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Trump's tariffs deadline is looming for Europe. Here's where things stand
Trump's tariffs deadline is looming for Europe. Here's where things stand

CNBC

time3 days ago

  • Business
  • CNBC

Trump's tariffs deadline is looming for Europe. Here's where things stand

All eyes are on talks between the U.S. and the European Union, which have yet to strike a trade deal with just days to go before Washington's tariffs come into full effect. Should the trading partners fail to reach an agreement by July 9 — when a 90-day reprieve on U.S. President Donald Trump's so-called reciprocal tariffs ends — EU goods imported to the U.S. could be hit by duties of up to 50%. Retaliatory measures from the EU targeting a wide range of U.S. goods, which have also been temporarily put on hold, could then follow shortly afterward. The U.S.-EU trade relationship is one of the most important in the world, accounting for around 30% of global goods trading according to the European Council. Medicinal and pharma products, road vehicles and petroleum products are some of the top traded goods. In 2024, trade between the two transatlantic partners was valued at around 1.68 trillion euros ($1.98 trillion) when taking into account both goods and services, the European Council said. The EU recorded a surplus of 198 billion euros, when it comes to goods, but logged a deficit of around 148 billion euro in the trading of services — meaning the bloc overall had a trade surplus of around 50 billion euros in 2024. Trump has repeatedly taken issue with the trade relationship between Washington and Brussels, suggesting it is unfair and accusing the EU of taking advantage of the U.S. U.S.-EU negotiations have appeared to be difficult and slow to gain ground. Sources told CNBC earlier this week that a bare-bones political deal that is light on details may be the EU's best hope. European Commission President Ursula von der Leyen seemed to echo the view on Thursday. "What we are aiming at is an agreement in principle," she said, adding that a detailed agreement was "impossible" to reach during the 90-day reprieve. Von der Leyen also reiterated that, if no agreement is reached, "all the instruments are on the table." European Trade Commissioner Maros Sefcovic meanwhile said in a social media post on Friday said that he had had a "productive" week in Washington D.C. meeting various U.S. officials. "The work continues. Our goal remains unchanged: a good and ambitious transatlantic trade deal," he said. U.S. Treasury Secretary Scott Bessent seemed more hesitant about the odds of a trade agreement being struck before the deadline. "We'll see what we can do with the European Union," he told CNBC's "Squawk on the Street" on Thursday. Experts speaking to CNBC appeared skeptical about the short-term likelihood of a fully-fledged deal. Anthony Gardner, former U.S. Ambassador to the EU, told CNBC's "Squawk Box Europe" on Friday that he was "not surprised" von der Leyen had excluded the possibility of an all-inclusive deal. "The detailed agreement is what it says: detailed. It can run into many pages, [because] full trade agreements are thousands of pages, but what we could see is heads of terms like the one that the U.S. signed with the U.K.," he said. "So that's possible, but I don't think the actual content will be similar," Gardner added.

U.S. stocks are at record highs, but the outlook for the world's largest economy is no clearer
U.S. stocks are at record highs, but the outlook for the world's largest economy is no clearer

CNBC

time6 days ago

  • Business
  • CNBC

U.S. stocks are at record highs, but the outlook for the world's largest economy is no clearer

U.S. stocks have strongly rebounded after a rough start to the year, even as the outlook for the world's largest economy and its interest rates remains as uncertain as ever. Economic modeling is "very difficult" right now because "things are changing constantly," Atlanta Fed President Raphael Bostic told CNBC's "Squawk Box Europe" on Monday, pointing to Canada's recent walk-back on its digital services tax. Market participants are also closely-watching the latest progress of U.S. President Donald Trump's "big, beautiful bill," which cleared a key Senate hurdle over the weekend. From an inflation perspective, that means focusing on the expectations of businesses and consumers, along with the actions they are taking in response, Bostic continued. "The story there is that we are really starting to hear clear signs that they're expecting to raise prices, but how high and when that will happen is still quite unknown," he said. More businesses are reporting that they may not reach a final strategy on tariffs until 2026, so their impact on growth and price rises "could be a much more extended period than I think many expect," Bostic added. The latest Fed "dot plot," a map of members' expectations for rates, shows the wide range of different outlooks among officials for the economy, which Bostic said "really does speak to the uncertainty that's out there." The S&P 500 closed at an all-time high on Friday, coming back from early-April lows when it was down nearly 18% in the year to date. The index has logged big swings amid the White House's ongoing tariff story, the latest chapter of which introduced a framework trade agreement between the U.S. and China that helped boost market sentiment last week. The U.S. trade deal with the U.K. meanwhile went into force on Monday, reducing tariffs on British cars and aerospace parts, but keeping a baseline duty of 10% in place on most goods. The two countries have yet to finalize a deal on steel imports — while broader U.S. steel tariff policy is keeping prices elevated stateside and depressed elsewhere. The White House remains locked in negotiations with numerous key trading partners, including Canada, the European Union, Taiwan, Japan and India. "Markets at the moment are I think taking a very naive view of what's happening on the trade front," Bob Parker, senior advisor at the International Capital Markets Association, told CNBC's "Squawk Box Europe" on Monday. "We could easily be having this discussion at the end of the year or potentially going in to 2026, as we all know carrying out trade agreements is very complicated and lengthy," Parker said. "And as we saw over the weekend with Canada, there is a serious risk of trade negotiations failing." He added that, with the European Union in particular, even if the July 9 deadline to reach an agreement is extended, several sticking points could see an elevated level of tariffs stay in place.

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