Description: The US and the European Union have disclosed key aspects of their concluded 15% tariff rate trade agreement. According to the agreement, the US would impose 15% tariffs on around 70% of goods coming from Europe, with the exception of wine, spirits and steel. The deal which initially also excluded pharmaceuticals and semiconductors would include those products under the 15% tariff umbrella making trade relations going forward extremely predictable, according to EU Commissioner Ursula von der Leyen. Trump also expressed satisfaction with the concluded terms of the agreement as he stated that the US would largely benefit from under the conditions of the agreement in stimulating domestic production from companies exclusively favoring EU as their headquarters. Automakers and spirit producers were left out in dissatisfaction with the trade agreement which would need to be passed as legislation in order for the reciprocal trade provisions to take effect.
Impact: The European Union was diplomatically subdued by the US towards concessions strengthening EU dependence on the US economy and strategic ties. Under the disclosed terms of the agreement, industrial sectors such as automotive and spirits production would be mostly impacted by the agreement which could create subsequent problems in ratifying the agreement, considering the EU’s developed automotive and spirits sectors. The US is certainly establishing a more favorable and advantageous position under the current trade terms which were forced in acceptance from the EU in return for preserving other vectors of bilateral cooperation, such as defense ties.