Mexico, EU Sign Stalled Trade Deal as they Aim to Diversify from US

22 May 2026, Mexico, Mexico City: EU Council President Antonio Costa, Mexico's President Claudia Sheinbaum and EU Comission President Ursula von der Leyen are pictured holding the trade agreement at the presidential palace. Photo: Felix Marquez/dpa
22 May 2026, Mexico, Mexico City: EU Council President Antonio Costa, Mexico's President Claudia Sheinbaum and EU Comission President Ursula von der Leyen are pictured holding the trade agreement at the presidential palace. Photo: Felix Marquez/dpa
TT

Mexico, EU Sign Stalled Trade Deal as they Aim to Diversify from US

22 May 2026, Mexico, Mexico City: EU Council President Antonio Costa, Mexico's President Claudia Sheinbaum and EU Comission President Ursula von der Leyen are pictured holding the trade agreement at the presidential palace. Photo: Felix Marquez/dpa
22 May 2026, Mexico, Mexico City: EU Council President Antonio Costa, Mexico's President Claudia Sheinbaum and EU Comission President Ursula von der Leyen are pictured holding the trade agreement at the presidential palace. Photo: Felix Marquez/dpa

Mexico and the European Union signed a long-stalled free trade agreement on Friday as they seek to decrease dependence on the US and partially insulate themselves from US President Donald Trump's tariffs.

The accord, which they reached broad agreement on in 2025 but have delayed signing, expands a Mexico-EU trade accord from 2000, which covered only industrial goods. The new pact adds services, government procurement, digital trade, investment and farm produce.

Mexico's President Claudia Sheinbaum, European Commission President Ursula von der Leyen and European Council President Antonio Costa signed the deal in Mexico City in their first summit in ⁠over a decade.

"This ⁠agreement is a true geopolitical statement," Costa said on Friday, shortly after signing the agreement. "With the modernized global agreement, we are better prepared to face the challenges of our time."

"This agreement opens up enormous opportunities for both regions, allowing for expanded trade," Sheinbaum said, highlighting the pharmaceutical industry, agriculture, technological development and electric mobility.

Both sides want to diversify their exports away from the US.

The EU was hit with sweeping new duties in Trump’s “Liberation Day” tariffs in April 2025 and ⁠prepared countermeasures, though these were paused as both sides sought talks. While tensions eased somewhat with a tariff truce and a July deal, US tariffs on EU exports remain elevated.

Mexico has also been hit with stiff US tariffs on automotive, steel and aluminum exports, and trade relations between the two countries have been volatile throughout Trump's second term.

According to Reuters, Mexico's economy ministry estimates the new agreement could increase Mexican exports to the EU from around $24 billion a year to $36 billion by 2030. The EU exports around $65 billion in goods annually to Mexico.

Trade between Mexico and the EU has increased 75% in a decade, dominated by transport equipment, machinery, chemicals, fuels and mining products.

The new deal provides duty-free access for almost all goods including farm products such ⁠as Mexican chicken and ⁠asparagus and European milk powder, cheese and pork, albeit with some quotas.

While the updated trade deal has been ready, it has taken over a year to sign.

The EU prioritized a free-trade agreement with the South American bloc Mercosur and it concluded free-trade negotiations with Indonesia, India and Australia in the past eight months.

Mexico, meanwhile, has been cautious about taking steps that could anger the Trump administration during sensitive negotiations to extend the US-Mexico-Canada trade pact. More than 80% of Mexico's exports currently go to the US.

In the EU, the trade deal will be voted on by the European Parliament, which is likely to approve it within a few months.

"The goal here is very simple: we want to create more jobs and more value on both sides of the Atlantic," von der Leyen said. "This agreement gives us great wings to fly very high."



Saudi Inflation Holds Steady at 1.8% Despite Global Commodity Market Turmoil

A grocery store in Saudi Arabia (SPA)
A grocery store in Saudi Arabia (SPA)
TT

Saudi Inflation Holds Steady at 1.8% Despite Global Commodity Market Turmoil

A grocery store in Saudi Arabia (SPA)
A grocery store in Saudi Arabia (SPA)

Saudi Arabia’s inflation remained subdued in July at 1.8% year on year, reflecting continued overall price stability despite housing and rents remaining the main source of inflationary pressure.

