President Trump has once again put out the trade war fire he may or may not have started—this time with Europe. After some high-stakes chatting (and probably a few awkward handshakes), both sides agreed to lower the drama and the tariffs. Cue the economic kumbaya! Since this is the US's biggest trade partner in the world, let's take a closer look!
Here are Five Fast Facts on the US/EU trade deal:
- 📰 The Headline - The U.S. and the EU shook hands on a 15% tariff to the EU on most goods. That's like agreeing to pay 15% extra for your favorite imported chocolate, but it's way better than the 30% or 50% tariffs that were being threatened. Whew!
- ⚾ Other Details - In return, the US got zero percent tariffs on most goods. It's like Trump told them, "You want to play hardball? I'll bring the whole baseball team!" The EU decided not to play after all.
- ✈️ Some Exceptions - While most things get hit with the 15% tariff, some "strategic products" like airplanes, certain chemicals, and even some farm goodies get to keep their zero tariff status. So, you might get that fancy imported airplane for cheap, but your designer jeans might cost a little extra! Sorry 'bout ya, fashionista.
- 💰 But Wait, There's More - As part of the deal, the EU also basically promised to go on a shopping spree, agreeing to buy $750 billion worth of U.S. energy and invest $600 billion more in America in general. They're basically saying, "We'll buy your stuff and bring our money, just don't tax our cars too much!"
- 👏 Applause Is Expected - The markets are widely expected to approve of this deal. The 15% isn't going to break the bank for the EU or make things much more expensive for Americans, and anything that brings certainty is a good thing for investors. This deal brings a lot of certainty to two of the biggest trading entities on the planet, so…’nuff said.
🔥Bottom line: It seems the world's biggest economies managed to avoid a major trade war, mostly by the EU agreeing to pay a "not-as-bad-as-it-could-have-been" tax. Reading the political tea leaves, this really signals that the EU would much rather cozy up to the US than to China, and that is a tremendously good thing (at least for us)!
What do you think about all these favorable trade deals getting locked in?
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