Increased tariffs to impact Spain's sales revenue towards the US by 1.8 billion dollars
In a significant development in international relations, the United States and the European Union have reached a landmark agreement aimed at avoiding an open trade war. The terms of this agreement are still being debated, but it is clear that it is a cause for celebration for some.
The agreement involves superpowers committing to certain measures that aim to create stability and predictability for businesses and citizens on both sides of the Atlantic. One of the key terms is a reduction of U.S. tariffs on European products to 15%, down from a threatened 30% rate set to take effect August 1, 2025. In return, the European Union has committed to purchasing $750 billion worth of U.S. energy-related goods over three years and to investing an additional $600 billion in the U.S. economy. The agreement also addresses non-tariff barriers.
However, the agreement maintains a significant tariff rate with accompanying commitments on investment and energy purchases designed to balance economic interests and stabilize transatlantic trade relations. Economic analyses suggest that while the deal provides temporary relief from higher tariffs, it still imposes a 15% tariff that distorts trade and raises costs. The economic impact is expected to vary by sector and member state, with countries like Germany, Italy, and Ireland more affected due to their export profiles to the U.S.
The tariffs may lead to higher prices for U.S. consumers depending on whether EU exporters absorb costs or pass them on, with exchange rates also influencing competitiveness. U.S. President Donald Trump called it the “biggest deal ever made,” emphasizing its importance in averting disruptive tariffs. European Commission President Ursula von der Leyen highlighted that the deal "creates certainty in uncertain times" by delivering stability for transatlantic trade.
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In conclusion, while the trade agreement between the United States and the European Union is not yet finalized, it is a significant development in international relations that aims to avoid an open trade war. The agreement maintains a significant tariff rate with accompanying commitments on investment and energy purchases designed to balance economic interests and stabilize transatlantic trade relations. The "Subscribe" option is available for users who wish to access premium content.
The agreement in international relations, involving the U.S. and European Union, does not only influence trade tariffs and investment but also touches upon energy purchases. This significant deal, expected to avert a trade war, is not solely a financial concern but also holds political and industry implications. Meanwhile, the establishment offering premium content requires a subscription for full access to its articles.
