By Andrew Gray and Andrea Shalal
TURNBERRY, Scotland, July 27 (Reuters)
Trump and European Commission President Ursula von der Leyen met recently to come up with an agreement regarding tariffs and the trade situation. Most of these deals or agreements, and disagreements that influence a nation and various economies, do not just start. There are people, mostly leaders and those who are in politics, who make a decision or shake hands to collaborate. It takes a face-to-face meeting and a strong, uncomfortable conversation to get to the finish line. Therefore, whatever the outcome, it has an effect on people, businesses and the overall economy.
After an hour-long meeting, Trump and von der Leyen announced the deal
The U.S. struck a framework trade agreement with the European Union on Sunday, imposing a 15% import tariff on most EU goods – half the threatened rate – and averting a bigger trade war between the two allies that account for almost a third of global trade. U.S. President Donald Trump and European Commission President Ursula von der Leyen announced the deal at Trump’s luxury golf course in western Scotland.
After an hour-long meeting that pushed the hard-fought deal over the line, following months of negotiations, Trump told reporters, lauding EU plans to invest some $600 billion in the United States and dramatically increase its purchases of U.S. energy and military equipment that,
“I think this is the biggest deal ever made.”
Trump is a tough negotiator, and now they have to agree to disagree
Trump said the deal, which tops a $550 billion deal signed with Japan last week, would expand ties between the trans-Atlantic powers after years of what he called unfair treatment of U.S. exporters. Von der Leyen, describing Trump as a tough negotiator, said the 15% tariff applied “across the board,” later telling reporters it was “the best we could get.” Ursula von der Leyen said,
“We have a trade deal between the two largest economies in the world, and it’s a big deal. It’s a huge deal. It will bring stability. It will bring predictability.”
The agreement mirrors key parts of the framework accord reached by the U.S. with Japan, but like that deal, it leaves many questions open, including tariff rates on spirits, a highly charged topic for many on both sides of the Atlantic. The deal, which Trump said calls for $750 billion of EU purchases of U.S. energy in the coming years and “hundreds of billions of dollars” of arms purchases, likely spells good news for a host of EU companies.
Jobs, tariffs, and new regulations for both parties are at risk
The US and EU are very influential. Although they have had a good relationship for years, this whole situation, whether the outcome is good or bad, will definitely have an effect on jobs, tariffs, businesses, economies and many more. Tariffs have just been the main character in this whole thing, and now there is hope and an expectation to reduce some of those expenses and facilitate the flow of goods back and forth.
Will Trump and Ursula be on the same page? Right now, it is not a one-way answer since there are negotiations still ongoing. However, maybe they might not because Trump has argued that his tariffs are bringing in “hundreds of billions of dollars” in revenues for the U.S. while dismissing warnings from economists about the risk of inflation. Therefore, if Trump does not agree to reduce the tariffs, then it will make businesses and investors feel more anxious about everything and their revenues and growth or development in general. There are still discussions surrounding the matter.