Sunday delivered the long-awaited trade deal between the EU and the United States...and by Monday, the market was already voicing its verdict. Here’s a quick sweep of what the usual market megaphones had to say.
‘The news is good’ - Neil Wilson, Saxo Markets
“The news on trade is good: The EU agreed to 15% tariffs on exports to the US and to buy hundreds of billions on American energy and defence exports. That’s less than the 30% tariff US President Trump had threatened to impose this week.”
“The positive news on trade continues to underpin the market for the time being, even if it’s ultimately inflationary. And there is a question mark over how sustainable the US-EU arrangements will be and over the potential for sectoral tariffs, such as in pharmaceuticals and semiconductors.”
For investors, the tariffs issue is being “defanged” - Chris Beauchamp, IG
"For the second time in a week, President Trump has been able to proclaim a trade deal with one of the US's key partners.
“Like the Japan deal, it seems to involve the US slapping on tariffs while the other side pledges to open up its markets. But for stock markets, the key element is that a deal has been done, and at a lower tariff level than feared."
"Tariffs continue to be defanged as an issue, and the announcement of yet another 90-day pause for China merely underlines the view that Washington is now closing down the issue, having gained a series of 'wins'.
“Now we wait to see whether the tariff price increases do start to show up in inflation data."
It’s a ‘pragmatic retreat’ by the EU - Lale Akoner, eToro
“In our view, the new US-EU trade agreement is a political and economic win for Washington, and a pragmatic retreat by Brussels.
“Markets will welcome the reduced uncertainty and the avoidance of an all-out trade war.
“The real winners here are US sectors such as energy, defence and infrastructure, which are set to benefit from the EU’s pledges to buy $750 billion in American energy and invest $600 billion into the US economy.”
A huge relief for European industry – Derren Nathan, Hargreaves Lansdown
“The 15% tariff on all transatlantic EU exports should be a huge relief for multiple European industries, from pharmaceutical companies through to electronic manufacturers and luxury brands.
“The likes of Airbus will be glad to hear that certain products, including aircraft and plane parts, will not attract any tariffs. As the world’s biggest trade corridor (30% of global trade and 43% of world GDP), this removes a huge element of doubt ahead of the 1 August deadline.”
“The US-EU trade deal has seen Brent crude oil prices climb back to $69 per barrel, with trade talks between Washington and Beijing the main focus for the rest of today.”
What it means for Euro carmakers - Rella Suskin, Morningstar
"A 15% import tariff is far less burdensome for the EU-owned automakers than the 27.5% currently being applied … This deal benefits automakers that have a greater reliance on imports from Europe.”
“We estimate that Porsche, Mercedes, BMW, and Volkswagen, in that order, are the most significant beneficiaries of this trade deal.
“Stellantis imports a single-digit share of its volumes from the EU for sale in the US, and thus should not see meaningful upside.”