Thoughts on the EU-US trade deal

Interesting analysis from my former colleague Anna Stellinger on the EU-US trade deal agreed yesterday.

It seems that #US and #EU have reached an agreement today. Here are my initial thoughts and quick analysis:

✅ There is reason to be cautiously optimistic. If the handshake between the EU and the US creates predictability and, above all, a basis for continued discussions, that is certainly positive. A de-escalation is very welcome.

✅ However, there are several areas of concern: 1/ firstly, 15% is historically -incredibly- high tariffs, 2/ secondly, there seems to be, still, uncertainty regarding several sector tariffs, and 3/ one must acknowledge that a significant degree of general uncertainty remains. Among other things.

✅ The erratic behavior we have seen since January 2025 with announced tariffs, delayed tariffs, and a long series of different tariff rates will hopefully diminish, but the administration in the US has so far not seen the value of predictability, transparency, and non-discrimination. We cannot assume that the final word has been said yet.

✅ The level of 15% tariffs on goods from the EU to the US is of course lower than the figures of 20, 30, or even 50% we have heard since April from the American administration. But the level is exceptional. It is high, higher than many of us have experienced between the US and EU in our entire lifetime.

✅The US and the EU are economically incredibly intertwined. Our links are strong. The US is our most important trading partner and one of EU’s largest export, import, and investment countries. The historically high tariffs that the US has now decided on are unfortunate.

✅The effects will be seen both in the short term and the long term. European companies may need to reorganize production (increased or decreased in the US) and their production networks, but they may also need to take advantage of opportunities that exist in other growing markets globally in the longer term. There will be effects on global trade, jobs and growth.

✅There is fortunately a strong, positive free-trade agenda in the EU with solid and ambitious agreements and negotiations with other parts of the world. A long series of agreements are just about to cross the finish line.

✅There is still some uncertainty regarding the handshake between the EU and the USA… it will be interesting to analyze….

I agree with Anna, there are still a lot to be seen on how this will work. Yes, 15% is relatively lower than some other countries, but historically high.

The good news is if it can create stability so companies can make decsions and move on. I also think that the dynamic effects of chaningvtrade patterns as a result of this turbolence will create nee opportunities between countries.

Finally, if a side-effect of the entire liberation day tariff plan will positively impact trade distortion and lower trade barriers somrhomg good could come out of this. But it remains to be seen.