New EU-US Trade Agreement Finalized with 15% Tariff on Goods
A new EU-US trade agreement has been finalized, imposing a 15% tariff on goods and promising significant investment and energy purchases from the EU.
- • 15% tariff set on most EU goods including cars, while excluding steel and aluminum.
- • EU commits to invest $600 billion in the US and purchase $750 billion worth of energy.
- • The agreement aims to provide stability and predictability amid prior tariff threats.
- • Critics argue the deal appears imbalanced in favor of the US.
Key details
In a pivotal announcement, President Ursula von der Leyen of the European Commission and US President Donald Trump have finalized a significant trade agreement during their meeting in Scotland, establishing a 15% tariff on most goods, including cars, imported from the European Union (EU) to the United States. This deal is heralded as the largest trade pact between the two economies and is aimed at enhancing economic stability amidst a backdrop of previous tariff threats, which had reached as high as 50%.
The agreement notably includes a commitment from the EU to invest an additional $600 billion in the US and purchase $750 billion worth of energy over the coming years, essential for reducing dependency on Russian energy sources. As the EU seeks to bolster energy security, purchases will focus on liquefied natural gas (LNG) and nuclear fuel. Additionally, the deal outlines mutual zero tariffs on select strategic items—such as aircraft and semiconductors—further streamlining trade relations.
However, the imposition of a 15% tariff marks a setback from the current scenario before the agreement, which had relatively lower tariffs. Analysts, such as Heidi Schauman from Danske Bank, expressed relief that the uncertainty surrounding tariffs could now be addressed, allowing companies to plan strategically. "We have lived in great uncertainty for many months, which has caused both consumers and companies to hesitate in their plans," she noted. Despite expressing optimism about adaptation, she also raised concerns regarding the reliability of agreements made by Trump, hinting at possible future uncertainties.
Critics of the deal, including Felicia Åkerman from Dagens Nyheter, argue that the agreement might unfairly benefit the USA, but specific terms and compensatory measures have yet to be fully disclosed. This highlights ongoing debates regarding the balance of benefits stemming from this agreement. The finalized deal is now subject to approval from EU member states, marking a crucial step in transatlantic trade relations as negotiations continue to refine the intricate details of this landmark agreement, expected to impact both markets significantly.