New US tariffs, Trump's Saudi Arabia demand and AI ‘kill switch’
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Hi, I'm Kim Vidal in Whanganui, New Zealand. It's Friday, July 24th. Today. The Trump administration slaps new tariffs on more than 60 trading partners, making sure the president's controversial trade strategy sticks. Washington's nuclear deal with Saudi Arabia comes with a new demand — normalized relations with Israel. Congress acts over fears advanced AI could go rogue. And Ukraine brings the war closer for Russians by targeting people's online shopping. This is Reuters World News, bringing you everything you need to know from the front lines in 10 minutes, seven days a week.
What new global tariffs did the Trump administration announce and who is affected?
A new chapter in US President Donald Trump's global trade war begins today. The administration is slapping new tariffs on 60 trading partners, including the European Union. It's a way around the biggest court defeat of Trump's presidency so far, when the Supreme Court struck down his broad global tariffs that were central to his trade agenda. Trump then put in place new temporary tariffs, which have now expired. Reuters economics correspondent David Lauder says the new tariffs of between 10 and 12 and a half percent mostly keep the status quo. But this is about keeping Trump's overarching trade plan in place.
Trade law experts think these tariffs may have a better chance of surviving court challenges because they're done under a well-tested trade law, Section 301 of the Trade Act of 1974. This was the law that was used to back the Trump tariffs in his first terms against China. Now, Trump did not choose to use it. when he came into office in 2025 because it took longer. You have to go through a whole legal process of investigation and public comment, have public hearings. They've had two sets of public hearings on these forced labor tariffs. They've made some exemptions, made some adjustments to them. So it's a more durable legal process that has taken much longer.
But David says the tariff to and fro is far from over.
The temporary tariffs that were imposed in February, those collected about $31 billion over several months. So that's not an insignificant amount of money. Now, if those... Temporary tariffs, which are subject to core challenge, if they ultimately are struck down, that money will have to get refunded. So there's a lot of moving parts to this, but there's other tariffs coming down the road, other unfair trade practices, actions against the goods from Vietnam, goods potentially from Germany. One big one that industry is watching for is semiconductors.
President Trump is threatening major military punishment for Iran and the Houthis after Yemen's Houthi fighters struck two Saudi oil tankers in the Red Sea. The attacks on a second vital route for global energy shipment sent oil prices surging above $100 a barrel for the first time since May and reignited fears of regional escalation. Those oil prices, as well as disappointing earnings from Alphabet and Tesla, saw Wall Street take a beating Thursday. And the timing couldn't be worse. MorningBid host Elena Casas has more.
So next week, Federal Reserve policymakers meet to set rates in one of the most uncertain meetings in years. A week ago, traders saw just a 12% probability that they might move interest rates. So very little. But that was before the Houthis fired on those Saudi tankers and the price of oil went to over $100 a barrel. Now, new Fed chair Kevin Walsh has been very clear, he's said it repeatedly, that he won't tolerate inflation going up way beyond the 2% target again. and that he is prepared to hike rates. So now the market sees a one in three chance of that happening. Now, bear in mind also that traders are essentially moving in the dark because Walsh wants to reduce the amount of forward guidance that the Fed gives.
In recent years, the market has got really used to the Fed thoroughly telegraphing everything it's going to do in advance. Walsh no longer wants to do that. So the market's stabbing in the dark.
You can catch Morning Bird wherever you get your podcasts. Just one day after announcing a nuclear deal with Saudi Arabia that would allow Riyadh to enrich uranium and build reactors with US technology, President Trump is adding a new condition.
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