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Senate Republicans want to end the EV tax credit before September 30
The U.S. Senate Republicans released a revised budget and tax bill late Friday that would eliminate the $7,500 credit for new electric vehicles and leases as well as $4,000 credit for used EVs by September 30. Prior to the new version, the credit would have been terminated 180 days after it was signed into law for new vehicles, 90 days after that for used vehicles. It would also have been terminated immediately for vehicles that were not assembled in North America or those that met other requirements. The Republicans have targeted EVs in a variety of ways, reversing former president Joe Biden's policies that encouraged the use of electric vehicles and renewable energies to combat climate change and reduce emission. The House of Representatives' version would extend the $7,500 tax credit for new-EVs through 2025 and 2026, respectively, for automakers who have not sold 200,000 electric vehicles before it is eliminated. The Senate bill includes a provision that eliminates fines for failure to comply with the requirements. Corporate Average Fuel Economy rules In a move designed to make it easier for automakers build gas-powered cars. The Republican bill exempts auto loan interest from tax for new cars manufactured in the U.S. until 2028. However, it phases out for individuals making more than $100,000 per year. Senate Republicans Dropped a bid to make the U.S. Postal The bill will scrap thousands of electric cars and charging equipment after a decision by the Senate Parliamentarian. The U.S. The U.S. President Donald Trump This month, a resolution was signed Congress has approved a bill to block California's historic plan to stop selling gasoline-only cars by 2035. This plan was adopted by 11 states, representing one third of the U.S. automobile market. (Reporting and editing by David Shepardson)
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China's flood-hit social security network expands as extreme rainfall takes its toll
China has increased the financial protections offered to segments of the population who are affected by flood control measures during extreme rain, including direct compensation and payment for livestock losses. Diverting floodwaters into areas adjacent to rivers in China is an important step to manage downstream flooding. China, as extreme rainfall increases, is using these areas more and more. Some of them were unused and populated with farms, crops and even residential structures, which has exacerbated social tensions. According to the revised rules for compensation related to flooding diversions, released late Friday, the central governments will now be responsible for 70% of the compensation funds. Local governments are responsible the remainder. The ratio used to be determined based on the actual economic losses of the local governments and their fiscal condition. For the first time, compensation will be paid for livestock and poultry that are unable to be relocated before floodwaters arrive. Prior to this, compensation was only available for the loss of working animal. The summer of 2023 saw almost 1,000,000 people relocated from Hebei, the province that borders Beijing. Record rains forced the authorities to divert water to populated areas to store it. This angered many who were angry about the loss of their homes and farms to save Beijing. China has designated 98 flood diversion zones spanning major rivers basins, including the Yangtze River Basin which is home to one-third of the population. Eight flood storage areas have been used during the Hebei floods of 2023. China Meterological Administration officials told reporters that since the East Asia Monsoon began in early June, the precipitation on the middle and lower Yangtze River has been two to three times greater than normal. They said that in other parts of China the daily rainfall measured at 30 meteorological stations, including Hubei and Guizhou, broke records during June. Guizhou, China, was at the center of China's flood relief efforts this week. One of its cities had been hit by flooding of a magnitude that only happens once every 50 years and with a speed that stunned its 300,000 inhabitants. This prompted Beijing on Thursday to pledge to relocate vulnerable populations and industries into low-flood zones and to allocate more space to flood diversion. (Reporting and editing by Kim Coghill; Ryan Woo)
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Denmark Extends Operating Life of Two Offshore Wind Farms
The Danish Energy Agency (DEA) has extended the production permits for the Nysted and Middelgrunden offshore wind farms, enabling the projects to continue producing electricity for 10 and 25 more years, respectively.These are two of the oldest offshore wind farms in Denmark, now granted an extended lifespan.Middelgrunden was originally granted a production permit in 2000, followed by Nysted three years later.To support its decisions, DEA required, among other things, an independent analysis of the remaining lifespan of the installations. In addition, the owners must perform extended annual maintenance inspections.Nysted Offshore Wind Farm is owned by Ørsted, PensionDanmark, and Stadtwerke Lübeck. It consists of 70 turbines with a production capacity of 161 MW, enough to cover the electricity needs of more than 130,000 households.Middelgrunden, owned by HOFOR and the Middelgrunden Wind Cooperative, is located just 3.5 km off Copenhagen near the Trekroner Fort and has become a familiar part of the cityscape for residents of Copenhagen and North Zealand. Its 20 turbines can supply approximately 20,000 households with green electricity annually.“It’s positive that wind turbines over 20 years old are getting the opportunity to continue producing green electricity for many more years. This primarily benefits the green transition, but it's also a sustainable use of resources that the facilities can continue operating safely and responsibly for a longer period,” said Stig Uffe Pedersen, Deputy Director of the Danish Energy Agency.Earlier in June, DEA also approved a 10-year extension for the Samsø offshore wind farm’s electricity production permit.
