The EU and the US have finally struck a deal after weeks of intense negotiations. The deal comes just before America’s latest round of tariff talks with China. The agreement was reached after leaders from Washington and Brussels met face to face. It is evident that President Donald Trump’s personal involvement played a significant role in pushing the deal forward, similar to other deals he has struck. This is important to both sides since numerous businesses and jobs depend on “the world’s largest bilateral trade and investment relationship,” as referred to by the EU.
While the EU managed to avoid higher tariffs of 15% and instead faces 30%, it is still not as favorable as the UK’s 10% rate. For the US, the deal is expected to generate approximately $90bn (£67bn) in tariff revenue for the government and attract $600bn worth of investment into the country. However, the specifics of when and where the investments will be made remain unclear. The agreement is seen as a landmark moment in relations between the US and the EU. It was not easy to reach this agreement, with both sides unwilling to compromise, which prolonged the negotiations. The US has been critical of what it sees as Europe’s unfair trade practices, including the deficit and strict EU regulation. More details of the agreement will reveal how much has been done to address these concerns. However, European Commission President Ursula von der Leyen acknowledges the need to rebalance the deficit and make their trade relation more sustainable.
President Trump is determined to renegotiate how the US, the world’s largest economy, conducts business with other nations. The other major trade agreements the US has struck recently include those with Japan, the UK, Vietnam, and Indonesia. Mexico, Canada, and China remain the three largest US trade partners. With the US and China set to hold their next trade talks in Stockholm, Sweden, next week, there may be more positive news for the global economy. However, China has taken a more rigid stance compared to other countries in US trade talks, and failure to reach an agreement could negatively impact global trade in the months to come.
Source: https://www.bbc.com/news/articles/czxpdv5x54ko
