The European Union and the United States are moving closer to finalizing a trade agreement that would impose a 15 percent tariff on most goods, according to diplomatic sources familiar with the talks. The development has strengthened market sentiment and eased fears of an escalating transatlantic trade conflict.
Negotiations have accelerated in recent weeks as both sides seek to avoid a broader trade war. By mid-July, negotiators had made significant progress toward a framework agreement. However, momentum slowed following a renewed ultimatum from former President Donald Trump, who threatened to impose a 30 percent tariff on EU imports if no deal is reached by August 1.
In response, EU member states reassessed their stance, with sources that indicate a willingness to accept a 15 percent baseline tariff. This concession would apply across a broad range of goods, including automobiles, which remain a politically sensitive yet economically vital export sector for the European bloc.
The proposed agreement could also cover steel and aluminum. Under current discussions, exports exceeding specified quotas would face tariffs as high as 50 percent. While the European side has maintained a constructive tone, there is lingering skepticism over the durability of any agreement, particularly given Trump’s record of revising or reversing trade positions.
The prospect of a deal lifted global equity markets in midweek trading. Investors interpreted the developments as a sign of easing tensions, which have weighed on economic forecasts and disrupted cross-border supply chains.
Economists note that a finalized agreement would provide short-term clarity for exporters on both sides and potentially serve as a model for future trade talks with other U.S. partners. Still, uncertainty persists due to the volatile nature of U.S. trade policy in recent years.
With the self-imposed deadline less than two weeks away, attention remains focused on Washington. A deal would not only offer relief to European exporters but could also signal a shift toward more stable trade relations in a time of heightened geopolitical and economic uncertainty.
If finalized, the agreement may ease pressure on EU economies and support investor confidence heading into the third quarter. However, without formal commitments, risks of renewed tariff threats and political setbacks remain on the horizon.
The dollar index slipped below 97 as markets awaited delayed January jobs data, with weak retail sales and reports of China urging banks to cut US Treasury exposure adding pressure on the currency.
The dollar index stayed under pressure on Tuesday as fears of softer foreign demand for US assets, reports of Chinese banks cutting Treasury holdings, expectations of delayed US jobs and inflation data, and a firmer yen on intervention talk weighed on the greenback.
Precious Metals Rebound (09-13 February)Global markets began the week with the US dollar under pressure, falling under 97.5 for a second consecutive session. The greenback’s decline was fueled by a combination of improved risk sentiment and expectations of stable Federal Reserve policy with potential rate cuts on the horizon. Investors remained cautious as they awaited a backlog of delayed US economic data, including employment and inflation figures.
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