Global markets react to Trump's latest trade move
President Donald Trump and European Commission president Ursula von der Leyen announced a long-anticipated trade deal on Sunday, setting a 15% blanket tariff on European goods imported into the United States. The agreement, finalized during talks in Scotland, marks a shift from Trump’s earlier threat of a 30% tariff, easing tensions with America’s top trading partner.
Trump declared the trade deal as “the biggest of them all,” while von der Leyen called the result “the best we could get,” despite the EU’s previous efforts to lower the rate further.
Financial markets are likely to respond positively to the news, which potentially signals that tariff-related turmoil could be easing.
The 15% tariff will apply to key sectors including automobiles, semiconductors, and pharmaceuticals, although some strategic products such as aircraft parts and generic drugs are exempted under a “zero-for-zero” arrangement. Talks remain ongoing regarding tariffs on wine, spirits, and pharmaceuticals.
EU seeks stability, faces limited options
The deal drew cautious praise from European leaders. Italian prime minister Giorgia Meloni described the agreement as “positive,” adding that the 15% rate was “sustainable” as long as it did not layer onto previous duties. However, Meloni and others urged the European Union to activate national and bloc-wide support measures for industries likely to suffer.
European Commission officials acknowledged the agreement as a compromise. “We were dealt a bad hand,” one EU diplomat told reporters. “This deal is the best possible play under the circumstances.”
Businesses brace for impact
Financial analysts noted modest optimism following the announcement. Berenberg Bank’s Holger Schmieding said the outcome was “bearable” and “modestly good news for equity markets,” while Annex Wealth Management’s Brian Jacobsen stressed the importance of incentives to manufacture within the US.
Yet some sectors remain unsettled. The Distilled Spirits Council is lobbying for an amicable resolution to avoid retaliatory tariffs. “It’s time to get back to toasts, not tariffs,” said Chris Swonger, the association’s president.
China truce extension expected
Separately, US-China trade talks are set to resume in Stockholm this week. The South China Morning Post reported that both sides are expected to extend their current tariff truce by 90 days. Sources said the meetings will focus on longstanding issues, including Chinese industrial policy and fentanyl-related levies.
The extension is expected to avoid immediate tariff escalations as the US also sends out letters outlining tariff rates to over 200 countries by August 1.
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