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California regulator: California should increase fuel imports and halt margin cap
California's Energy Regulator on Friday suggested new rules that would encourage private investment in fuel imports, and put a hold on the refiner profit limit. The regulator hoped to prevent gasoline prices in California from soaring as the state prepares for the closing of two major refineries. California Energy Commission's recommendations came as a response to Governor Gavin Newsom's letter requesting changes in the state energy transition effort by July 1. California will face higher fuel prices due to the planned closures of Phillips 66's and Valero Energy's refineries. CEC Vice-Chair Siva Gunda admitted that the closure of refineries could increase fuel prices in California. The state already has the highest gasoline prices in the U.S. Gunda said, however, the sticker shock will only be temporary. CEC estimated that gasoline prices would increase 15-30 cents per gallon immediately after the closure of refineries. According to AAA, retail gasoline prices in California averaged $4.61 a gallon on Friday. This is higher than the national $3.21 average. Gunda, CEC's Director, said that the CEC is looking at ways to increase capacity of third-party import terminals, bringing in and distributing more gasoline and jetfuel, while keeping existing refineries operational. In order to help with these efforts, the CEC has recommended that the program which capped the maximum profits refiners could earn from gasoline sales in the State be halted. The CEC said that additional analysis is required to ensure the program works as intended for protecting consumers. The statement said that the pause would last for "a reasonable length of time", but did not specify exactly how long it would be. The CEC asked Newsom to also take steps to stabilise crude oil production within the state. California's crude output has steadily declined from its peak of more than 1 million barrels a day in the middle 1980s to less that 300,000 bpd in last year. This is according to U.S. Government data dating back to 1981.
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Canada's steel manufacturers tell the government that its tariff protection measures for steel are not enough
Two of the Canadian steel industry representatives present at the meeting said that the measures taken by the government to protect the industry against the effects of U.S. Tariffs were insufficient. Steel producers met Patrick Haley, Assistant Deputy Minister for Trade and Finance, and other ministry officials on Thursday. They told them that the measures announced earlier in the month did not protect the steel industry from steel dumping, and could lead to mass layoffs. U.S. president Donald Trump raised import duties on aluminum and steel to 50%, up from 25% in the beginning of this month. Canada is the largest metals seller to the United States. Canada responded by announcing a series of measures including new tariff-rate quotes of 100% of the 2024 levels for imports of steel from non-free-trade agreement partners. At the meeting, representatives of the industry asked the government to extend the tariff quotas for unfair trade practices to all countries that have free trade agreements. They said that Europe and Asia are diverting their goods to Canada in order to avoid U.S. Tariffs, which makes domestic steel uncompetitive. Catherine Cobden is the President and CEO of Canadian Steel Producers Association. She said, "We do not think that the measures announced will meet our needs in this difficult time." Cobden was present at the meeting on Thursday with officials from the finance ministry. In a separate press release on Thursday, the Canadian Steel Producers Association stated that in its current format, the tariff-rate quota would do little to help its industry. The Canadian Steel Producers Association said that since March's first U.S. Tariffs, Canada's steel sector has lost 1,000 workers. More layoffs are possible, according to the association. Keanin Looomis, President of the Canadian Institute of Steel Construction (which includes steel fabricators and constructors), said that Thursday's meeting of the government was heavily focused on steel producers, pointing out that finished steel imported into Canada has no tariff protection. Loomis was also present at the meeting. The Canadian Finance Ministry responded to in a text message that its measures were a comprehensive, strategic package for the protection of producers and workers and a first step. Mark Carney, the Prime Minister of Canada, has threatened to increase the counter-tariffs for U.S. steel and aluminum in case Canada fails to reach a wider trade agreement with Trump by 21 July. Trump abruptly ended trade talks with Canada on Friday over its new tax that targets U.S. tech firms. These are temporary, calibrated measures which could be extended depending on the results of the ongoing talks with the United States. A spokesperson for the Finance Minister said that we are ready to adapt our response as necessary.
