second American citizen in Minneapolis, significantly increasing the chances of a government shutdown next week.The dollar was weighed down by a surge in the yen on speculation that authorities may intervene to prop up the Japanese currency, but also by limited visibility on the US economy and on inflation.”The FX (foreign exchange) market is front and center at the start of this week and the focus is on the huge move higher in the yen,” said Kathleen Brooks, research director at XTB trading group. “Reports suggest that Japanese officials were joined by the Federal Reserve Bank of New York who bought yen to support the beleaguered currency,” she added.The yen had slid amid worries about Japan’s fiscal position, the central bank’s decision to hold off on interest rate hikes, and expectations that the US Federal Reserve will stay put on the rates front this week.The yen’s rebound weighed on Tokyo’s stock market because of its negative impact on exporters.The US Fed is expected to hold interest rates steady this week despite Trump’s pressure to slash them, which is seen as a threat to its independence, which has traditionally been one of the pillars of US assets’ solidity- Key figures at around 2110 GMT -New York – Dow: UP 0.5 percent at 49,412.40 (close)New York – S&P 500: UP 0.5 percent at 6,950.23 (close)New York – NASDAQ Composite: UP 0.4 percent 23,601.36 (close)London – FTSE 100: UP 0.1 percent at 10,148.85 (close)Paris – CAC 40: DOWN 0.2 percent at 8,131.15 (close)Frankfurt – DAX: UP 0.1 percent at 24,933.08 (close)Tokyo – Nikkei 225: DOWN 1.8 percent at 52,885.25 (close)Hong Kong – Hang Seng Index: UP 0.1 percent at 26,765.52 (closeShanghai – Composite: DOWN 0.1 percent at 4,132.61 (close)Dollar/yen: DOWN at 153.98 yen from 155.70 yen on FridayEuro/dollar: UP at $1.1883 from $1.1828Pound/dollar: UP at $1.3682 from $1.3643Euro/pound: UP at 86.85 from 86.69 penceBrent North Sea Crude: DOWN 0.4 percent at $65.59 per barrelWest Texas Intermediate: DOWN 0.7 percent at $60.63 per barrelburs-jmb/gv

The dollar fell and gold hit fresh high on Monday amid uncertainty over domestic US policies and speculation of US-Japanese coordination to support the yen. Equity markets were mostly lower, with most major European indices in the red after a weak lead from Asia. The price of safe-haven asset gold pushed above $5,100 an ounce after surpassing $5,000 on Sunday, amid rising global uncertainty and turmoil set off by US President Donald Trump’s policies.Silver broke $100 Friday and spiked above $110 Monday.”The relentless quest for hard assets continued amid yet more talk of tariffs and US government shutdowns,” said Neil Wilson, investor strategist at Saxo UK.Multiple US senators have said they would vote against upcoming government spending bills after federal agents killed a second American citizen in Minneapolis, significantly increasing the chances of a government shutdown next week.The dollar was also weighed down by a surge in the yen on speculation that authorities may intervene to prop up the Japanese currency.”The FX (foreign exchange) market is front and centre at the start of this week and the focus is on the huge move higher in the yen,” said Kathleen Brooks, research director at XTB trading group. “Reports suggest that Japanese officials were joined by the Federal Reserve Bank of New York who bought yen to support the beleaguered currency,” she added.The yen has been sliding amid worries about Japan’s fiscal position, the central bank’s decision not to hike interest rates further and expectations that the US Fed will hold off cutting its own borrowing costs this week.Tokyo’s stock market sank 1.8 percent owing to the stronger yen, which weighs on Japanese exporters.The prospect of authorities stepping into financial markets saw the dollar retreat across the board, with the euro, pound and South Korean won also well up while the Singapore dollar hit an 11-year high.The US Federal Reserve is expected to hold interest rates this week, despite Trump’s pressure to slash levels as it guards against threats to its independence.Trump has made no secret of his disdain for Federal Reserve boss Jerome Powell, claiming there is “no inflation” and repeatedly questioning the Fed chair’s competence and integrity.Oil prices extended Friday gains that came after Trump said a US “armada” was heading towards the Gulf and that Washington was watching Iran closely.The president has repeatedly left open the option of new military action against Tehran after Washington backed and joined Israel’s 12-day war in June aimed at degrading Iranian nuclear and ballistic missile programmes.- Key figures at around 1120 GMT -London – FTSE 100: UP 0.1 percent at 10,148.13 pointsParis – CAC 40: DOWN 0.4 percent at 8,112.25Frankfurt – DAX: DOWN 0.4 percent at 24,806.68Tokyo – Nikkei 225: DOWN 1.8 percent at 52,885.25 (close)Hong Kong – Hang Seng Index: UP 0.1 percent at 26,765.52 (close)Shanghai – Composite: DOWN 0.1 percent at 4,132.61 (close)New York – Dow: DOWN 0.6 percent at 49,098.71 (close)Dollar/yen: DOWN at 153.77 yen from 157.00 yen on FridayEuro/dollar: UP at $1.1849 from $1.1823Pound/dollar: UP at $1.3666 from $1.3636Euro/pound: FLAT at 86.70 penceBrent North Sea Crude: UP 0.2 percent at $66.02 per barrelWest Texas Intermediate: UP 0.2 percent at $61.16 per barrel

