Week 30: This week, trade diplomacy and market sentiment took centre stage. While global economies show signs of resilience, policy uncertainty continues to weigh on growth forecasts. In Luxembourg, infrastructure and credit outlooks remain solid, even as momentum slows. Let’s dive in.

U.S. and EU clinch trade deal with 15% tariff to avert trade war

The United States and the European Union recently finalised a landmark trade framework terminating a looming tariff escalation. Included is a 15% import tariff on most EU goods, down from the previously threatened 30% rate. Certain strategic items—such as aircraft parts, specific chemicals, semiconductors, and generic drugs—will benefit from zero‑tariff provisions. The agreement also features $600 billion in EU investments in the U.S., alongside $750 billion in future energy purchases. Purchased military equipment and corporate certainty are expected to support markets, though approval from EU legislators and member states remains pending.

Source: Reuters

EU economies show resilience despite tariff fears

Recent PMI surveys reveal that, despite trade uncertainties, major economies in the U.S., Europe, and parts of Asia continue to expand. The U.S. PMI rose to 54.6 in July, while the eurozone output remains steady despite softening export orders. The data suggests business activity remains robust, although inflation pressures are building. Growth momentum varies across regions, but overall, the global economy has weathered recent tariff headwinds.

Source: WSJ

Japan and U.S. strike deal easing auto tariffs, equities surge

Japan and the U.S. agreed to lower threatened auto tariffs from 25 % to 15 %, alongside a $550 billion investment package. Japanese equities rallied—led by autos and industry—with the Nikkei up around 3.5 %. The deal also lifted pressure on the Bank of Japan’s policy stance and strengthened the yen. Analysts caution the gains may be short‑lived, highlighting broader wage stagnation and export competition.

Source: Reuters

Luxembourgish News July 2025

Luxembourg keeps AAA credit rating, growth forecast trimmed

S&P reaffirmed Luxembourg’s AAA credit rating with a stable outlook this week, despite lowering its GDP growth forecast for 2025 to just 1 %, down from 2.4 %. Weaker global trade conditions drove the revision, heightened geopolitical uncertainty, and financial sector volatility. The rating agency emphasised that while fundamentals remain solid, external risks are weighing on growth.

Source: Investing

PreZero opens new medical waste treatment facility, ends export dependence

PreZero Luxembourg inaugurated its first in‑country medical waste treatment plant, eliminating the need to export hospital waste. The facility enhances domestic environmental resilience and lowers long‑term disposal costs. This shift is expected to streamline healthcare logistics and reduce cross‑border ecological risks. It also reflects Luxembourg's push towards greater sustainability in public infrastructure.

Source: Chronicle.lu

Global and Luxembourgish News July 2025