The Trump administration and the European Union run to Take a trade agreement On the deadline of the White House, on August 1, economists warning that a clear increase in prices could increase costs for consumers and businesses.
While the clock takes place, a series of pacts with other American trade partners in recent days has raised the hope of avoiding a trade war potentially damaging with Europe, with experts saying a treat with Japan Announced on Tuesday could serve as a model for an agreement with the EU.
The United States has also recently announced the contours of commercial transactions with ChinaIndonesia, The Philippines And United KingdomBut with many details remaining to be finalized.
For consumers and businesses on both sides of the Atlantic, many are on the outset of commercial talks. In the absence of an agreement, President Trump threatened to strike imports from the 27 EU member countries with a 30%tax. During the preparation of possible countermeasures, the European Commission said it would impose prices at more than $ 100 billion in American products from August 7, AFP reported on Wednesday.
Negotiations are underway and an US EU trade war could still be avoided. Quoting EU diplomats, AFP also said that business block officials could be opened at a price rate of 15% American, with potential sculptures for key sectors, according to wired service.
The White House did not immediately answer questions about the status of talks with the EU, especially if the Trump administration plans to conclude a trade agreement by the deadline of August 1.
President Trump Tuesday concluded a trade agreement With Tokyo which requires a price of 15% on Japanese imports. In return, the agreement calls on Japan to invest $ 550 billion in the United States and to further open its domestic market for American exports, including cars and certain agricultural products.
The rate of price of 15% on Japanese products is five percentage points higher than a reference rate that the Trump administration imposed on all foreign imports on April 2. But it is less than 25% that it threatened against Japan earlier this month and the functions of 24% of its administration propose At the beginning of April.
“Japan Deal is solidifying this model that we have seen so far, which is a certain relief of market access, a commitment to buy American products and a slightly lower basic level, but above the universal basic line, at the rate level,” CBS Moneywatch Alex Jacquez, head of policy and advocacy, a public research company, told CBS.
“The agreement in Japan certainly provides a framework of what [Mr. Trump] Looking for “Jacquez said.” It is a question of accepting a basic rate at 10% or more, then to make purchase commitments. “”
Key catalysts for commercial transactions
A key element in Mr. Trump’s trade agreements was a commitment by other countries to invest in the United States. The president defended prices as a means of relaunching the country’s national manufacturing base and making American exports more competitive, as well as generating additional federal income.
“We learn that the promise of a greater investment in the United States is working well with the administration,” said Gregory Daco, Ey Parthenon chief economist. “The promise to invest $ 550 billion was a large part of the Japan-United States trade agreement. It was a key catalyst to conclude a agreement.”
The EU, whose Member States have a combined gross domestic product of $ 20 billion, could probably engage in a significant investment in the United States, because it could extend over several years and focus on key sectors, such as technology, energy or artificial intelligence, added Daco.
EU additional commitments to buy American manufacturing goods and reduce trade barriers to American exports could also help conclude an agreement, he said. “These do not cost much, and they are an easy to highlight negotiation chip.”
Higher price risk
Although a 15% reference American rate on EU imports would represent a dismissal of Mr. Trump’s previous threats, this would further increase the prices of American companies and consumers, according to Daco.
“Although it may seem much, it is still much higher than the prices that the United States imposed at the end of 2024,” he noted. “There would therefore be a positive inflation shock due to higher prices. There would also be an erosion of demand from the reduction in commercial investments, hiring and reduced consumption expenses due to these higher rates.”
Currently, the average American rate rate rate is around 15%, according to its analysis. If Mr. Trump’s threatened tariffs come into force, this rate would increase to more than 20%. If the EU accepts a rate rate of 15%, however, the average American rate rate on imports from around the world would increase to 19.5%.
“It is always a significant increase in the average rate,” said Daco. “It’s much higher than the 2.5% where we started the year.”
Given that most American imports from the EU include industrial inputs such as components, raw materials and machines, all additional costs would take a tie to work in the supply chain, according to Ryan Young, a main economist of the competitive Enterprise Institute, a non -partisan thinking group.
“This would affect manufacturing exports more quickly that it would affect American consumers, but it would increase prices all around,” said Young.
contributed to this report.