The US and the EU Have Reached a Trade Deal
After months of negotiations, the United States and the European Union have concluded an important trade agreement. It will affect not only the automotive industry but also other sectors and has already positively impacted global stock markets. This deal occurred shortly after the US reached a similar agreement with Japan on tariffs.
Ahead of the meeting with the head of the European Commission, Ursula von der Leyen, President Donald Trump threatened the EU with increased tariffs. However, the parties agreed on a single rate of 15% for most goods from Europe. This will reduce the impact of the previous tariffs of 27.5% that were in effect earlier.
“I believe this is the biggest deal in history,” Trump told reporters.
Deal Details
According to the agreement, the EU has committed to purchasing $750 billion worth of oil, gas, nuclear fuel, and semiconductors from the US over three years. Europe will also invest $600 billion in the US, including the purchase of military equipment. Additionally, duties on aircraft, their components, chemicals, semiconductor equipment, and some agricultural goods will be abolished.
Outstanding Issues
However, the 50-percent tariffs on steel and aluminum remain in force. They might be replaced with quotas, but this issue still requires discussion. The EU has also agreed to reduce non-tariff barriers for automobiles and some agricultural products, but the details are still being coordinated.
Although the 15% tariffs are significantly better than Trump’s threat to impose 30%, they are still higher than the average level of 4.8% that was in effect before he returned to office. This deal could mark the beginning of a new era in trade relations between the two economic giants, but its ultimate impact will depend on further negotiations and the implementation of the agreements.