The EU and the US have agreed to a trade deal, which includes a 15% tariff on most imports from Europe. The move has been welcomed by some as an end to the “will they, won’t they” speculation that dominated the spring and summer.
However, experts say that the long-term impact of the deal is uncertain and could be detrimental to both the US and EU economies. The unequal terms of the agreement suggest that the EU prioritized its short-term economic health over a longer-term arm-wrestling with the US.
Jan-Paul van de Kerke, a senior economist at ABN Amro, stated that “the uneven trade deal seems to be largely caused by Europe’s bad hand” due to subpar economic performance and inflation concerns. The EU is also dependent on the US for its security and remains a net importer of energy.
The deal includes a 15% tariff on most US goods imports from the EU, including cars and computer chips, but there are zero tariffs on aerospace parts, some chemicals, and raw materials. The EU will agree to buy $750 billion in US energy over three years.
While investors have welcomed the trade deal, experts warn that the extra US tariffs could hurt both economies. The deal is seen as asymmetric, with the US getting away with a substantial increase in its tariffs on imports from the EU and securing further concessions.
In France, Prime Minister François Bayrou described the EU’s trade deal with the US as “submission,” criticizing what he saw as a lack of strength in negotiations. Hungarian Prime Minister Viktor Orbán also expressed disappointment with the deal, calling it worse than what the UK managed to secure.
The reaction from European leaders is mixed, with some welcoming the deal and others expressing concerns about its long-term impact. The global stock markets have rallied after the announcement, but experts say that investors should be cautious in their assessment of the agreement.
Source: https://www.theguardian.com/business/live/2025/jul/28/stock-markets-eu-us-trade-deal-15-tariffs-donald-trump-scotland-ftse-100-dollar-euro-business-live