A new “peace-deal” between US. and EU.
European Commission President Ursula von der Leyen and US President Donald Trump “finally” reached agreement on Sunday to end their trade dispute, establishing a fixed 15% tariff on most European products exported to the US, in addition to European commitments on energy (natural gas) and defense (armament) purchases.
Who will be the winner?
The euro rose on Monday after the United States reached a framework trade agreement with the European Union. Von der Leyen said Europe will also purchase $150 billion worth of U.S. energy as part of the deal, in addition to making $600 billion in other investments into the U.S.
The framework deal is similar to one forged with Tokyo negotiators last week that will see Japan investing around $550 billion in the U.S. and a 15% tariff imposed on its cars and other imports.
China is facing an August 12 deadline to reach a durable trade pact with the U.S. No breakthrough is expected in the U.S. and China talks in Stockholm, but analysts said another 90-day extension of a trade truce struck in mid-May was likely.
The U.S. dollar advanced on Friday, bolstered by solid economic data that suggested the Federal Reserve could take its time in resuming interest rate cuts. Both the Fed and the Bank of Japan are expected to hold rates steady at this week’s policy meetings, but traders are focusing on the subsequent comments to gauge the timing of the next moves.
What does this long-drawn-out agreement mean? It seems that the big winner will ultimately be the US, while EU countries will have to adapt to the decision, which after all was not as bad as it was previously thought.
One thing is certain and that is that the foreign exchange market and the world’s stock exchanges will strengthen in the future. This is due to higher prices for almost all imported and exported goods. However, it will be the end consumer who will suffer from higher costs. A good deal if you start from the threats of 30-50% tariffs on US products, and finally we must admit that Donald Trump is the best negotiator.
I will follow developments with interest and will return with new assessments when the agreement is officially recognized.
Thanks for reading my post, 28-07-2025
#Windmush / #curtbergsten
