US and EU agree on 15% tariff deal to prevent trade war
The deal, announced by US President Donald Trump and European Commission President Ursula von der Leyen, includes $600 billion in EU investments in the US and increased purchases of American energy and military equipment.
Trump hailed the agreement as 'the biggest deal ever made,' while von der Leyen described it as a stabilizing force for global trade.
The 15% tariff is significantly lower than the threatened 30% rate, offering relief to European exporters.
However, US steel and aluminium tariffs remain at 50%, though discussions on reducing them are ongoing.
The deal mirrors a recent US-Japan trade agreement but leaves some details unresolved, including tariffs on spirits.
German Chancellor Friedrich Merz welcomed the agreement, noting it prevents severe economic disruption for Germany's auto industry.
However, critics argue the deal favors the US, with EU investments potentially coming at the bloc's expense.
The euro strengthened slightly following the announcement, reflecting market optimism.
The agreement covers key sectors like automobiles, pharmaceuticals, and semiconductors, though specifics on certain products remain under negotiation.
Trump emphasized the deal's benefits for US industries, while von der Leyen highlighted its role in ensuring predictability in transatlantic trade.
The agreement marks a significant step in Trump's broader trade strategy, though challenges remain in finalizing details. - AFP
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
27 minutes ago
- The Star
S&P, Nasdaq again close at record highs, trade choppy
A street sign for Wall Street is seen outside the New York Stock Exchange in Manhattan, New York City NEW YORK: The S&P 500 edged higher to eke out a record high close for a sixth straight session on Monday, while the Nasdaq also advanced to a closing record in choppy trade as investors gauged the U.S.-EU trade pact and prepared for a week of major market catalysts. U.S. President Donald Trump and European Commission President Ursula von der Leyen unveiled a trade framework on Sunday, slashing EU import tariffs to 15% - half the previously threatened rate that was scheduled to take effect on August 1. Still, France denounced the deal as a "submission." The deal is the latest announcement in recent days on U.S. trade agreements with countries such as Japan and Indonesia. Top U.S. and Chinese economic officials resumed talks in Stockholm to resolve a trade war between the world's two largest economies. "It's feel-good in the sense that it doesn't represent Armageddon, if the draconian tariffs went into place," said Scott Welch, chief investment officer at Certuity in Potomac, Maryland. "But it's much too soon to pass judgment on the long-term effects on how that will play out. It's better than the alternative for sure, and so I hope they continue." The Dow Jones Industrial Average fell 64.36 points, or 0.14%, to 44,837.56, the S&P 500 gained 1.13 points, or 0.02%, to 6,389.77 and the Nasdaq Composite gained 70.27 points, or 0.33%, to 21,178.58. The benchmark S&P 500 index has now notched six straight daily closing records, en route to its 15th closing record of the year. Stocks have rebounded strongly from a selloff that began in early April when Trump announced a slew of tariffs. Mounting enthusiasm over the potential for AI technology has helped lift stocks, along with the realization of some trade pacts and early indications corporate earnings season may be better than anticipated. Investors now await a policy announcement from the Federal Reserve on Wednesday. The central bank is widely expected to keep U.S. rates unchanged even as Trump has ramped up pressure on Fed Chair Jerome Powell to lower borrowing costs. Also on deck this week were a slew of corporate earnings, including results from heavyweights Meta, Microsoft, Amazon and Apple, which could sway broader investor sentiment in either direction. Along with the Fed meeting and earnings, a number of economic indicators are scheduled to be released this week, including the Personal Consumption Expenditure report (PCE) - the Fed's preferred inflation measure - and the government payrolls report to gauge how tariffs may have affected consumer prices and the labor market. Nike climbed 3.89% after J.P. Morgan upgraded the stock to "overweight" from "neutral" and said investors should "just buy it". Energy, up 1.15% was the best performing S&P sector on the session, buoyed by a jump of more than 2% in oil prices while real estate, down 1.75%, and materials , off 1.44%, were the worst performing. Declining issues outnumbered advancers by a 1.81-to-1 ratio on the NYSE, and by a 1.48-to-1 ratio on the Nasdaq. The S&P 500 posted 26 new 52-week highs and five new lows, while the Nasdaq Composite recorded 68 new highs and 54 new lows. Volume on U.S. exchanges was 17.58 billion shares, compared with the 17.84 billion average for the full session over the last 20 trading days. - Reuters
New Straits Times
27 minutes ago
- New Straits Times
Boeing monitoring US tariff plan as analyst weigh impact on Malaysia
