European governments and companies reacted with a mix of relief and concern on Monday (July 28th) to the framework trade agreement reached with US President Donald Trump. They acknowledged what they considered an unbalanced deal, but managed to avoid a deeper trade war.
The agreement announced Sunday between the two countries, which account for nearly a third of global trade, will see the US impose 15% import tariffs on most EU goods – half the threatened tariffs, but much higher than Europe had hoped.
However, many specific details of the deal remain unknown. "While awaiting the full details of the new EU-US trade agreement, one thing is clear: this is a moment of relief, but not celebration," Belgian Prime Minister Bart De Wever wrote in X.
"Tariffs will increase in some areas and several key questions remain unresolved." Trump said the deal, which includes investment pledges that go beyond the $550 billion deal signed with Japan last week, would broaden ties between the two transatlantic powers after years of what he called unfair treatment of US exporters.
The deal would provide clarity for European automakers, aircraft manufacturers, and chemical manufacturers. However, the EU had initially hoped for a zero-for-zero tariff deal. The 15% base tariff, while an increase from the threatened 30% tariff, is comparable to the average US import tariff of about 2.5% last year before Trump returned to the White House.
European Commission President Von der Leyen, who described Trump as a tough negotiator, told reporters on Sunday that it was "the best we could get." European stocks opened higher on Monday, with the STOXX 600 hitting a four-month high and all other major bourses also in the green. Technology and healthcare stocks led the gains.
"The 15% rate is better than the market had feared," said Jefferies economist Mohit Kumar. German Chancellor Friedrich Merz welcomed the deal, saying it averted a trade conflict that could have had a devastating impact on Germany's export-oriented economy and its large automotive sector. (alg)
Source: Reuters
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