Andrew here. The U.S.-E.U. tariff deal, imposing a 15 percent tariff on most E.U. imports, averts steeper levies and offers a major trading partner some relief.
But 15 percent appears to be the new normal, much higher than pre-Trump levels of around 4.8 percent on average, and locking in increased costs for European goods. While it avoids a worst-case scenario, businesses will still face higher import duties — and U.S. consumers will probably pay more. The E.U.’s commitments to buy U.S. goods largely formalize existing trends. Crucially, the agreement doesn’t address President Trump’s core complaints, including European digital taxes on tech giants and other nontariff barriers.
We dive into all of it below and also examine what it could mean for other trade negotiations, including the hugely important ones with China.
‘We have a deal’
The U.S.-E.U. framework trade agreement is only a few hours old and has already drawn plenty of grumbling and questioning about what it means for the future of trans-Atlantic trade.
Still, investors so far seem content. Shares in Europe have gained on Monday, with Novo Nordisk, the Danish drugmaker and ASML, the Dutch semiconductor equipment manufacturer, leading the way. S&P 500 futures are also up, suggesting that the benchmark index will continue its winning streak.
But there’s little time for a victory lap as American trade negotiators are set to meet with their Chinese counterparts on Monday.
What we know (and don’t) about the E.U. deal:
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The agreement calls for a 15 percent tariff on many European exports to the U.S., including autos.
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The bloc agreed to buy $750 billion worth of American energy and increase investment in the U.S. by more than $600 billion, as well as buy “vast amounts” of military equipment, President Trump said.
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There will be zero tariffs on a range of American exports including aircraft, certain chemicals and select generic drugs, said Ursula von der Leyen, the president of the European Commission, the E.U.’s executive arm.
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There are discrepancies about whether tariffs on steel and aluminum exports to the U.S. would be capped under a quota system, and whether all E.U. drugs would be subject to the 15 percent levy.
Several commentators have complained that the deal overwhelmingly favors the U.S. The E.U. was angling for across-the-board levies of around 10 percent — but instead got a deal that resembles one struck with Japan last week.
Von der Leyen praised the agreement. “We have a deal,” she said on Sunday at a news conference at Trump’s golf resort in Scotland. She also said the agreement would restore a “balance” between two economic giants that do $1.7 trillion in trade annually.
Many European C.E.O.s, including LVMH’s Bernard Arnault, had been pressuring European leaders to quickly reach a pact — even if it was good but not great — to remove uncertainty that has disrupted their supply chains and jolted their shares. Trump has also been under pressure to announce trade deals with scores of countries before his self-imposed Friday deadline.
A deal with China could be much tougher to reach. Negotiators, including Treasury Secretary Scott Bessent and He Lifeng, China’s vice premier, are set to resume talks in Stockholm. On the agenda: hammering out an extension to avert some potentially triple-digit tariff levies (on top of those already in effect) that are set to go into effect in mid-August.
China has used its dominance of the rare earth elements trade to extract trade concessions, including on chips. Observers expect Beijing to play hardball on several matters, including tariffs tied to fentanyl supplies and Chinese purchases of Russian and Iranian oil under sanctions.
HERE’S WHAT’S HAPPENING
Americans don’t find President Trump’s tax and policy law so beautiful. More than half of respondents told a poll from The Wall Street Journal that they opposed Trump’s “big, beautiful” tax-and-spending law, including 54 percent of independents. Nearly 70 percent said it would benefit the rich, while at least half said it would hurt the poor and working class, and there are big worries for Medicaid and Social Security recipients. The findings suggest a possible line of attack for Democrats before the 2026 midterms.
CK Hutchison may bring in a Chinese partner for its big ports sale. The Hong Kong conglomerate said that it was in talks to bring on a “major” Chinese investor — which The Financial Times identified as Cosco, the state-owned shipping conglomerate — as it seeks to complete a $23 billion deal to sell most of its ports business to a group including BlackRock and the Italian shipping firm MSC. Talks have dragged on amid Beijing’s dissatisfaction over the initial deal terms.
Tesla strikes a $16.5 billion deal for Samsung chips. Elon Musk said on Monday that his electric vehicle company would buy semiconductors that Samsung plans to manufacture at a new plant in Taylor, Texas. The Tesla order could help Samsung catch up with TSMC in contract chip manufacturing: “The $16.5B number is just the bare minimum. Actual output is likely to be several times higher,” Musk wrote on X.
Tech giants’ earnings will be in focus this week. On deck are quarterly results from Microsoft and Meta on Wednesday and Apple and Amazon on Thursday. The Fed’s top policy committee will also meet on Wednesday to make its first decision on rates since Trump’s tense tour last week of the central bank’s building renovation. A crucial jobs report will be published on Friday.
What overseas commentators are saying about trade negotiations
President Trump’s scattershot threats have left international governments reeling as they scramble to cut deals before his Aug. 1 tariff deadline.
Now, the announcement of a preliminary agreement with the E.U. has prompted a new round of frustration from investors, analysts and other commentators around the world. Here’s what DealBook is seeing and hearing:
The E.U. avoided 30 percent tariff threats. But celebrating this ignores the perception that the bloc bowed to the “bully in the White House,” Torsten Riecke, a correspondent for the German financial paper Handelsblatt, wrote in a column. “He has deep down humiliated us,” Stéphane Manigold, president of the French restaurant group Éclore, told France’s LCI news channel on Sunday. “The message we heard is Trump saying, ‘I control the negotiation. I’m the one who leads it,’” he said. “It’s been like that from the beginning.”