Hong Kong signed a deal with the Shanghai Gold Exchange on Monday to foster gold trading, and is planning to vastly expand its storage capacity for the safe-haven asset which hit new highs.Gold surpassed a record $5,000 an ounce as investors look for safe places to put their money amid global turbulence and uncertainty driven by US President Donald Trump’s policies.Hong Kong leader John Lee outlined in a speech on Monday his ambitions to build “an international gold trading market and commodities trading ecosystem in Hong Kong”.The deal between the two cities will “set in motion a cross-boundary, trade-clearing system for the precious metal”, Lee said.Hong Kong’s main precious metals depository is at its airport and authorities said in 2024 that it was “nearing its full capacity” of 150 tonnes.The move aims to expand gold storage capacity to 2,000 tonnes within three years and will mark “Hong Kong’s rise as a regional gold reserve hub”, Lee said on Monday.The agreement was signed at the Asian Financial Forum held in Hong Kong, with signatories including chairman of the Shanghai Gold Exchange Yu Wenjian and deputy governor of the People’s Bank of China Zou Lan.The new agreement builds on proposals from Lee’s policy speech last year to establish a government-owned central clearing system for gold in Hong Kong and to expand gold storage facilities.That central clearing system is on track to begin trial operations this year, Hong Kong’s Secretary for Financial Services and the Treasury Christopher Hui said on Monday.

The dollar fell in Asian trade Monday amid speculation US officials could join their Japanese counterparts to help support the yen after a recent sell-off, while equities started the week on a mixed note.Reports that the Federal Reserve Bank of New York had checked in with traders about the yen’s exchange rate sparked a surge in the Japanese currency, according to Bloomberg, pushing it up more than one percent to 153.89 per dollar — its strongest level since November.The yen has been sliding amid worries about Japan’s fiscal position, the central bank’s decision not to hike interest rates further and expectations that the US Fed will hold off cutting its own borrowing costs this week.The last time Japanese authorities stepped in to support their unit was in 2024 when it hit 160 to the greenback.The prospect of authorities stepping into financial markets saw the dollar retreat across the board, with the euro, pound and South Korean won also well up while the Singapore dollar hit an 11-year high.That in turn sent gold prices surging more than two percent and past $5,000 for the first time.Talk of joint intervention was fanned Monday by top currency chief Atsushi Mimura, who said Tokyo “will continue responding appropriately against FX moves, working closely with US authorities as needed, in line with the joint statement issued by the Japanese and US finance ministers last September”.His remarks came a day after Japanese Prime Minister Sanae Takaichi warned: “We will take all necessary measures to address speculative and highly abnormal movements.”Stephen Innes at SPI Asset Management said: “Early Asia saw the dollar pushed lower as rate-check chatter swirled around the Fed, and intervention-tinged language out of Tokyo reminded the market that yen weakness is no longer a free carry.”In thin early Asian liquidity, the yen jumped, and that was enough to knock the broader dollar back into the Asia open.”- Eyes on Fed meeting -Lloyd Chan, at MUFG, added: “The balance of risks may point toward dollar vulnerability and heightened two-way volatility in USD/JPY as markets navigate intervention uncertainty and evolving policy expectations around BoJ policy stance and Japan Prime Minister Takaichi’s fiscal policy.”The weakening dollar helped send gold to a peak of $5,111.07 per ounce. Silver broke $100 Friday and spiked above $109 Monday.The precious metals have been hitting multiple records of late owing to a rush into safe havens by traders spooked by rising geopolitical concerns, including Donald Trump’s intervention in Venezuela and a recent warning to Iran.Strong central bank demand and elevated inflation have added to the mix, along with fresh worries of another