The EU and the US have reached a framework trade agreement that sets a blanket 15% tariff on goods traded between them, ending a months-long stand-off.
- Single 15% tariff rate applies across most sectors
- 0% for 0% tariffs on a number of products, including all aircraft and parts, semiconductor equipment, certain chemicals, certain generics, certain agriculture products, natural resources and critical raw materials and more
- work to add more products to list still to be done
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agreement averts the 30% tariff previously threatened by the US administration.
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EU concessions:
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It agreed to not impose retaliatory tariffs.
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It pledged $600 billion in investment in the US, though the timeline and specifics are undefined.
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The EU entered talks seeking a better deal than the 10% tariff the UK accepted in May. After US–Japan talks resulted in a 15% baseline, the EU followed suit. EU officials acknowledged the limited leverage they had compared to the US.
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Trump met with European Commission President Ursula von der Leyen in Scotland.
Trump:
- “This is the biggest one of them all”
- EU will agree to purchase $750 billion of energy
- EU will invest $600 billion more than planned in the U.S.
- tariff rate applying to imports from the EU would be 15%
Von der Leyen:
- 15% would be a ceiling rate
- the same rate applying to cars, pharmaceuticals and semiconductors
- tariff treatment for alcoholic beverages has still to be worked out
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Europe would replace Russian gas with purchases of energy from the U.S. with purchases of $250 billion per year for the rest of Trump’s term
EUR/USD has been marked higher in early FX dealings:
Other news of note:
This article was written by Eamonn Sheridan at investinglive.com.