KUALA LUMPUR: American aircraft manufacturer The Boeing Company is keeping a close eye on Washington's proposed 25 per cent tariff on Malaysian imports as industry stakeholders warn of serious consequences for the local aerospace sector if the duties are imposed. Boeing's spokesperson told Business Times that the company is actively engaging with relevant authorities to mitigate the impacts of the proposed new tariff on the global aviation system. "We are closely tracking tariff developments and are working with policymakers to mitigate impacts of the global aviation system," the spokesperson said when inquired recently. The proposed tariff, part of President Donald Trump's broader 'America First' trade agenda includes a blanket 10 per cent tariff on all imports, with higher rates of over 100 per cent for goods from China, and a targeted 25 per cent tariff on selected countries, including Malaysia. The tariff on Malaysia was increased by one per cent from 24 per cent when it was announced earlier this year. One of the companies that may potentially be affected with the new tariff, should it be implemented, is Boeing Composites Malaysia (BCM) in Kedah. BCM produces composite parts such as aileron skins, flat panels and trailing edges for Boeing commercial aircraft models including the 737, 777 and 787 Dreamliner. The factory, which is Boeing's first wholly-owned subsidiary in Southeast Asia, has been a cornerstone of Boeing's sourcing strategy in the region. The factory employs over 1000 Malaysians and contributes to the development of local talents in advanced manufacturing and aerospace engineering. Aviation consultancy Endau Analytics founder and aviation analyst Shukor Yusof said there is still time for Malaysia to renegotiate with the US on the tariff. He believes that Boeing has a contingency plans in place should the tariff is imposed. "Tariffs have yet to take place, there's time to negotiate and make a deal. Boeing is a big contributor to the US economy and it is unlikely that Washington would cut off its nose to spite its face. "That said, I'm sure Boeing would have put into place a game plan to prepare for any eventuality," he told Business Times recently. Boeing global president Dr Brendan Nelson told Business Times in an exclusive interview in March this year that Malaysia continued to be an integral part of Boeing's operations, particularly through BCM. "Malaysia is not just a customer for us, it's a trusted partner. Our BCM factory in Kedah is one of the best examples of how we are investing in the local economy and workforce," he said, adding that there is a little piece of Malaysia in every single Boeing airplanes. Meanwhile, Shukor warned that Malaysia's aviation sector could face a grim outlook if the new tariff on the country is imposed without exemptions for aerospace components. "The impact will be costly, in terms of declining productivity and job losses. This is why the Investment, Trade and Industry MInistry and those involved in the dealing with the US administration need to consider all aspects of the equation," he said. Despite the possibility of a grim aerospace outlook, Shukor said it is unlikely that Boeing and other aerospace original equipment manufacturers would shift their manufacturing activities away from Malaysia. "No. These are long-term investments. BCM has been around since 1998, much have been ploughed into it and any shift (if at all) will take a long gestation period before it becomes a reality. And it will be very expensive," he said. Shukor added that Malaysia still holds strong advantages for aerospace investment due to the country's location, ease of doing business and low costs. Boeing's rival European plane-maker Airbus SE is already exploring its wings in Sarawak, Shukor said while Invest Selangor Bhd has done a good job bringing aviation investments into the state. On 16 July, Boeing opened a new corporate office in Kuala Lumpur, reaffirming its long-term commitment to Malaysia's aerospace ambitions under the Aerospace Industry Blueprint 2030. Boeing's relationship with Malaysia stretches back over 70 years, beginning in 1947 when Malayan Airways Ltd acquired its first Douglas DC-3 aircraft. Since then, the American aerospace giant has played a crucial role in Malaysia's aerospace development from commercial aviation and defence to education and community development. Local airlines that are operating Boeing airplanes include Malaysia Airlines Bhd, Firefly Sdn Bhd and Batik Air Sdn Bhd.
The Star
27 minutes ago
- The Star
Oil rises on US-EU trade deal, Trump's shorter deadline for Russia
People walking past an Opec logo during a climate change conference —Reuters LONDON: Oil prices rose on Monday after a trade deal between the U.S. and the European Union and U.S. President Donald Trump's announcement that he would shorten the deadline set for Russia to end its war in Ukraine or face severe tariffs. Brent crude futures were up $1.63, or 2.4%, at $70.07 a barrel by 1317 GMT while U.S. West Texas Intermediate crude rose $1.62, or 2.5%, at $66.78. Brent was trading close to its highest price in nearly 10 days after Trump said he was reducing the 50-day deadline he gave Russia over its war in Ukraine to 10-12 days. The deal between the U.S. and EU and a possible extension of the U.S.-China tariff pause also are supporting global financial markets and oil prices, said Tony Sycamore, a market analyst at IG. The framework trade pact with the EU that was announced on Sunday sets a 15% U.S. import tariff on most EU goods. Trump also said it called for $750 billion of EU purchases of U.S. energy in the coming years. Senior U.S. and Chinese officials are meeting in Stockholm on Monday to try to extend their tariff truce before an August 12 deadline. The U.S.-EU deal removed another layer of uncertainty and the focus seems to be shifting back towards fundamentals, said Tamas Varga, an analyst at PVM, adding that a strong dollar and falling Indian oil imports have weighed on crude prices. On the supply side, an OPEC+ panel is unlikely to alter existing plans to raise oil output when it meets on Monday, four OPEC+ delegates told Reuters on July 25. ING expects OPEC+, the group that includes the Organization of the Petroleum Exporting Countries and allies like Russia, to at least complete the full return of 2.2 million barrels per day of additional voluntary supply cuts by the end of September. - Reuters