US government shutdown.”Over the past few days, gold’s price action has been textbook safe-haven behaviour,” said Fawad Razaqzada, market analyst at Forex.com.”Underlying demand for protection is still there. Confidence in the dollar and bonds look a bit shaky.”The latest developments come ahead of the Fed’s next policy meeting this week, which is expected to see officials stand pat on rates, having cut in the past three.”We don’t expect to learn a lot at the January FOMC meeting. The Fed is on hold but remains data dependent. The balance of risks around the two mandates hasn’t changed much since December,” wrote Bank of America economists, referring to the bank’s goal of keeping a cap on inflation and supporting the jobs market.”Chair Powell’s press conference might be dominated by questions about politics rather than policy. On the latter, however, market pricing creates risks of a dovish surprise.”Trump has made no secret of his disdain for Powell, claiming there is “no inflation” and repeatedly questioning the Fed chair’s competence and integrity.Equity markets struggled after a soft lead from Wall Street on Friday.Tokyo sank 1.8 percent owing to the stronger yen, which weighs on Japanese exporters, while Shanghai, Singapore, Seoul and Manila and Bangkok also retreated.Hong Kong, Taipei and Wellington rose.London opened on the front foot, while Paris fell and Frankfurt was flat.Oil prices extended Friday gains of almost three percent that came after Trump said a US “armada” was heading towards the Gulf and that Washington was watching Iran closely.The president has repeatedly left open the option of new military action against Tehran after Washington backed and joined Israel’s 12-day war in June aimed at degrading Iranian nuclear and ballistic missile programmes.- Key figures at around 0815 GMT -Dollar/yen: DOWN at 154.20 yen from 157.00 yen on FridayEuro/dollar: UP at $1.1845 from $1.1823Pound/dollar: UP at $1.3650 from $1.3636Euro/pound: UP at 86.76 pence from 86.70 penceTokyo – Nikkei 225: DOWN 1.8 percent at 52,885.25 (close)Hong Kong – Hang Seng Index: UP 0.1 percent at 26,765.52 (close)Shanghai – Composite: DOWN 0.1 percent at 4,132.61 (close)London – FTSE 100: UP 0.2 percent at 10,162.02 West Texas Intermediate: UP 0.1 percent at $61.11 per barrelBrent North Sea Crude: UP 0.1 percent at $65.93 per barrelNew York – Dow: DOWN 0.6 percent at 49,098.71 (close)

European Council president Antonio Costa arrived in India on Sunday as the EU and New Delhi seek to seal a free trade pact, capping nearly two decades of negotiations between the economic behemoths.Costa and European Commission president Ursula von der Leyen are chief guests for this year’s Republic Day celebrations in New Delhi on Monday, before an EU-India summit the next day where they hope to shake hands on an accord described as the “mother of all deals”.”The summit will be an opportunity to build on the EU-India strategic partnership and further strengthen collaboration across key policy areas,” the EU Council said on X.India, the world’s most populous nation, is on track to become its fourth-largest economy this year, according to International Monetary Fund projections.The EU eyes India as an important market for the future, while New Delhi sees the European bloc as an important source of much-needed technology and investment to rapidly upscale its infrastructure and create millions of new jobs.”The EU stands to gain the highest level of access ever granted to a trade partner in the traditionally protected Indian market,” von der Leyen said on Sunday, adding that she expected exports to India to double.”We will gain a significant competitive advantage in key industrial and agri-good sectors.”Bilateral trade in goods reached 120 billion euros ($139 billion) in 2024, an increase of nearly 90 percent over the past decade, according to EU figures, with a further 60 billion euros ($69 billion) in trade in services.The pact would be a major win for Brussels and New Delhi as both seek to open up new markets in the face of US tariffs and Chinese export controls.”The EU and India are moving closer together at the time when the rules-based international order is under unprecedented pressure through wars, coercion and economic fragmentation,” Kaja Kallas, the EU’s top diplomat, said on Wednesday. However, ongoing negotiations are focusing on a few sticking points, including the impact of the EU’s carbon border tax on steel exports, according to people familiar with the discussions.New Delhi, which has relied on Moscow for key military hardware for decades, has tried to cut its dependence on Russia in recent years by diversifying imports and pushing its own domestic manufacturing base.Europe is doing the same with regard to the United States.

