U.S. to levy 25% tariff on Brazil, after 301 investigation; Many airlines hit hard by jet fuel price swings, not all can hedge, IATA says

U.S. to levy 25% tariff on Brazil, after 301 investigation

The administration of President Donald Trump on June 1 said it would impose a 25% percent tariff on a broad range of Brazilian imports, after concluding an investigation conducted under Section 301 of the Trade Act of 1974. The investigation concluded that Brazil had engaged in unfair practices that imposed burdens on American businesses, reports The New York Times. 

Section 301 authorizes the United States to impose tariffs and other penalties in response to unfair foreign trade practices. 

In a news release, the United States Trade Representative, Jamieson Greer, said the investigation found that Brazil had failed to adequately enforce intellectual property rights and had not taken sufficient measures to combat corruption and bribery. The administration also cited Brazil’s restrictions on access to its ethanol market, and what it described as inadequate enforcement of anti-deforestation laws.  

OECD warns of long-lasting global economic damage from Iran war

Under a “prolonged disruption” scenario in which war in the Middle East continues into 2027, the OECD predicts global growth will slow from 3.4% in 2025 to 2.1% in 2026, and 1.8% in 2027. This will leave “a lasting mark on many countries, especially in Asia, Europe and developing economies most vulnerable to the energy and food price shock,” the global policy forum said in its latest Economic Outlook, released June 3.

“The evolving conflict in the Middle East has become the dominant force shaping global economic prospects, prompting an energy shock that is driving inflationary pressures and is projected to have adverse impacts on growth, the report said.

The OECD (Organisation for Economic Co-operation and Development) presents two potential scenarios for resolution of the U.S.-Israel conflict with Iran. The first is a time-limited disruption scenario, in which a lasting peace deal is reached soon, and energy production and trade in the Gulf economies progressively return to pre-conflict levels starting mid-2026, leading to a gradual unwinding of the disruptions. In that case, global growth is projected to fall from 3.4% in 2025 to 2.8% in 2026 before picking up to 3.1% in 2027.

Iran claims to have targeted a second MSC ship

Iranian media reports that the Islamic Revolutionary Guard Corps have targeted a second MSC vessel.

Iran’s Tasmin News Agency reported following the US firing a Hellfire missile at the engine room of the VLCC Lexie on 2 June it had targeted the MSC Panaya with navy missiles. It described the vessel as belonging to the “American Zionist” enemy which Iran has called MSC in previous attacks on its vessels.

The MSC Panaya is currently berthed in Khalifa Bin Salman port in Bahrain, according to AIS data from Pole Star Global, and the attack has not been confirmed.

Many airlines hit hard by jet fuel price swings, not all can hedge, IATA says

Many airlines have been hit hard by price swings in the jet fuel market, and some are not in a position to hedge their exposure, the International Air Transport Association's head of fuel said on Wednesday.

Some airlines with more elaborate hedging strategies get a bit of a cushion, Daniel Chereau told the S&P Global Energy Middle East Petroleum and Gas Conference. However, the impact of soaring jet fuel refinery profit margins, known as crack spreads, has not been helpful for the airline industry, he added.

In North West Europe, the jet fuel crack spread peaked at an all-time high of over $121 per barrel in March, according to LSEG data, compared with around $30 per barrel before the outbreak of the Iran war in late February.

US tariff doubling cut EU steel exports by 34%, steel body says

The Trump administration's trade agency said on Wednesday it will kick off the first of three negotiating rounds with Mexico this week to revamp the North American trade agreement, but made no mention of any talks with Canada. 

The U.S. Trade Representative's office said in a statement that Deputy U.S. Trade Representative Jeffrey Goettman will lead bilateral talks in Mexico City on Thursday and Friday focused on "economic security and rules of origin for key industrial goods."