What's The Big Deal?

The European Union and the United States have reached a framework agreement on trade, with President Trump and European Commission President Von der Leyen announcing the deal. The agreement includes the EU purchasing $750 billion in US energy and investing $600 billion in the US, as well as the EU opening up its markets to US goods. In return, the US will lower tariffs on European goods to 15%, with some exceptions such as automobiles, airplanes, and parts. The deal is similar to the one reached with Japan last week, with both sides agreeing to reciprocal tariffs. However, the details of the agreement are still unclear, and there may be some discrepancies in interpretation. The deal is seen as a win for Trump, as it will increase US energy exports and investments in the US. The EU will also purchase "vast amounts" of military equipment from the US, which is seen as a positive for European security. The agreement reduces the downside risk to the European economy and removes some uncertainty for investors and corporates. However, some European industries may still face challenges due to the 15% tariff rate. The deal leaves US-China relations as the biggest unknown for global trade, with talks between the two countries ongoing.