The race for green energy is on. India, driven by soaring electricity demand and a push to reduce reliance on China, is rapidly producing solar panels, fuelling a booming yet uncertain market.At the Adani Group’s factory in Mundra, in India’s western state of Gujarat, assembly lines churn out photovoltaic panels around the clock.Up to 10,000 a day come off the line, with most sent straight to Khavda, further north, where the Indian conglomerate is finishing what will be the world’s largest solar park.But Adani Solar’s CEO, Muralee Krishnan, says operations are “actually lagging”.”Our capacity needs to be fully used — we should work 48 hours a day.”The intensity is matched by other major producers in the world’s most populous nation.At the Tata conglomerate factory in Tirunelveli, in the southern state of Tamil Nadu, 4,000 mostly women employees also work non-stop shifts.”They operate 24/7, so you get better yield, better efficiency, better productivity,” said Praveer Sinha, CEO of Tata Power.”You cannot stop the production line… there is a rush to produce to maximise the output.”With the twin imperatives of development and lower carbon emissions, India has set itself ambitious renewable energy targets.Last year, it said half its electricity-generation capacity was now “green”, five years ahead of the timeline set in the Paris Agreement on lowering emissions.But 75 percent of electricity is still generated by coal-fired power plants, with inflexible operations and long-term coal power purchase agreements hampering renewable uptake.- ‘Make in India’ -There are signs of change.Last year, coal-fired power generation fell three percent, only the second full-year drop recorded in half a decade, according to the Centre for Research on Energy and Clean Air.Renewable capacity of 230 gigawatts (GW) is set to rise to 500 GW by 2030, including 280 GW of solar.But Prime Minister Narendra Modi has placed another constraint on the industry: “Make in India.”That means there is no question of importing solar panels from China, which supplies 90 percent of the world’s market.All public tenders require “local” production, which India supports with substantial subsidies that have attracted big businesses.Tata, a pioneer in solar panels since the 1990s, has been joined by Adani and Reliance, which have built state-of-the-art, highly automated factories.”The quality of the product is very, very critical,” said Ashish Khanna, CEO Adani Green Energy.”When you are building a project of this size, you also need to be very reassured of the supply chain. We cannot have a disruption or interruption in that particular process.” But for now, the technology and raw materials still come from China.And Beijing has complained to the World Trade Organization over the subsidies and restrictions on its solar panels.The solar push is so intense that Adani is considering silicon mining to secure a key raw material, company insiders say, and there are suggestions Tata Power is eyeing in-house silicon-wafer production.- ‘A huge market’ -Growth in the sector is already staggering, with solar manufacturing capacity expected to soon exceed 125 GW, according to consultancy Wood Mackenzie said.But that is triple current domestic demand, according to Wood Mackenzie analyst Yana Hryshko.Government incentives have “been highly effective in spurring factory announcements, but the industry is now seeing warning signs of rapid overcapacity”, Hryshko said in a report last year.The sector’s long-term sustainability may therefore depend on exports, with some companies already targeting global markets.”Solar is a huge market: the world will see it doubling, from 2,000 GW to 4,000 GW in four years,” said Ashish Khanna, head of the International Solar Alliance. “The question is now — will Indian manufacturers be globally competitive compared to China?” Tejpreet Chopra, from the private power company Bharat Light and Power, points out that “the problem is that it’s cheaper to import from China than to buy local”.And the level of manufacturing in China “is so much higher that it’s very difficult to match”, he added.The sector also faces “geopolitical” headwinds from US President Donald Trump’s tariffs, with Chopra adding that they make it “very difficult to sell to the United States”.Despite these challenges, the head of Tata Power, which does not yet export, remains convinced his business has a bright future.”We strongly believe,” said Praveer Sinha, “that solar will play a very important role in the renewable space of India.”

