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European capitals defended the trade deal struck with President Donald Trump, which will see the European Union accept a 15% tariff on most of its exports to the US while reducing levies on some American products to zero.
European Commission President Ursula von der Leyen, who met with Trump in his golf club in Turnberry, Scotland, on Sunday, hailed the agreement for the stability and predictability it will offer businesses and consumers. The EU knew that the deal would favor the US, but von der Leyen urged reporters to “not forget where we came from,” referencing tariff rates Trump threatened that were as high as 50%.
The lower rate came as a relief to member states that are dependent on exports, especially Germany, which exported $34.9 billion of new cars and auto parts to the US in 2024.
“The agreement has succeeded in averting a trade conflict that would have hit the export-oriented German economy hard,” German Chancellor Friedrich Merz said in a statement late Sunday. “This has enabled us to safeguard our core interests, even if I would have liked to have seen further easing in transatlantic trade.”
Without a deal, Bloomberg Economics estimated that the total US average effective tariff rate would rise to nearly 18% on Aug. 1 from 13.5% under current policies. The new deal brings that number down to 16%. Prior to Trump’s latest trade fight, the EU estimated the average tariff rate to be about 1% on both sides.
Today's show features:
- Nancy Lazar, Chief Economist for Piper Sandler, on the global economic outlook and trade balance in the wake of the US trade deal with the European Union
- Andrew Bishop, Senior Partner and Global Head of Policy Research at Signum Global Advisors on the pending resumption of US-China trade talks
- Bloomberg News Israel Bureau Chief Ethan Bronner on President Donald Trump’s latest comments on the situation in Gaza
- Andrejka Bernatova, Founder and CEO of Dynamix, on her firm’s business combination agreement with The Ether Reserve
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