The United States and European Union are close to finalizing a 15% tariff deal, per reports. The US and EU would both waive tariffs on some products, per sources familiar with the deal, and the tariff deal would be similar to the one between the US and Japan.
The European Union has been working to lower US President Trump’s 25% tariff plan for months, and has reportedly worked to lower it by 10%. According to the Financial Times, Brussels could agree to the so-called reciprocal levies to avoid the US President’s threat to raise them to 30% from August 1.
The Financial Times added that the bloc’s exporters have been paying an additional 10% tariff on goods sent to the US since April, while talks between Washington and Brussels continued. That was on top of pre-existing duties averaging 4.8%. Sources told FT that they understood the 15% minimum tariff would include those existing duties, so Brussels views the deal as cementing the status quo. Therefore, tariffs on cars, which are currently 27.5%, would fall to 15%. Furthermore, the EU will continue to prepare a possible €93bn package of retaliatory tariffs, set at up to 30 percent, in case it cannot agree on a deal with the US by August 1.
Also Read: Dollar Falls 6.6% as Trump Cuts Japan Tariffs to 15% in $550B Deal
After today’s tariff announcements, the US dollar drop accelerated, with currency traders repositioning portfolios rapidly. The market’s reaction to the tariff deal was swift and dramatic, as institutional investors adjusted their positions along with retail traders. Trading volumes spiked as the greenback fell against major currencies, reflecting concerns over reduced protectionist policies and also uncertainty about future trade moves.