Reaction to US and EU trade deal | Money News

TURNBERRY, Scotland (Reuters) -U.S. President Donald Trump on Sunday mentioned the United States and the European Union had reached settlement on a trade deal that features a 15% tariff on EU items getting into the U.S. and vital EU purchases of U.S. vitality and army gear.

The deal additionally requires $600 billion in investments within the U.S. by the EU, he informed reporters.

This follows a U.S. deal with Japan on July 23 that cut tariffs on auto imports and different items in exchange for a $550 billion package deal of U.S.-bound investment and loans.

Major financial markets had been nonetheless closed. The euro ended final week round three-week highs at $1.1738, whereas the STOXX 600 <.STOXX> hit its highest since early June final week as optimism constructed for a EU-U.S. trading deal.

Following are feedback from business leaders and corporations, and market response to the announcement.

COMMENTS:

HOLGER SCHMIEDING, CHIEF ECONOMIST, BERENBERG BANK, LONDON:

“First the good news: the crippling uncertainty is largely over, the deal is bearable for the EU. Modestly good news for equity markets, that probably priced in most of it beforehand. The deal seems to be largely in line with the reports about a potential deal last Thursday.”

“Trump can claim that the asymmetric deal is a ‘win’ for him. But of course, the outcome is still bad relative to the situation that prevailed before Trump started his trade wars.”

“The U.S. can pay a heavy price for Trump‘s backward-looking protectionism through higher prices for consumers and less trend growth. Together with Trump‘s clampdown on immigration, his protectionism reduces U.S. trend growth from 2% to 1.5%.”

BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, BROOKFIELD, WISCONSIN:

“President Trump said the trade deal with the EU is the biggest of all the deals. Whether it’s imports or exports, Mexico, China, and Canada are greater offers than the EU. So, that is the most important deal till the subsequent one.”

“Settling into an average 20% tariff rate is better than the Liberation Day tariff rate of 25%, but it’s still a lot higher than the 2024 tariffs of 2.5%.”

“Tariffs are a stick to make it more expensive to produce outside the U.S. The One Big Beautiful Bill has a number of carrots in it to make it cheaper to produce inside the U.S. It’s a gamble to see if the stick-and-carrot approach to investing in the U.S. will work, especially since sticks tend to hurt right away while carrots take time to show their benefits.”

HASNAIN MALIK, STRATEGY HEAD OF EQUITY RESEARCH, TELLIMER, DUBAI: