Trade agreement reached between the EU and US, preventing further escalation of tariffs
EU-US Trade Deal Reached: A Closer Look
The United States and the European Union have reached a landmark trade agreement, marking a significant step towards increased economic cooperation between the two global powers. The deal, which covers a broad range of goods, aims to bring stability and predictability to the transatlantic trade relationship.
The agreement sets a new baseline tariff ceiling of 15% on nearly all EU goods entering the US where reciprocal tariffs exist. This applies explicitly to cars and car parts, as well as potential future tariffs on pharmaceuticals and semiconductors. However, tariffs of 50% remain in place on EU exports of steel, aluminum, and copper to the US, with tariff rate quotas established at historic levels to manage these tariffs and ensure fair global competition.
The deal includes tariff exemptions and efforts to address non-tariff barriers on food and agricultural products, including streamlining sanitary certificate requirements for US pork and dairy products entering the EU market. The EU has also committed to purchasing an additional $750 billion (€638 billion) worth of energy from the US over three years and investing $600 billion by 2029 in various sectors in the US, which supports trade openness.
The agreement addresses digital trade barriers, with commitments from the EU to refrain from network usage fees and maintain zero customs duties on electronic transmissions. It also includes provisions covering the sectors of semiconductors and pharmaceuticals, with intentions for cooperation to reduce barriers.
The 15% tariff rate for automobiles and other goods between the US and EU is the same as the one announced with Japan earlier this week. However, the tariff rate of 15% will not apply to steel and aluminum, which are being taxed at 50%.
The trade deal needs to be approved by all 27 member states of the EU. If approved, it will prevent the 30% tariffs that former President Trump had threatened on all goods from the EU on July 12.
German Chancellor Friedrich Merz welcomed the trade deal following the announcement, while European Commission President, Ursula von der Leyen, stated that the deal will bring stability and predictability. The deal, however, does not contain any decision regarding the spirits sector.
The agreement is expected to contribute to Europe's energy security and the European Union has also agreed to make additional investments of $600 billion. The purchases of US energy products are likely to be a significant boost for the US energy sector.
In summary, the trade deal maintains a 15% tariff ceiling on automobiles, semiconductors, pharmaceuticals, and many other goods but preserves high tariffs on key raw materials such as steel, aluminum, and copper, with quota mechanisms to manage those tariffs. It also emphasizes reducing non-tariff barriers in agriculture and digital trade and commits to large cross-investment and energy purchase agreements.
- The conducted EU-US trade negotiations resulted in a landmark agreement that aims to establish a more stable and predictable relationship in the world of trade.
- The deal involves a new tariff ceiling of 15% on various EU goods entering the US, while higher tariffs of 50% remain on steel, aluminum, and copper exports.
- The agreement includes commitments regarding digital trade, reducing non-tariff barriers, and promoting investment in sectors like semiconductors and pharmaceuticals, all part of the broader European and American business landscape.
- The EU has pledged to invest $600 billion by 2029 and purchase an additional $750 billion worth of energy from the US over the next three years, which could significantly strengthen the US economy and energy sector.
- Politicians from both sides have generally supported the deal, but the agreement doesn't include any policy-and-legislation specifically related to the spirits sector, leaving it open for future discussions and potential decisions in the realm of general news.