Data released Thursday by the General Authority for Statistics (GASTAT) showed prices for housing, water, electricity, gas and other fuels rose 4.2%, driven by a 4.3% increase in actual housing rents. Food and beverages increased 1.5%, while transport rose 1.4%.

The figures show that inflation remains concentrated in a limited number of categories rather than reflecting broad-based price increases. Saudi Arabia is among the G20 economies with relatively low inflation.

King Abdulaziz University economics professor Salem Baajajah told Asharq Al-Awsat that the 1.8% rate was “a positive reading for the economy, particularly given continuing global inflationary pressures.”

Increases are concentrated largely in housing and rents rather than spreading across the consumer basket, he said.

Economist Ahmed Al-Shahri cautioned that the figure should not be viewed as evidence that price pressures had disappeared, particularly with continued housing demand in major cities.

“The challenge in the coming period will not only be controlling overall inflation, but ensuring that pressures in the housing sector do not develop into a broader wave extending to other spending categories,” he stated.

Housing was the largest driver of inflation in July. Personal care, social protection and miscellaneous goods and services rose 2.9%, driven by an 11.1% increase in other personal effects, while jewelry and watch prices rose 12%. Recreation, sport and culture increased 2.4%.

By contrast, furnishings, household equipment and routine household maintenance declined 0.5%, while clothing and footwear fell 0.4%, helping contain overall inflationary pressures.

Food and beverages contributed 0.3 percentage point to overall inflation, while transport and personal care, social protection and miscellaneous goods and services each contributed 0.2 percentage point.

On a monthly basis, consumer prices rose 0.2% in July from June. Housing, water, electricity, gas and other fuels increased 0.9%, driven by a 7.1% rise in electricity, gas and other fuels. Restaurants and accommodation services rose 0.5%, recreation, sport and culture 0.4%, and transport 0.2%.


Oil Rises after US Threatens Indefinite Blockade of Iran

Gas prices are seen listed as motorists make their way durig the evening commute in Monterey Park, California, on August 13, 2026. (Photo by Frederic J. BROWN / AFP)
Gas prices are seen listed as motorists make their way durig the evening commute in Monterey Park, California, on August 13, 2026. (Photo by Frederic J. BROWN / AFP)
TT

Oil Rises after US Threatens Indefinite Blockade of Iran

Gas prices are seen listed as motorists make their way durig the evening commute in Monterey Park, California, on August 13, 2026. (Photo by Frederic J. BROWN / AFP)
Gas prices are seen listed as motorists make their way durig the evening commute in Monterey Park, California, on August 13, 2026. (Photo by Frederic J. BROWN / AFP)

Oil prices gained on Friday after the United States threatened an indefinite naval blockade of Iran, reviving concerns about supply of crude after the previous session's fall on a weaker outlook for demand and a large build in US stocks.

Brent futures rose 90 cents, or 1.03%, to $87.97 a barrel by 0653 GMT, while US West Texas Intermediate (WTI) crude futures rose 91 cents to $82.16 a barrel, Reuters reported.

The benchmarks were on track for weekly rises of about 4% after the prior session's fall of more than 2%, paring gains following Brent's six-session rally and a five-session rise for WTI.

"Despite the bearish crude stock data, the ⁠broader geopolitical backdrop is ⁠preventing a sharper price decline," Susan Bell, senior vice president for oil commodity markets at Rystad Energy said in a note.

On Thursday, the United States warned that it could maintain a naval blockade of Iran indefinitely and ramp up economic pressure on Tehran as ceasefire talks have stalled.

"Watch this space for more announcements coming next week because we are going to apply ⁠measures like have never been seen in the history of economic isolation of a country," Treasury Secretary Scott Bessent told Newsmax's "Rob Schmitt Tonight" program in an interview.

