US and EU reportedly nearing 15% tariff deal

Good morning. Here's what happened overnight and what you need to know today.

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1.

Tariff talk: The EU and the US are closing in on a trade deal that would impose a 15% baseline tariff on most EU exports, financial media reported citing unnamed diplomats and officials familiar with the talks. The proposed agreement would mirror the accord announced a day earlier between the US and Japan and would head off US President Donald Trump’s threat to raise duties to 30% from 1 August. EU officials are pushing for the 15% rate to cover sectors including cars, while imports of steel and aluminium above a certain quota would face a 50% tariff, one of the diplomats told Bloomberg. The deal may include exemptions for aircraft, spirits, medical devices and other products, FT sources said. The talks remain fluid and any agreement is yet to be signed off by Trump, whose ultimate decision is difficult to predict. A US official told Bloomberg an announcement was not expected imminently. (Capital Brief)(FT)(Bloomberg)(WSJ)

2.

Market mania: Wall Street extended its record-breaking rally as the US sealed a trade deal with Japan and talks with the EU gained momentum, while a resurgence in meme stocks added to market exuberance ahead of earnings from Alphabet and Tesla after the US bell. The deal with Japan includes a 15% tariff on autos, down from 27.5%, and European officials are reportedly optimistic about a similar framework. Retail traders piled into stocks including GoPro and Krispy Kreme, though gains later pared. Tesla is expected to post its biggest quarterly revenue drop in over a decade, while Alphabet is set to report results with Wall Street projecting a 10.9% revenue increase and 15% EPS growth. Energy equipment company GE Vernova surged 13% after raising forecasts, while Texas Instruments tumbled on a weaker profit outlook and tariff-related uncertainty. (Capital Brief)(Reuters)(Bloomberg)

3.

Trump’s AI: The Trump administration released a 23-page AI Action Plan to loosen regulations and expand energy supply to accelerate AI development and promote American technological dominance. It recommends rolling back rules that hinder adoption, fast-tracking data centre construction by streamlining environmental standards, and prioritising federal contracts for AI models deemed free from ideological bias. The guidelines call on the government to remove references to misinformation, diversity, equity and climate change from risk frameworks and to only contract with developers whose AI models are deemed "from top-down ideological bias.” It threatens to limit federal funding based on states' AI regulatory regimes, and directs agencies to help export full-stack AI packages to allies. The plan includes proposals to “prioritise the interconnection of reliable, dispatchable power” embracing nuclear and geothermal energy. Released days after the administration eased export restrictions on Nvidia and AMD chips as part of trade negotiations with China, the plan replaces Biden-era safeguards with an industry-friendly approach, rejecting European-style AI regulation. (Capital Brief) (White House)(AI Action Plan)

4.

SharePoint panic: The number of known organisations breached in an ongoing cyber-espionage campaign exploiting Microsoft’s SharePoint server software has surged to about 400, up from roughly 60 just days ago, according to Dutch cybersecurity firm Eye Security. Most of the known victims so far are in the US, followed by Mauritius, Jordan, South Africa and the Netherlands, according to the firm. Eye Security says the real number is likely higher. The vulnerability allows hackers to steal keys that can let them impersonate users or services, potentially enabling deep access into networks. Victims include the National Institutes of Health and the National Nuclear Security Administration. Microsoft and Google say Chinese hackers are among those exploiting the flaw, though China has denied the accusation. “China opposes and fights hacking activities in accordance with the law. At the same time, we oppose smears and attacks against China under the excuse of cybersecurity issues,” Chinese Foreign Ministry spokesman Guo Jiakun said. (Bloomberg)(Reuters)

5.

NRF therapy: The Albanese government directed the National Reconstruction Fund Corporation to deliver $1 billion in zero-interest loans to businesses hit by market disruptions, as part of the Economic Resilience Program announced by Prime Minister Anthony Albanese in April. The program was initially conceived around President Trump’s 10 % tariff on Australian exports and will operate under broader eligibility criteria than the NRFC’s existing mandate, chief executive David Gall confirmed. The $1 billion allocation will come from within the NRFC’s existing $15 billion fund and offers no financial return, unlike the NRFC’s commercial investments that target returns of up to 3% above benchmark rates. Industry Minister Tim Ayres and Finance Minister Katy Gallagher have instructed the NRFC to prioritise national interest and long-term strategic outcomes over short-term financial returns, and to meet an investment target of $1.5 billion for this financial year, more than triple its cumulative investment to date. (Capital Brief)

6.

Exit loop: Private equity firms made record use of continuation funds to cash out investors by selling assets to themselves in the first half of 2025, according to a report by Jefferies. The tactic accounted for USD41 billion of sales, as buyout groups struggled to find external buyers or list holdings. That was equivalent to a record 19% of all industry exits and 60% higher than a year ago, The Financial Times reported citing the investment bank’s numbers. Firms including Vista Equity Partners, New Mountain Capital and Inflexion used multibillion dollar continuation funds to sell down some of their largest investments. The secondary market for fund stakes rose nearly 50% to more than USD100 billion, but a Bain & Co report showed almost two-thirds of investors still prefer conventional exits. (FT)

7.

Labor’s roundtables: The Albanese government is holding a series of industry-specific roundtables in the lead-up to next month’s economic reform summit, which will lay the platform for Treasurer Jim Chalmers to deliver a broader reform package in the government’s second term. Sources told Capital Brief invitations have been issued to major companies including Microsoft and key industry groups such as the Business Council of Australia and the Council of Small Business Organisations Australia. Roundtables will be led by ministers including Tim Ayres, Anne Aly, Katy Gallagher and Madeleine King, with attendees from government bodies, company leaders, think tanks, unions, researchers and professional organisations. Submissions have called for tax reform, digital engagement incentives and changes to regulation to support small businesses and boost productivity. (Capital Brief)

8.

Defamation suit: French President Emmanuel Macron and his wife Brigitte took US influencer Candace Owens to court, escalating their fight against widely circulated false claims about the first lady’s identity. According to media reports citing court documents, the Macrons filed a defamation lawsuit in Delaware Superior Court, centred on Owens’ claim that Brigitte “is in fact a man”. The Financial Times reports the 218-page complaint accuses Owens of publishing “outlandish, defamatory, and far-fetched fictions”, including that Brigitte was born male under the name of her older brother, Jean-Michel Trogneux. Owens, a conservative activist with millions of followers on Instagram and YouTube, is married to former Parler CEO George Farmer. The case focuses on Becoming Brigitte, an eight-part series Owens released this year, along with related content. The Macrons allege “relentless bullying” and a “campaign of global humiliation”. They are seeking unspecified damages. (Capital Brief)(FT)(Reuters)