A Big Change for Trade Between the US and the EU

There has been a big change in global trade lately. The US and the EU reached an important trade agreement that aims to lower tensions and change the way people think about the economy.  This breakthrough suggests that there will be a new era of working together.

 This important deal put a 15% tax on most European goods that come into the US. This was a clear lowering of prior, larger threats. The EU promised to put an extra $600 billion into the US economy to help it grow.  They also committed to buy a lot more US energy, for a total of $750 billion over three years.  This all-encompassing agreement helped keep a trade war from happening.  The US-EU accord puts a 15% tax on most imports and stops the threat of a trade war that may cause a global shock.

Market Signals and the Effect on Currency

The markets moved swiftly. The euro went down versus the US dollar following a short, slight advance.  This happened because of the EU’s tariff cuts and large investments in US markets, which made the dollar stronger.  The US stock market, especially the S&P 500, on the other hand, was very positive and reached new highs. A comparable trade deal with Japan, which also included a 15% reciprocal tariff cap, added to this good trend. This suggests that trade concerns were getting better.  

This deal across the Atlantic, along with other trade talks, has helped calm investors down.  It gives firms on both sides a defined path, which makes things less uncertain and helps them expand.

Also read: Gold Prices Dip Amid Hawkish Fed Signals: What Investors Should Know This Week