On Point | Podcast What the U.S.-EU trade deal means for you
Aug 7, 2025
Peter Chase, a Senior Fellow at the German Marshall Fund with expertise in EU-US trade relations, and Matthias Mateys, an expert in international political economy from the Council on Foreign Relations, delve into the newly struck trade agreement between the U.S. and EU. They discuss the 15% tariff on EU exports and its implications for American consumers. The conversation also touches on investment flows, the evolving dynamics of tariffs, and how these changes could reshape industries like manufacturing and automotive, all within a broader geopolitical context.
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EU's Strategic Tariff Compromise
- The EU agreed to a 15% tariff on exports to the U.S. to avoid worse tariffs like 30% or 50%.
- This deal brought relief but showed divisions and differing negotiations within EU member states.
Why EU Wants Low Tariffs
- Tariffs raise costs mostly for importers who pass them to consumers, so EU wants to keep tariffs low to maintain U.S. demand.
- A 15% tariff can reduce demand enough to threaten EU exporters, forcing some to seek other markets or invest locally.
Tariffs Impact Factory Supply Chains
- Half of EU exports to the U.S. are intermediate components used in manufacturing.
- High tariffs on these components risk disrupting U.S. factory operations and thus harming American workers.