Evening Brief, Friday 24 July

Yemen’s Houthis claimed attacks on two Saudi oil tankers in the Red Sea after declaring a blockade of Saudi ports, while Saudi state media confirmed a tanker fire and a British maritime body corroborated the incident. The United States then launched fresh strikes on Iranian military targets, saying it sought to reduce threats to commercial shipping, as Iranian state media reported hits around Ahvaz, Bandar Abbas and Qeshm.

The strategic problem is brutally simple. Bab el-Mandeb connects the Red Sea to the Gulf of Aden, and about 12% of world trade and a quarter of container traffic passes through it. Saudi Aramco has offered extra crude cargoes from Egypt’s Mediterranean port of Sidi Kerir, a sign that exporters are already looking for ways around the risk.

The Black Sea added its own warning light. A Liberian-flagged bulk carrier carrying American coal to Ukraine reported damage inside Romania’s Exclusive Economic Zone, with Romanian officials saying a maritime drone or sea mine may have caused the breach, though they have not attributed responsibility. Romania also scrambled aircraft and issued alerts after Russian drones struck targets in Ukraine near the Danube border. The danger now lies less in one dramatic closure than in insurers, captains and oil traders deciding that too many routes have become maybes.

The Trump administration replaced an expiring temporary 10% global tariff with new duties of 10% or 12.5% on imports from 60 trading partners, covering 99.4% of American imports. The White House anchored the move in Section 301 of the Trade Act of 1974 after the Supreme Court struck down an earlier tariff regime, and it exempted oil, gas, fertilisers, some food products, steel, aluminium, cars and certain USMCA goods.

The structure rewards countries that have forced-labour import bans with the lower rate, though Washington still says enforcement falls short. The European Union, Canada, Britain, India and Mexico fall into that lower group, while China, Australia, Brazil and others face the higher tier, with some bilateral carve-outs still muddying the picture for Japan and South Korea.

The backlash came quickly. European officials said they had honoured last year’s transatlantic trade understanding, Australia and Brazil called the duties unjustified, and Canada argued that a labour-rights problem should be handled with allies rather than through a midnight tariff floor. The trade risk is not just higher prices, but a world in which human-rights language becomes another lever for permanent, adjustable protection.

France ordered the total evacuation of the Cap Ferret peninsula as fires on the Atlantic coast forced 63,000 people to move across the wider region. The main blaze near Lège-Cap-Ferret burned 10,000 hectares, damaged 80 buildings and destroyed 50, while a second fire near Biscarrosse consumed 2,500 hectares and forced thousands more from campsites and a children’s summer camp.

France activated the European Union civil-protection mechanism, drawing aircraft and helicopters from Croatia, Portugal, the Czech Republic and Slovakia. Around 1,500 firefighters battled the Cap Ferret blaze, and 700 worked the Biscarrosse fire, as officials tried to keep a single evacuation road from becoming another hazard.

Spain faced its own emergency. The government declared a national wildfire emergency near Madrid and Ávila, putting coordination under central authority after fires threatened several communities and forced around 10,000 people to evacuate. Meteorologists warned of extraordinary danger as temperatures reached 44C in some regions, while heavy spring growth had dried into fuel under summer heat.

The fires also exposed an awkward tourism problem. Holiday economies sell pine shade, sea breezes and mountain roads, but those same landscapes can become evacuation puzzles when heat, wind and dry vegetation align. The summer season now asks governments to manage visitors as carefully as flames.

The European Commission fined Google €890m under the Digital Markets Act, splitting the penalty between Google Search and the Play Store. Brussels said the company favoured its own shopping, hotel, transport and sports services in search results, and restricted app developers from steering users toward cheaper purchase channels outside Google’s store.

Google has 60 days to comply or face periodic payments of up to 5% of global turnover. The company pushed back, warned that compliance could reduce some real-time tools and safety protections, and left open the option of a legal challenge. The Commission said it would also monitor how Google applies the decision to AI Overviews and AI Mode, which matters because search is no longer just a list of blue links.

Washington reacted as if the fine were trade policy by other means. Jamieson Greer, the US trade representative, said the decision drove trade uncertainty, adding friction just as the United States was imposing fresh tariffs on much of the world. Europe sees gatekeeper regulation as market plumbing; America increasingly sees it as a tax on its national champions. The case will define how much room Europe has to police digital markets when every big platform fight risks becoming a trade fight.

Poland’s right fractured in public after Jarosław Kaczyński’s loyalty deadline expired and Mateusz Morawiecki said 40 MPs, one senator and three MEPs stood with him. The dispute grew out of the Rozwój Plus association and a pledge that PiS members had to sign, while Kaczyński said roughly 30 MPs had placed themselves outside the party.

Germany offered a tidier official script but a messier backstage. Friedrich Merz moved Nina Warken to the chancellery, named Carsten Linnemann health minister and sent Thorsten Frei to lead the CDU/CSU parliamentary group, yet the transport portfolio stalled after the presumed successor withdrew by text message for family reasons. The episode left Patrick Schnieder still in office and Merz’s authority looking more improvisational than commanding.

India’s government opened talks with leaders of the Cockroach Janta Party after activist Sonam Wangchuk ended a 26-day hunger strike over exam paper leaks and student deaths. Narendra Modi promised fast-track courts and a draft law, while protesters kept demanding the education minister’s resignation, protection from criminal cases and compensation for bereaved families.

These are different systems under different pressures, but the pattern rhymes. Leaders who rely on discipline, process and prestige are discovering that deadlines, reshuffles and late-night concessions can also advertise weakness.

Volkswagen reported a 32.9% fall in second-quarter net profit to €1.54bn, cut its full-year revenue forecast and put as many as 50,000 additional jobs under review worldwide. The pain concentrated in China, where quarterly sales fell by more than a third to 424,300 vehicles, while worldwide deliveries dropped nearly 9% to 2.08m.

The cuts will not be easy. Volkswagen’s supervisory board rejected the latest proposals in an initial session, and Lower Saxony, employee representatives and IG Metall hold enough influence to make any German plant decision political as well as commercial. Further talks are due in September, which gives management time to count savings and labour time to count votes.

SAP told a different German story. Its second-quarter cloud revenue rose 24% at constant currencies to €6.28bn, and its cloud backlog reached €22.93bn, calming fears that generic AI tools would eat into its software business. Yet operating profit missed forecasts and management trimmed its 2026 profit outlook because of acquisition costs and investment in artificial intelligence.

Germany’s corporate split is becoming clearer. The old industrial champion must shrink around a lost China cushion, while the software champion must prove that AI strengthens its tollbooth rather than opening a free road around it.