India and Europe hope to strike the “mother of all deals” when EU chiefs meet Prime Minister Narendra Modi in New Delhi next week, as the two economic behemoths seek to forge closer ties.Facing challenges from China and the United States, India and the European Union have been negotiating a massive free trade pact — and talks, first launched about two decades ago, are nearing the finishing line.”We are on the cusp of a historic trade agreement,” European Commission President Ursula von der Leyen said this week.Von der Leyen and European Council president Antonio Costa will attend Republic Day celebrations Monday before an EU-India summit Tuesday, where they hope to shake hands on the accord.Securing a pact described by India’s Commerce Minister Piyush Goyal as “the mother of all deals”, would be a major win for Brussels and New Delhi as both seek to open up new markets in the face of US tariffs and Chinese export controls.But officials have been eager to stress there is more to it than commerce.”The EU and India are moving closer together at the time when the rules-based international order is under unprecedented pressure through wars, coercion and economic fragmentation,” the EU’s top diplomat, Kaja Kallas said Wednesday. – ‘Untapped potential’ -Russia’s invasion of Ukraine and US President Donald Trump’s punitive tariffs have brought momentum to the relationship between India and the EU, said Praveen Donthi, of the International Crisis Group think tank.”The EU eyes the Indian market and aims to steer a rising power like India away from Russia, while India seeks to diversify its partnerships, doubling down on its strategy of multi-alignment at a time when its relations with the US have taken a downward turn,” he said. The summit will offer Brussels the chance to turn the page after a bruising transatlantic crisis over Greenland — now seemingly defused.Together the EU and India account for about a quarter of the world’s population and GDP.Bilateral trade in goods reached 120 billion euros ($139 billion) in 2024, an increase of nearly 90 percent over the past decade, according to EU figures, with a further 60 billion euros ($69 billion) in trade in services.But both parties are eager to do more. “India still accounts for around only around 2.5 percent of total EU trade in goods, compared with close to 15 percent for China,” an EU official said, adding the figure gave a sense of the “untapped potential” an agreement could unlock.EU makers of cars, machinery and chemicals have much to gain from India lowering entry barriers, said Ignacio Garcia Bercero, an analyst at Brussels think tank Bruegel, who led EU trade talks with New Delhi over a decade ago.”India is one of the most heavily protected economies in the world, with very, very high tariffs, including on many products where the European Union has a competitive advantage,” he told AFP. Its economy in the doldrums, the 27-member EU is also pushing to ease exports of spirits and wines and strengthen intellectual property rules.India — the fastest‑growing major economy in the world — wants easier market access for products such as textiles and pharmaceuticals. – Defence pact -EU officials were tight-lipped about the deal’s contents as negotiations are ongoing.But agriculture, a sensitive topic in both India and Europe, is likely to play a limited role, with New Delhi eager to protect its dairy and grain sectors.Talks are focusing on a few sticking points, including the impact of the EU’s carbon border tax on steel exports and safety and quality standards in the pharmaceutical and automotive sectors, according to people familiar with the discussions. Still EU officials said they were confident negotiations could be concluded in time for the summit. An accord on mobility to facilitate movement for seasonal workers, students, researchers and highly skilled professionals, is also on the menu, alongside a security and defence pact.The latter envisages closer cooperation in areas including maritime security, cybersecurity and counter-terrorism, an EU official said. It is also a “precondition” for the possible joint production of military equipment, said a second EU official. New Delhi, which has relied on Moscow for decades for key military hardware, has tried to cut its dependence on Russia in recent years by diversifying imports and pushing its own domestic manufacturing base. Europe is doing the same vis-a-vis the US. “We’re ready to open a new chapter in EU-India relationships, and really to unlock what we think is the transformative potential of this partnership,” said another EU official. 