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China's rare Earths are flowing freely again, but at a price
Chinese rare earth magnets are now flowing into the automotive supply chain, reducing the threat of mass closures. However, automakers and suppliers still say that production plans face uncertainty and there is a risk of shortages. Nils Poel is the head of market affairs for supplier association CLEPA. He said that European suppliers received enough licenses to prevent widespread disruptions earlier this month. However, hundreds of permits are still pending. He said that the rate of issuance has "accelerated" from 25% to 60%, but in cases where end users are located in the United States or products are transported through a third country like India, it takes longer or is not given priority. He said that he felt that production would probably continue in July, and the impact of the shutdown will be manageable. "We have managed to avoid that at the moment. Ford CEO Jim Farley stated on Friday during an event in Colorado that, due to magnet shortages over the last three weeks, the company had been forced to close factories. He did not elaborate. Volkswagen stated in a press release that its supply of rare-earth components is stable, while Stellantis claimed to have addressed immediate production concerns. In April, China restricted the export of magnets and rare earths as a form of retaliation against U.S. Tariffs. There is still a lot of uncertainty three months after the U.S. tariffs about how China intends to enforce its complex and opaque export licensing system. Since the restrictions, exports of rare earth magnets from China are down by about 75%. This has forced some automakers to stop production in Asia, Europe, and the United States. From 'Full Panic' to 'Bare Minimum': The White House announced on Thursday that it had signed an agreement with China for the speeding up of rare earth approvals, without giving any details. Beijing announced that both parties confirmed the details of the agreement struck in London in early this month to resolve the issue with rare earths. It would then process export licenses according to the law. The existing system of export licenses was not altered by either party. In an interview with Fox Business Network, U.S. Treasury secretary Scott Bessent stated that under the agreement announced Thursday, rare earths shipments from China to the United States would be banned. еание All companies who have received them regularly in the past. Bessent stated, "I'm confident that the magnets are going to flow." "This is de-escalation." According to a senior executive from a major U.S. auto supplier and an expert in the supply chain of a major European carmaker, the situation is less tense now than it was two weeks ago. The two declined to be identified due to the sensitive nature of the matter. Unnamed European official said that China approves the "bare minimal" of licenses critical to European firms in order to prevent production stops. Kash Mishra, CEO of Dexter Magnetic Technologies in the U.S., said that only five licenses have been issued to this magnet manufacturer since April. These were for sectors other than defence. He said, "It is a long delay." It takes 45 days to complete the paperwork for the supplier and another 45 days before the licence is granted. (Reporting from Christina Amann, Giulio Pieovaccari, Laurie Chen, Beijing, and Vidyarajagopal, with additional reporting by Kalea, Hall, Guillaume, Nick Carey, London, and Kalea in Ann Arbor; editing by Jason Neely).
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DeepSeek banned from Apple and Google app stores in Germany
Apple and Google have been asked to remove DeepSeek, a Chinese AI startup, from their German app stores due to data privacy concerns. This follows similar actions elsewhere. In a Friday statement, Meike Kamp stated that she made this request because DeepSeek transfers personal data of users illegally to China. She added that the two U.S. technology giants will now have to review the request and decide if they want to block the app on German soil. Her office hasn't set a specific timeframe. Google confirmed that it received the notification and is reviewing it. DeepSeek has not responded to an inquiry for comment. Apple did not respond to a request for comment immediately. DeepSeek's privacy policy states that it stores a variety of personal information, including requests for its AI program or uploaded files on computers in China. Kamp stated that "DeepSeek was unable to provide my agency convincing evidence that German user's data in China is protected to a similar level to that of the European Union." She added that "Chinese authorities enjoy extensive access rights to data on individuals within the influence sphere of Chinese companies." She said that she made the decision because DeepSeek had refused to comply with the EU's requirements on non-EU data transfer or voluntarily remove its app in May. She added that DeepSeek had not complied with her request. DeepSeek shocked the tech world in January when it claimed to have developed an AI model that rivaled those of U.S. companies such as ChatGPT creator OpenAI, at a much lower price. Its data security policies have been scrutinized in the United States of America and Europe. Italy banned it earlier this year from their app stores, citing the lack of information about its use of data. The Netherlands also prohibited it for government devices. The Belgian government has advised officials to refrain from using DeepSeek. A government spokesperson stated that "further analyses" are being conducted to assess the approach to follow. In Spain, in February, the consumer group OCU requested that the data protection agency of the government investigate the possible threats posed by DeepSeek. However, no ban was enacted. The British government stated that "the use DeepSeek is a choice made by the public." A spokesperson for the British technology ministry stated that "we continue to monitor all national security threats from all sources to UK citizens, and their data." We will take all necessary steps to safeguard our national security if we receive evidence of threats. U.S. legislators plan to introduce legislation that will ban U.S. agencies from using AI models developed by China. Exclusively reported this week, DeepSeek aids China's intelligence and military operations. Hakan Ersen and Miranda Murray reported by Charlotte van Campenhout and David Latona. Alistair Smout contributed additional reporting from London. Matthias Williams wrote the article. Mark Potter, Louise Heavens, and Mark Potter edited it.