India: There are no signs of a deal between New Delhi and Washington, but there are growing worries about the downside of a potential E.U.-style agreement: Yielding ground could risk a backlash, The Economic Times, a business-focused daily, wrote last week. Trump’s demand to sell American agricultural goods to a population of 1.4 billion Indians would devastate small-scale farmers and conflict with religious sentiments, the paper added: “If tariffs are imposed, it could affect billions in Indian exports — particularly textiles, pharma, chemicals, and gems and jewelry.”
Is Brazil getting the cold shoulder? Folha de S.Paulo, one of the country’s biggest newspapers, reported on Saturday that the Trump administration had not returned calls from Vice President Geraldo Alckmin since Trump threatened 50 percent tariffs on Brazil. “The formal negotiations are stalled, awaiting a green light from the White House,” wrote Julia Chaib, a Washington correspondent for Folha. (As of Friday, the White House hadn’t responded, according to Reuters). There are reasons for Brazil’s urgency: The paper said sales of Brazilian beef to the U.S. had dropped 80 percent since April.
On presidential planes and nuclear missiles
We’ve written before about the debate over the Trump administration accepting a Boeing 747 jet from Qatar to turn into an upgraded Air Force One, including what the Middle Eastern country may gain and how much it may cost.
The answers still aren’t clear. But The Times reports on how the administration is probably party financing the retrofitting of the plane — and may be shielding that project from scrutiny.
What’s behind a mysterious $934 million transfer? The Pentagon has also disclosed a huge movement of funds to an unnamed project from a long-delayed, way-over-budget plan to overhaul America’s ground-based nuclear arsenal.
It isn’t clear how much of the mystery project appears to be devoted to the Air Force One retrofitting, but The Times reports that Air Force officials privately acknowledge using the nuclear modernization funds to help pay for it.
How much will the plane revamp cost? Troy Meink, the Air Force secretary, testified before Congress in June that officials believed “the actual retrofit of that aircraft is probably less than $400 million,” dismissing speculation that it could cost some $1 billion.
But The Times reports that engineers and Air Force experts remain skeptical that the retrofitting can be completed at that price. And lawmakers are worried that Air Force will cut corners to finish the job in time for President Trump to use the plane during his term.
Not that the Air Force is commenting: It says the cost of the endeavor is classified.
“We’ve been thrilled so many people have a newfound interest in data workflow automation.”
— Gwyneth Paltrow, appearing in a cheeky social media post for Astronomer, the artificial intelligence start-up that made headlines after its C.E.O. and chief people officer were caught embracing this month at a Coldplay concert. (Paltrow is the former wife of Chris Martin, Coldplay’s lead singer.) Astronomer’s post has been viewed more than 36 million times since it went up Friday night.
The struggle to hire in the age of ICE raids
Glenn Valley Foods in Omaha was a bustling meatpacking company that had been setting sales records for more than a decade until this year, when federal agents raided a factory in search of undocumented immigrant workers.
That cost the company most of its work force — many employees were being deported or held at a detention center — despite the business using the federal E-Verify system to try to check if they were eligible for work.
It has left Gary Rohwer, Glenn Valley’s owner, in a bind: how to replace employees in an era of harsh scrutiny over the hiring of immigrants, The Times’s Eli Saslow writes.
[Rohwer] looked out into the lobby and saw three women filling out applications. Glenn Valley paid well, with an average hourly wage of almost $20 and regular bonuses, but the work was repetitive and demanding. Employees who came mostly from Mexico and Central America stood on a manufacturing line for as much as 10 hours a day, six days a week, and processed hundreds of pounds of meat through dangerous machinery in a cold factory.
Ever since videos of the raid spread across social media, Rohwer had answered dozens of calls from strangers who accused him of “stealing American jobs.” But Nebraska was experiencing a work shortage, with only 66 qualified workers for every 100 positions. Almost every one of the company’s new applicants was also a Hispanic immigrant.
“There are some jobs Americans don’t want to do,” Rohwer tried explaining to one caller. “We’re caught up in a broken system.”
THE SPEED READ
Deals
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The railroad operator Union Pacific is said to be on the brink of reaching an agreement to buy Norfolk Southern. (Bloomberg)
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“Crypto lenders dial up risk with ‘microfinance on steroids’” (FT)
Politics, policy and regulation
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A.I. data centers’ power needs are driving up electricity bills more broadly in the eastern U.S. (WaPo)
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Tyler Winklevoss, the co-founder of the Gemini crypto exchange, accused JPMorgan Chase of taking revenge on his company after he said the bank’s new data access fees could “bankrupt fintechs.” (CoinTelegraph)
Best of the rest
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“Plastic Turf Fields Are Taking Over America” (NYT)
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A man who claimed he represented the Astor Capital Fund absconded with $400 million from a Mexican billionaire. (WSJ)
We’d like your feedback! Please email thoughts and suggestions to [email protected].
Andrew Ross Sorkin is a columnist and the founder of DealBook, the flagship business and policy newsletter at The Times and an annual conference.
Bernhard Warner is a senior editor for DealBook, a newsletter from The Times, covering business trends, the economy and the markets.
Sarah Kessler is the weekend edition editor of the DealBook newsletter and writes features on business.
Michael J. de la Merced has covered global business and finance news for The Times since 2006.
Danielle Kaye is a Times reporter, covering business and policy for the DealBook newsletter.
The post Making Sense of the E.U. Trade Deal appeared first on New York Times.