Global stocks were subdued and precious metals hit new highs Friday as US President Donald Trump followed up conciliatory comments on Greenland with a fresh warning on Iran.Trump, who on Wednesday backed away from threatened tariffs on Europe over Greenland, told reporters the United States was sending a “massive fleet” toward Iran “just in case.”Gold — a safe-haven asset — pushed closer to a record $5,000 an ounce, while fellow safe haven silver also kept rising, blasting through $102 an ounce amid worries over what Trump may say next, or actually do.The dollar retreated, falling to a four-month low against the euro.Sentiment had calmed over the past two days after the US president pulled back from his threat to hit several European nations with levies because of their opposition to Washington taking over the Danish autonomous territory of Greeland.Trump has repeatedly left open the option of new military action against Iran after Washington backed and joined Israel’s 12-day war in June aimed at degrading Iran’s nuclear and ballistic missile programs.The prospect of immediate American action seemed to recede in recent days, with both sides insisting on giving diplomacy a chance.European markets sought direction in vain, Frankfurt closing just in the green as London and Paris fell on the red side of the line at the end of the week.Wall Street painted a similar picture, with the Dow retreating while the Nasdaq pushed higher. Intel plunged 17 percent after lackluster expectations on the chip maker’s earnings.Asian markets closed higher.- Powell under pressure -Trump’s latest salvo against allies revived trade war fears and uncertainty about US investment, putting downward pressure on the dollar this week.Analysts said there was no guarantee that Europe-US relations had improved durably.The US president’s willingness to threaten tariffs over any issue had rattled confidence on trading floors, boosting safe-haven metals, analysts said.Investors were also preparing for next week’s Federal Reserve meeting following economic data broadly in line with forecasts and after US prosecutors took aim at boss Jerome Powell, which has raised fears over the bank’s independence.The bank is tipped to hold interest rates steady, after cutting them in the previous three meetings.The meeting also comes as Trump considers candidates to replace Powell when the Fed chair’s term comes to an end in May.The Bank of Japan left its key interest rate unchanged ahead of a snap election next week, which could impact government spending plans.After sharp volatility in the wake of the announcement, the yen traded slightly higher.Next week’s US earnings calendar is packed with results from Apple, Microsoft, Boeing, Tesla, Meta and other corporate giants.- Key figures at around 2120 GMT -New York – Dow: DOWN 0.6 percent at 49,098.71 (close)New York – S&P 500: FLAT at 6,915.61 (close)New York – NASDAQ: UP 0.3 percent at 23,501.24 (close)London – FTSE 100: DOWN 0.1 percent at 10,143.44 (close)Paris – CAC 40: DOWN 0.1 percent at 8,143.05 (close)Frankfurt – DAX: UP 0.2 percent at 24,900.71 (close)Tokyo – Nikkei 225: UP 0.3 percent at 53,846.87 (close)Hong Kong – Hang Seng Index: UP 0.5 percent at 26,749.51 (close)Shanghai – Composite: UP 0.3 percent at 4,136.16 (close)Euro/dollar: UP at $1.1823 from $1.1755 on ThursdayPound/dollar: UP at $1.3636 from $1.3501Dollar/yen: DOWN at 157.00 yen from 158.41 yenEuro/pound: DOWN at 86.70 pence from 87.07 penceWest Texas Intermediate: UP 2.9 percent at $61.07 per barrelBrent North Sea Crude: UP 2.8 percent at $65.88 per barrel