18h ago

US-EU deal sets a 15% tariff on most goods and averts the threat of a trade war with a global shock

EDINBURGH, Scotland (AP) — The United States and the European Union agreed to a trade deal setting a 15% tariff on most goods, President Donald Trump announced Sunday, staving off for now higher import taxes on both sides that might have sent shock waves through economies around the globe.

World News @lemmy.world

zero @fawq.net

24h ago

Threat of US-EU trade war looms as Trump and top European official plan talks in Scotland

apnews.com /article/trump-scotland-tariffs-europe-8d2fb467d64f7fdfc4797dbebd54e8fc

13 comments

Since no agreement with Trump means anything this "deal" is barely important news. Tarrifs between the EU and the US can and will change unpredictably.
- This is an important point.
  When the new trade deals materialize in a year and a half or so, precipitated by the chaos Donald created, the US will find its economic power diminished. The evident unreliability of the US and its governing system is not going to be ignored by the rest of the world when China is waiting in the wings and demonstrating a firm commitment to business.
  
  And it's costing US companies a shitload of money, not just directly to the government on tariffs, but also in lost sales.

And the markets will rejoice that he only hacked off our own toes instead of the whole foot.
- hacked off our own toes
  Maybe, probably, perhaps...
  I mean, hopefully it's only " some toes" Problem is that the credibility is completely down the drain. I wonder whether any deal with this administration will restore both consumer's & producer's sentiment.
  We'll see which way it will go.

Steel and aluminum remain at 50%, and the EU has to invest in the US and buy military equipment from them. Sounds like a terrible deal and I hope we (Canada) don't make a similar one.
- It does seem that way. Unfortunately, the info is yet quite meager. The official EU press release was a bit of a propaganda piece imo. See also this X post
  Other outlets are slowly realeasing some info, and one paper states that it's more of a " principle deal" and that many details need to be worked out. There is a list of zero tariff goods as well.
  And, FYI, we were already importing US LNG, and US defense materials. I don't know about the amounts and specifics of existing contracts though.
  Also, we ( EU) will be importing Canadian LNG and other stuff from Canada, in the coming years.

We (EU) have been sold.

The title is very misleading. It implies that there are 15% tariffs on both sides but only the US is levying the tariff. This is a horrible deal for the EU.

The article really should have covered some basic economy.
The US consumer and factories are paying the US government 15 cents on every dollar of product they import from the EU.
That's annoying for the EU, because it will mean fewer exports to the US. But it's WAY worse for the US.
And on top of that, it's really not so bad for the EU, all in all, the tariffs are lower than for many others, meaning that we might actually sell more. Of course, that's assuming the US keeps imports steady, which they won't, because prices will go up and thus demand goes down.
- This is horrible for the EU. They now have a huge economic disadvantage over the US.
  And on top of that, it’s really not so bad for the EU, all in all, the tariffs are lower than for many others, meaning that we might actually sell more.
  This is some of the hardest cope I have ever read. "If we work while the others are on strike then we can get paid while they do not!" https://en.wikipedia.org/wiki/Strikebreaker
  
  This is horrible for the EU. They now have a huge economic disadvantage over the US.
  Yeah, that IS the point of tariffs. It's also a very basic understanding of global trade.
  When you buy something from another continent, you're already paying WAY more than when you're buying it nearby. So why would you do that? Well, in most cases, it's because you can't buy it locally.
  Global trade is global because lots of products aren't produced everywhere. Much of what the EU is selling to the US is stuff that the US either doesn't make, or doesn't make in enough volume to cover its needs. And vice versa. Trade balances group products together, so it doesn't usually show, but you can sell me a billion worth of ball bearings, and I can sell you a billion worth of ball bearings, and if I tariff you heavily, that won't change at all because there are a thousand different types of ball bearings.
  Now, traditionally, a tariff can promote growth of local industries, but you can't just make a new factory in a few weeks, months or sometimes even years. If we assume the industry reacts immediately, it will be many years before simple factories are up, and decades before entire chains are reproduced.
  And the industry won't react immediately, because nobody trusts that these tariffs will stick. You need to put a tariff in place for decades to be effective, and Trump can't even stick to a plan for months.
  So in practice, just having short term stability is worth it. Plenty of industries are actively holding off on large purchases because it might suddenly have a 20% tax hike on top. Or lose one, or god knows what the orange idiot does next that will destroy your profit margin.
  Because again, they're not buying abroad for a small advantage, they're doing it because that's where this product is made, and they can't buy it elsewhere.
  Strike breaking
  That doesn't remotely apply. Assuming International Trade is like your personal bank account is a Trump level misunderstanding of economics.

EU accepted 15% tariff AND it has to keep spending billions on oil, gas, and weapons from US. If it doesn't US can increase the tariffs. So to summarize:
EU has worst trade position than before
EU is still tied to US without clear way to become independent
the situation is only stabilized for now and Trump can "alter the deal" in the future
Great job Ursula!
Seriously, it's clear now that UE only has one card: let's build close business ties with everyone so they can't afford to fight us. Putin and Trump showed that this tactic doesn't work against strongmen but EU is unable to come up with anything else. EU has no power and it will all go downhill now.

13 comments