Patrick L. Young, Chairman & Founder of Exchange Invest, joins Remy Blaire to discuss the recent trade developments between the U.S. and Europe, highlighted by President Trump’s announcement of a sweeping trade deal that imposes 15% tariffs on most European goods.
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President Trump and European Commission President Ursula von der Leyen have announced a sweeping trade deal imposing 15% tariffs on most European goods, and US and Chinese negotiators meeting in Stockholm to work toward a trade deal ahead of an August 12th deadline, aiming to avoid a new round of tariffs.
Trump also saying this morning that the US will announce pharma tariffs.
The very near future.
Well joining me as we kick off the trading week is Patrick L.
Young, chairman and founder of Exchange Invest.
Patrick, good morning.
Thank you so much for joining us.
Well, the lack of detail in the Trump VDL deal could affect trade moving forward.
So first and foremost, what impact will the new 15% tariffs have on US consumers as well as European companies?
Well, clearly there's got to be an issue.
Are people going to be buying San Pellegrino or Perrier, or are they going to be going for Poland Springs?
So there's bound to be some degree of people deciding they're going to go for the best priced option.
At the same time, given the fact that a lot of European goods have traditionally been very heavy luxury goods, we're thinking here of Hermes handbags and all of the other LVMH products, etc.
Obviously they may be less price sensitive to what happens in the near future, but actually looking at this at the macro, what is this?
This is the ultimate demonstration of what we've been talking about for a long time, which is the decline of the European Union, the impotence of the European Union, and the strength of the president in what amounts to, like him or not, Trump world.
Yeah, and those are some adjectives that we've been hearing since that deal has been struck over the weekend.
But when we take a look at what the central banks are doing, we know that Trump has cited the ECB and their rate cuts as a reason for why Powell should cut.
And this week the Fed Reserve meets for the July meeting and while no change is expected in terms of rates, what do you expect to see moving forward and what are the implications here?
Look, I think it's going to be an interesting situation because suddenly if we see an incredible volterface by the Fed immediately this week, everybody is going to say the chairman of the Federal Reserve has been compromised by Trump.
So we're probably likely to see olive branches suggesting that the Fed is looking up, things are looking slightly better.
Overall, the trade picture looks to be improving.
Those sorts of messages, possibly a little bit of money market operations, but no real rate cuts per se, because of course the Truth is, the reason, and here Trump is being a classic politician when he says these things, the reason Europe's cutting rates is because they don't understand economic growth and they don't know how to get it anymore.
The United States of America does economic growth, which is why over the course of the last 15 years, as I will never tell, sorry, tired of telling you on a Monday morning, remember, the European Union's barely grown by 9% in 15 years.
The economy of the USA has grown by something like 89%.
Yeah, and Patrick, speaking of economic growth, US and China negotiators are meeting in Stockholm and we also have Trump meeting with Starmer in Scotland right now.
So what do you expect from that uh both of those gatherings?
OK, very interesting.
In Stockholm, we've heard some rumors.
There's been talk.
The South China Morning Post suggesting that there might even be a delay in the imposition of tariffs if China and the US can manage to show negotiating momentum.
Clearly China is now in a position where it really has to get a move on in agreeing to US terms because suddenly it's exposed with the European Union having caved in and given Trump a very, very lavish deal.
In the other meeting that's happening today where Mr.
Starmer is the late.
As leader to travel up to the northern Scottish entrepot of Trump world.
What's going to happen?
Well, ultimately Trump owns Starmer.
That's the end of it.
Keir Starmer is already a discredited politician.
He's got a huge majority in parliament, but he's actually a disaster area as a prime minister.
He's just managed to negotiate a deal with the European Union, which looks shambolic compared to what Trump came away with.
He doesn't have the same degree of impetus or power.
Ultimately Trump knows that and therefore, Trump's going to be able to use that to push around Starmer, which is going to be very upsetting for the Labor Party base because they are particularly pro-Hamas and pro all sorts of other things such as the green movement about which Trump has been exhibiting great great degrees of skepticism overnight, for example, about the wind towers that he sees as nothing more than an obscene view breaker on the 18th hole of his golf resort.
Yeah, a lot of topics, not just regarding trade but also politics and geopolitics as well.
So Patrick, always great speaking with you as we kick off a new trading week.
So thank you so much for your insight.