Key Takeaways
- South Korea and Germany are navigating intensifying trade tensions with the United States, with South Korea actively pursuing a trade agreement ahead of an August 1 deadline, while German officials express growing skepticism about a swift resolution and prepare for potential countermeasures.
- Iron ore prices have surged past the symbolic $100 per ton mark, hitting four-month highs, fueled by renewed optimism surrounding China's economic policies and increased demand outlook, despite a recent 9.2% year-on-year drop in China's crude steel output in June.
- The Thai Stock Index (SET) increased by 0.9% to reach 1,217.83 points, marking its highest level since May 14, indicating a positive shift in the market.
Global markets are reacting to a mix of escalating trade disputes and robust commodity demand, while regional stock indices show varied performance. Trade negotiations between major economies are at a critical juncture, with significant implications for international commerce and industrial sectors.
South Korea's new Industry Minister, Kim Jung-kwan, has pledged "all-out efforts" to smoothly reach a trade agreement with the United States, aiming for the "best possible" outcome in ongoing tariff negotiations. The deadline for these crucial talks with the Trump administration is August 1. South Korea is particularly focused on minimizing the impact of potential sector-specific tariffs on its vital automobile, steel, and aluminum industries. Previous efforts by Trade Minister Yeo Han-koo also emphasized maximizing "practical interests" and noted that "all possibilities" remained open, including an extension of the tariff pause or a broad agreement in principle. The U.S. had threatened a 25% reciprocal tariff on South Korea, which was paused for 90 days until July 8.
Meanwhile, German officials, who once pushed for a swift trade deal with the U.S., are now reportedly less optimistic about such an agreement being the most probable outcome. This shift comes as U.S. President Donald Trump has threatened to impose a blanket 30% tariff on the European Union from August 1 if no trade deal is reached. German Finance Minister Lars Klingbeil has called for "decisive countermeasures" to protect European jobs and companies should a fair deal prove unattainable. The European Union has already prepared a list of potential retaliatory measures targeting €72 billion in U.S. goods. European Trade Commissioner Maros Sefcovic warned that a 30% tariff would effectively "practically eliminate trade" between the U.S. and the 27-nation bloc.
In the commodities market, iron ore and steel prices have reached four-month highs, driven by a positive demand outlook from China. Iron ore prices surged past $100 per ton in July 2025, marking the first time since May that the key steelmaking ingredient has traded in triple digits. The benchmark August iron ore futures on the Singapore Exchange climbed 3.41% to $99.35 a ton, while the most-traded September iron ore contract on China's Dalian Commodity Exchange rose 3.67% to 763.5 yuan ($106.39) a metric ton. This rally is largely attributed to renewed optimism regarding Chinese economic policies and hopes for new reforms to curb steel supply and introduce further stimulus measures. China's iron ore imports in June increased by 8% from May, reaching 105.95 million metric tons, the highest monthly volume this year. This was supported by miners increasing shipments and stronger-than-expected steel demand, partly due to robust steel exports. However, it's worth noting that China's crude steel output experienced its largest drop in 10 months in June, falling 9.2% year-on-year to 83.2 million tons, making it the weakest first-half production since 2020. The property sector continues to struggle, and steel mills are still reporting losses despite some improvement in margins.
Meanwhile, the Thai Stock Index (SET) saw a positive movement, increasing by 0.9% to close at 1,217.83 points. This marks the index's highest level since May 14. The Thai market had previously experienced a decline, dropping 8.4% in February, amid concerns over a potential trade war and domestic political uncertainties. The market is currently seeking clear positive catalysts to build further momentum.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.