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In Pakistan, a flash flood has killed nine people as it sweeps away a family group
Officials said that at least nine members of one extended family were killed when floodwaters washed away children from a river in the north of Pakistan, and their relatives tried to save them by jumping into the water on Friday. District administrator Shehzad Mahaboob revealed that the family was having a picnic by the Swat river and the children had been taking pictures in the water when the flash flood struck. He added that relatives rushed to help but were overwhelmed by a monsoon deluge. Mahboob said it was too early to know how many children or adults died. He said that nine bodies had been recovered. Four family members are still missing, while four others were rescued. Shahid Ali Khan, the local mayor, said that a family group was on a visit to the beautiful and mountainous Swat Valley. Rescue official Shah Fahad stated that locals and over 80 rescue workers are searching for survivors. They went to take selfies. At that time, there was little water. The floodwaters swept the children away. It looked as if a dyke was breached, said a family member who refused to give his name on TV. Residents reported that victims had to wait more than two-hours for rescue services. Shiraz Khan, a local eyewitness and local resident, said that the two-hour cry for help was accompanied by screams and cries. He said that by the time the police and rescue personnel arrived, four people were already swept away. The current was so strong, even the rescuers found it difficult to get into the water. The provincial government has suspended several officials from the administrative and rescue services for their negligence. Later, the Provincial Disaster Management Authority issued an alert warning of high flood levels. Every year, during the summer, tens of thousands, mostly from the rest of Pakistan, travel to the north of Pakistan's peaks. In a press release, the office of Prime Minister Shehbaz sharif said that Sharif had "expressed his sorrow over the deaths of tourists." (Reporting and writing by Mushtaq Al; editing by Andrew Heavens, Hugh Lawson and Asif Shahzad)
Dollar slips, shares cautious as trade concerns persist
The dollar hovered around a 6-week low on Tuesday as the erratic U.S. policies of trade clouded the market's sentiment. Investors also took a defensive stance ahead of important developments in the coming week.
The White House announced on Monday that U.S. president Donald Trump and Chinese President Xi Jinping would likely speak this week. This comes after Trump had accused Beijing of breaking an agreement to reduce tariffs and trade barriers.
Markets will closely monitor the call between the leaders, as tensions in trade between the two world's largest economies continue to simmer due to tariffs.
Data released on Monday revealed that U.S. manufacturers contracted for the third consecutive month in May, and that suppliers were taking longer than ever to deliver inputs due to tariffs.
A private sector survey released on Tuesday showed that China's factory activities in May were also down for the first eight-month period. This indicates that U.S. Tariffs are beginning to affect manufacturers.
U.S. Futures fell, failing to maintain the gains made overnight on Wall Street during the cash session.
Nasdaq and S&P futures both fell by about 0.5%. The STOXX 600 fell by 0.45% in Europe while London's blue chip FTSE 100 dropped by 0.36%.
Matt Simpson, City Index's senior analyst and market strategist, said that Trump has the sentiment of the country in his palms once more.
He said that he expected to hear Trump and Xi talk about a "really great call" or something to that effect.
We'll have to wait until China confirms, as they tend to be slow on this matter. Price action may be unstable until we receive concrete confirmation. We also need to consider the June 4, deadline for "best trade deals" from U.S. Trading Partners.
The Trump Administration wants all countries to submit their best offers on trade negotiations before Wednesday. Officials are trying to speed up talks with several partners in order to meet a deadline they set themselves of five weeks.
PAYROLLS ON DECK
The dollar dropped to its lowest level in six weeks against a basket currency early on Tuesday. This was ahead of U.S. data on job openings later that day, and the U.S. nonfarm employment figures on Friday, which will provide a timely read on the state of the U.S. economic health.
The Federal Reserve could ease policy again if unemployment increases, for example, despite investors' largely giving up on any cut in this month or the next.
The Treasury market would benefit from a softer U.S. employment report. 30-year yields are still flirting with the 5% mark as investors continue to demand higher premiums to offset the growing supply of debt.
This week, the Senate will begin considering a tax and spending bill that would add $3.8 trillion (approximately) to the $36.2 trillion federal debt.
The dollar index closed the session marginally higher, at 98.89. This was a slight improvement from its earlier losses.
After the Swiss inflation rate fell to zero in May, the currency rose to 0.8181 Swiss Francs. This was the first time in more than four-years that consumer prices had fallen. The Swiss National Bank is now under pressure to reduce its interest rates by a large amount later in the month.
Kenneth Broux is the head of corporate FX and rates research at Societe Generale.
Broux explained that if countries like Switzerland, where the inflation rate is falling and the differentials between rates are increasing, this could prompt an intervention to reduce the depreciation and appreciation of the Franc.
A currency's value will usually increase if the rates in its home country are higher than elsewhere.
The euro reached a six-week high before falling to $1.1416 on the day, while sterling fell 0.2% to 1.3525.
Data released on Tuesday showed that euro zone inflation fell below the European Central Bank target in December, confirming expectations of another rate cut this coming week.
Brent crude futures rose 0.34% to 64.885 per barrel while U.S. Crude gained 0.46% at $62.81 a barrel.
Spot gold fell from its four-week high to $3,361 per ounce.
(source: Reuters)