The US-EU trade deal in numbers

The recent agreement between Donald Trump and the European Union has averted the threat of 30% tariffs on EU imports that the US president had previously imposed. However, the EU will still be facing a new 15% tariff on goods sold into America, which is higher than the 10% tariffs that the UK faces on exports to the US under a previous agreement.

Analysts suggest that the UK’s agreement with the US may prove more advantageous than the EU’s deal, considering the lower baseline tariff rate of 10%. The UK’s car exports to the US will face a 10% tariff on a quota of 100,000 vehicles per year, while the EU will be subject to a 15% tariff on all car exports to the US.

In terms of pharmaceutical imports, the UK-US agreement includes negotiations to avoid future US tariffs, although the specifics are yet to be determined. The EU-US deal also remains unclear, with conflicting statements from President Ursula Von der Leyen and US officials regarding the application of a 15% tariff on pharmaceuticals.

The UK’s steel exports to the US are currently subject to a 25% tariff, lower than the global rate of 50% imposed by Trump. The UK is working to resolve technical issues to potentially avoid this tariff entirely. On the other hand, the EU’s steel exports would still be subject to the 50% tariff under the US-EU agreement, unless a quota system is negotiated.

Economists warn that the tariffs imposed by Trump could lead to a slowdown in the US economy, affecting demand for EU exports and UK firms exporting to the US. The uncertainty surrounding US trade policy makes it challenging for businesses to capitalize on potential tariff differences, as long-term relocation decisions may not be feasible.

Overall, the impact of these trade agreements on the UK and EU economies remains uncertain, with potential benefits and drawbacks depending on the specific details and implementation of the deals.