Good morning, friends. We’re starting the week strong with an issue packed with debt, shipping, and trade updates from across the region. But first, an update on the US-EU trade escalation…

THE BIG LOGISTICS STORY- US reignites trade frictions with EU: US President Donald Trump has announced plans to slap a 50% tariff on all goods imported from the EU into the US starting 9 July. The deadline represents a postponement from an earlier threat from the weekend to impose the tariffs as soon as 1 June after a call from European Commission President Ursula von der Leyen in which she requested an extension.

Trump has again accused the EU of taking advantage of the US, claiming that the discussions with the bloc are “going nowhere,” The Guardian reported on Friday, citing a post from Trump on Truth Social.

IN CONTEXT- The Trump administration reportedly turned down an updated EU trade agreement last week. The proposal reportedly pitched a gradual reduction of tariffs to zero on industrial products and select agricultural goods, and cooperation on data centers, while addressing US concerns on international labor rights, environmental standards, and economic security. Strategic purchases of AI chips were also included as well as cooperation on 5G and connectivity tech.

EU Red lines: The EU is reportedly holding the line at regulatory and tax rule independence, one EU official told Bloomberg. The US has previously pointed fingers at the bloc’s value-added tax, which the EU said is out of scope for trade negotiations since it applies to both EU and non-EU goods.

This story grabbed a lot of ink in int’l press: Associated Press | Reuters | Bloomberg | CNBC | CNN | The Washington Post | BBC | The Guardian

WATCH THIS SPACE-

#1- EGX-listed multinational Ajwa Group for Food Industries is planning to take control of Saudi logistics firm Atco by acquiring a 70% stake through a share swap, the company’s CEO Ahmed Tarek told Asharq Business in an interview. Ajwa is set to open branches in the Kingdom within the next few months, Tarek said. There’s no publicly available information about the transaction’s timeline, or the fair value of Atco.

Not Ajwa’s first logistics venture in the Kingdom: Ajwa already owns Saudi-based Ajwa Port Services, and acquiring Atco is likely to achieve operational and cost synergies, giving the buyer a stronger hold in the Saudi market.

ICYMI- Last year, Tarek — then not CEO — sought to raise his stake in Ajwa to 25%, up from8.6%. The move came as Tarek along with other shareholders led a push to dismiss the company’s board of directors and vote for a new one, citing earnings that do not reflect the company’s potential. Tarek was appointed CEO last March.

#2- Bahrain is in talks with Russia over a possible three-year LNG supply agreement that will see the Gulf country import 1.5 mn tons of LNG annually via 20 cargo deliveries, a source familiar with the matter told Reuters on Friday. The LNG is expected to come from Russia’s Yamal LNG plant in which refining firm Novatek has a majority stake. The talks are at an advanced stage and the agreement is expected to conclude soon, the source said, but no timeline has been disclosed.

REMEMBER- Bahrain was reportedly set on increasing its LNG imports in preparation for gas shortage and demand spike amid summer months — making it the latest GCC country to start importing LNG. The Seapeak LNG terminal in Bahrain was supposed to receive the country’s first-ever LNG shipment in April — with French oil giant TotalEnergies supplying the commissioned cargo.

#3- DP World launched construction works tender for a new GBP 72 mn container storage yard at its London Gateway Terminal, according to a UK government statement released last week. Construction on the yard — set to be located at the fifth berth at the port — is slated to begin in December this year and is scheduled for completion in June 2027. Firms have until 16 June to submit their bids.

Big plans for the hub: DP World aims for London Gateway to have the biggest container port in the UK in terms of trade volumes within the next five years. The firm committed GBP 1 bn (c. USD 1.3 bn) in investments for the port. DP World opened its first all-electric berth at London Gateway — berth four — which increased port capacity by more than a third in November.

#4- Egypt and Germany agreed to “support efforts” to establish a German Industrial Zone within the Suez Canal Economic Zone (SCZone), according to a ministry statement issued last week. The announcement came following a meeting between Investment Minister Hassan El Khatib and German Economy Minister Katherina Reiche during the Arab-German Economic Forum.

We’re still in the dark about what this proposed zone could look like, with the Egyptian side yet to elaborate on the proposal and the German side not having publicly acknowledged it yet. A source familiar with the discussions confirmed to EnterpriseAM that the project was proposed, but emphasized that no concrete commitments were made.

There’s a good chance that the proposal will remain just that — a proposal: While national industrial zones make sense for more state-led economies like China and Russia, the pull is not as strong for the more globalized and liberal market-based economy of Germany and its companies, our source told us. But what does make sense for German companies looking to set up shop in Egypt are industrial clusters, where companies are put together based not on national origin, but on complementary activities that can share infrastructure and feed each other inputs, we were told.

MARKET WATCH-

#1- Oil prices saw a slight uptick this morning after the US agreed to postpone EU tariffs, Reuters reports. Brent crude futures were up USD 0.26 to reach USD 65.04 a barrel, while the US West Texas Intermediate (WTI) increased by USD 0.24 to hit USD 61.77 a barrel by 04.33 GMT.

ALSO– Opec+ is expected to approve a further 411k barrels a day (bbl / d) increase for July at its June meeting. Accelerated hikes are likely through October, with a plan to unwind 2.2 mn bbl / d of voluntary cuts by November unless quota violators like Iraq and Kazakhstan improve compliance. Opec+ is still holding back nearly 5 mn bbl / d from the market, with many of these cuts set to stay through 2026. Although the group originally planned to phase out 2.2 mn bbl / d of voluntary cuts by September 2026, an accelerated timeline was agreed on in April.

#2- Baltic index dips once again: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — fell0.1% to 1,340 points on Friday. The capesize index inched up 1% to 1,990 points, while the panamax index decreased 1.8% to 1,246 points. The smaller supramax index slipped three points to 983.

#3- The Drewry World Container Index fell by 2% to USD 2,276 per 40-ft container on Thursday, according to the latest index readings. Spot rates for 40-ft containers are 78% below the previous pandemic peak, but remain 60% above the pre-pandemic rate of USD 1.4k. The average composite index YTD is USD 2,723 per 40ft container, which is USD 174 lower than the 10-year average rate of USD 2,897.

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CIRCLE YOUR CALENDAR-

Egypt will host the Propak MENA from Monday, 2 June to Wednesday, 4 June in Cairo. The event will feature solutions, talks and workshops for F&B and consumer goods manufacturers to source global packaging, processing and logistic solutions.

Turkey will host the Eurasia Rail from Wednesday, 18 June to Thursday, 19 June in Istanbul. The event will host 7.7k visitors interested in Turkey’s railway sector or are railway technology buyers, and will feature engineering, products and services from both private and public sectors.

Check out our full calendar at the bottom of this email for a comprehensive listing of upcoming news events and news triggers.

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