Europe reacts with mix of relief and concern to US trade deal

STORY: European governments and companies reacted with both relief and concern on Monday to the EU-U.S. framework trade deal.

Some saw it as unbalanced but were happy it avoided a deeper trade war.

The agreement will see the U.S. impose a 15% import tariff on most EU goods.

Its half the previously threatened rate, but much more than what Europeans hoped for.

Cinzia Alcidi is a Senior Researcher at The Centre For European Policy Studies.

“I think this is a glass half full, half empty. It is half full because there is this sense of relief and that the world’s outcome is excluded, where the worst outcome could have been 30% tariffs or even a trade war. On the other side, this is not what the EU wanted. I mean, the EU asked for a zero-type trade agreement, and this is not what we had.”

The 15% baseline tariff is half the threatened rate, but compares to an average U.S. import tariff rate of around 2.5% last year.

Many of the specifics of the deal were not immediately known.

The agreement included an investment pledge above the $550 billion deal signed with Japan last week.

Hildegard Mueller is President of Germany’s auto association the VDA.

She was relieved a deal was struck, but warned industry would still take a hit.

“The deal will also burden consumers in the United States. It will not only have consequences for Europe. In the long run, products will become more expensive. I believe that this is why it is not a good day for international trade or for consumers.”

German Chancellor Friedrich Merz welcomed the deal as it averted a trade war.

While French government ministers said the agreement had some merits, but wasn’t balanced.

One leading French minister said more talks would be needed before the deal could be formally concluded.