stunned European trade negotiators<\/a> and rallied Europe\u2019s leaders into action. They quickly agreed to kick talks into high gear.\n <\/p>\n\n Trump, who has taken a particular liking to European Commission President Ursula von der Leyen, was swayed after she called him to say the EU would commit to moving \u201cswiftly and decisively.\u201d Trump soon backed off his threat and said negotiations would continue.\n <\/p>\n
\n But a deal between the United States and the European Union, one of America\u2019s top trading partners, had remained elusive for months. The two sides squabbled over America\u2019s insistence on high tariffs for steel and aluminum, looming tariffs on pharmaceuticals and the tariff floor for virtually all goods that the Trump administration appears set to raise to 15%.\n <\/p>\n
\n Negotiators were unable to come up with a resolution before the initial July 9 deadline \u2014 one of the reasons the Trump administration postponed the effective day for its \u201creciprocal\u201d tariffs to August 1. With just days to go before the extended deadline, while Trump was visiting Scotland, he met with van der Leyen and finalized a framework for an agreement \u2014 one that was thin on details, heavy on caveats, but was nevertheless a hard-sought relief for both sides.\n <\/p>\n
\n With the agreement in place, two of the world\u2019s largest economies avoided a potential economically crippling trade war. The United States held a 50% tariff threat over Europe\u2019s head, and Europe threatened America with strategic retaliatory tariffs that threatened to damage key US industries.\n <\/p>\n
\n Both sides appeared to embrace the fact that a deal was in place more than they celebrated it.\n <\/p>\n
\n \u201cWe made it,\u201d Trump said while announcing the deal with von der Leyen. \u201cIt\u2019s going to work out really well.\u201d\n <\/p>\n
\n \u201cI think we hit exactly the point we wanted to find,\u201d von der Leyen said. \u201cRebalance but enable trade on both sides. Which means good jobs on both sides of the Atlantic, means prosperity on both sides of the Atlantic and that was important for us.\u201d\n <\/p>\n
\n Markets cheered, somewhat: Dow futures rose 150 points, or 0.3%, poised to open near record territory. S&P 500 futures gained 0.3% and Nasdaq futures were 0.4% higher.\n <\/p>\n
\n The United States and Europe \u201cseem to have avoided a self-destructive trade war for now in the biggest and deepest commercial and investment relationship the global economy knows,\u201d said J\u00f6rn Fleck, senior director of the Atlantic Council\u2019s Europe Center.\n <\/p>\n
\n Nevertheless, the details remain murky. Europe will increase its investment in the United States by $600 billion and commit to buying $750 billion worth of US energy products. It eliminates tariffs on a variety of items, including aircraft and plane parts, semiconductors, generic drugs and some chemicals and agricultural products.\n <\/p>\n
\n Maury Obstfeld, senior fellow at the Peterson Institute for International Economics, note many of those investments were already in place. And the agreement appears to do little to eliminate the EU\u2019s non-tariff barriers, such as value-added and digital taxes that the Trump administration had railed against.\n <\/p>\n
\n \u201cThere are many things that puzzle me about this agreement,\u201d Obstfeld said.\n <\/p>\n
\n Industries in the zero-tariff arrangement cheered.\n <\/p>\n
\n \u201cThe zero-for-zero tariff regime will grow jobs, strengthen our economic security and provide a framework for U.S. leadership in manufacturing and safety,\u201d Airlines for America said in a statement.\n <\/p>\n
\n But the 15% baseline tariff applies to most goods, so the EU member states \u2013 and American importers \u2014 will have to come to terms with the fact that higher tariffs will raise prices for European goods in America.\n <\/p>\n
\n \u201cYou\u2019re going to pay more for your European imports. That\u2019s what this means,\u201d said Joe Brusuelas, chief economist at RSM. \u201cThis doesn\u2019t enhance trade, this just sets a tax on European goods in the United States.\u201d\n <\/p>\n
\n The agreement also deals another blow to Detroit automakers<\/a>, which objected to a similar deal the Trump administration reached with Japan. The 15% auto tariff on EU cars imported to the United States undercuts the 25% tariff American automakers pay if their cars are built in Mexico.\n <\/p>\n\n Although von der Leyen said pharmaceuticals were included in the early framework, she acknowledged that Trump may ultimately place higher tariffs on drugs imported to the United States, undercutting the agreement.\n <\/p>\n
\n Still, in the eyes of the hard-working negotiators \u2014 and for the sake of the global economy \u2014 a deal is better than no deal.\n <\/p>\n
\n \u201cWe avoid a tit-for-tat retaliation between Washington and Brussels that would\u2019ve spilled over into the far more important services sector,\u201d Brusuelas said.\n <\/p>\n
\n Now comes the hard part: figuring out the details.\n <\/p>\n
\n CNN\u2019s Matt Egan contributed to this report.\n <\/p>\n","protected":false},"excerpt":{"rendered":"Facebook Tweet Email Link The United States and the European Union avoided the worst-case scenario: a damaging, all-out…\n","protected":false},"author":2,"featured_media":41928,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101],"class_list":["post-41927","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/41927","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=41927"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/41927\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/41928"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=41927"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=41927"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=41927"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}