The latest US threats come as Iran curbs flows through the Strait of Hormuz, which carried 20% of the world’s oil before the conflict, driving up fuel prices and putting pressure on President Donald Trump to end a war that is unpopular at home.

The strait is "under the management and control of the Islamic Republic", however, the recently appointed head of Iran's Basj paramilitary unit, Hossein Taeb, has said, according to the semi-official Fars ⁠news.

The prospect ⁠of a longer war hitting supply was offset this week by forecasts from OPEC and the International Energy Agency lowering outlooks for demand growth, while data showed the largest weekly gain in US crude stocks for more than 3-1/2-years.

Two vessels from the state-owned Abu Dhabi National Oil Company were attacked transiting the Strait of Hormuz on Thursday, said UAE state news agency WAM, an incident the United Arab Emirates government condemned as an Iranian attack.

Elsewhere, Russian authorities quickly cleared up damage on Friday after a fire at the Baltic Sea port of Ust-Luga, a major hub for oil exports, was triggered by a Ukrainian drone attack, regional governor Alexander Drozdenko said.


Diesel Prices Overtake Jet Fuel in Europe as Global Shortage Widens

Petrol prices are displayed at a filling station, as the price of oil and gas has surged amid the conflict in the Middle East, in London, Britain, March 5, 2026 REUTERS/Jack Taylor
Petrol prices are displayed at a filling station, as the price of oil and gas has surged amid the conflict in the Middle East, in London, Britain, March 5, 2026 REUTERS/Jack Taylor
TT

Diesel Prices Overtake Jet Fuel in Europe as Global Shortage Widens

Petrol prices are displayed at a filling station, as the price of oil and gas has surged amid the conflict in the Middle East, in London, Britain, March 5, 2026 REUTERS/Jack Taylor
Petrol prices are displayed at a filling station, as the price of oil and gas has surged amid the conflict in the Middle East, in London, Britain, March 5, 2026 REUTERS/Jack Taylor

Diesel cargoes are costing more than jet fuel in Europe for the first time in more than a year, LSEG data showed, as the continent replaces lower Middle East air fuel shipments with other sources of supply, but struggles to secure more diesel for industry and agriculture.

Europe has been able to pull in jet cargoes from the US and other countries like Nigeria as prices surged after the start of the Iran war, which disrupted crude and fuel supply. Global diesel supply tightened even further when Russia banned exports amid Ukrainian attacks on its refineries.

"We see a higher risk of persistent scarcity pricing in diesel than in crude heading into winter," analysts at Goldman Sachs said in a note.

Europe boosted imports of jet fuel to 750,000 barrels per day in June — the highest since October 2025 — and a similar rate in July from 612,000 bpd in January, according to Kpler.

By contrast, European diesel imports have dropped to 1.56 million bpd in July from 1.97 million bpd in January. Against that backdrop, the price of diesel overtook that of jet fuel this week, LSEG data showed.

Diesel prices have resumed their rally in recent weeks amid an impasse in Iran peace talks and Russian export disruptions, and are now only 14% below their April peaks. Jet fuel prices, which have also risen in recent weeks, are meanwhile 25% below their March records.

"A brief period of cautious optimism for refined product markets has been quickly overtaken by renewed hostilities in the Strait of Hormuz, the collapse of Russian product supply and a diesel exports ban," said Karim Fawaz of S&P Global Energy.

WEAKENING JET DEMAND LIKELY WEIGHS ON PRICES, ANALYST SAYS

In a further sign of jet's relative weakness, it has dropped against the price of gasoil futures - the benchmark against which it is priced in Europe.

The price assessment of a jet cargo coming into Europe stood at a discount of $24 a metric ton to gasoil futures on August 10, according to LSEG.

This is the widest discount since July 2025, according to LSEG and Argus Media. At the height of the Iran war in March, LSEG and Argus assessed jet's premium at more than $500 a barrel. Weakening jet demand after the summer travel seasonal high and the expectation of higher European imports are likely weighing on prices, said Jay Maroo, analyst at Sparta Commodities.