UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'Bad news or good news?'
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Jul 28, 2025 The podcast dives into a new trade agreement between the EU and the US, which raises import taxes for American consumers. It discusses the vagueness of EU commitments to invest in the US, highlighting the lack of authority behind these promises. The implications for pharmaceuticals and steel are examined, revealing disparities in the deal. Additionally, the talk touches on the upcoming trade tax impacts and the influence of retail sales data on economic sentiment, showcasing the intricate dance of global trade relations.
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US-EU Trade Deal Overview
- The EU and the US agreed on a trade deal raising US consumer taxes on European goods to 15%.
- EU President von der Leyen's pledges to buy and invest in the US lack enforcement authority.
Market Anticipation of Trade Deal
- The deal is better than a 30% tax but worse than conditions at the start of the year.
- Markets have already anticipated this bad news about higher consumer taxes in the US.
Future Impact of Trade Taxes
- Trade talks with China continue and may see an extension of current arrangements for three more months.
- New tax increases on US consumers will mainly impact prices starting January 2026.