Photo by the European Union, Public Domain
President Donald Trump and European Commission President Ursula von der Leyen announced they have reached a trade agreement with tariffs between the United States and the European Union this Sunday, the 27th. The trade agreement will apply tariffs of up to 15% on various goods from the European Union.
With this agreement, the United States and the European Union appear to have avoided a trade war that would have caused several international economic crises. Previously, President Trump had threatened the European Union with tariffs of up to 50% on various goods, which would have increased tensions between the two global powers.
“We agree that the uniform tariff for cars and everything else will be a flat tariff of 15%.” – President Trump.
Von der Leyen announced that the European Union will invest $1T4T600 billion in various sectors in the United States. In addition, the European Union will invest $1T4T150 billion in the U.S. automotive industry.
“I think we hit exactly the target we wanted to find. Balancing but allowing trade on both sides. What means good jobs on both sides of the Atlantic means prosperity on both sides of the Atlantic, and that was important to us.” – President von der Leyen.
Jörn Fleck, senior director of the Atlantic Council at the European Centre, shared the following message in reaction to the trade agreement:
“The United States and Europe appear to have avoided, for now, a self-destructive trade war within the largest and deepest trade and investment relationship the global economy has ever known.”
Tariffs: What's Going to Change?
This trade agreement increases the 10% tariffs that President Trump imposed on the European Union on April 2. Prior to Donald Trump's inauguration earlier this year, the European Union's average tariffs were around 1.2%. As a result, the public can expect an increase in the price of European goods in the United States.
The US market had a marginally positive reaction to this treaty. Dow futures rose 0.31% in 3QT. S&P 500 futures also gained 0.31% in 3QT and Nasdaq futures rose 0.41% in 3QT, according to CNN.
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