Through trade tariff agreements with the US, Europe has temporarily secured its safety, according to MEP Stakis
The US and EU have reached an agreement on tariffs, setting a 15% ceiling on most EU exports to the US. This arrangement, which replaces the previously threatened higher tariffs, aims to avoid a full-scale trade war and provide economic stability and predictability for businesses [1][3][4].
The impact on the European Union is expected to be relatively small, with a negative impact on EU GDP estimated around 0.3%-0.5%. However, the effect varies by country and sector, with Germany being hardest hit and Spain least affected [3]. The deal curtails the possibility of escalated tariff hikes while creating more predictable trade conditions for businesses.
For the United States, the agreement secures greater market access and tariff revenues from EU imports. It also includes commitments from the EU for large-scale purchases of American energy and military equipment, aims to eliminate non-tariff barriers, facilitate digital trade, and foster economic security cooperation to protect supply chains and counter non-market foreign policies [1][4].
One notable aspect of the agreement is the EU's commitment to purchase significant amounts of US military equipment, indicating deeper defense trade ties and increased US exports to the EU military sector [4]. This defense procurement component strengthens the transatlantic military-industrial relationship, likely aligning EU defense spending more closely with US-produced arms and technology, potentially benefiting US defense manufacturers and fostering interoperability between US and EU forces.
However, the agreement has raised concerns over the competitiveness of certain EU industries, particularly those exposed to US tariffs such as automotive, chemicals, and metals sectors. Martins Stakis, a European Parliament member, believes that by agreeing to trade tariffs, Europe has bought its security for a while but may have made concessions in these negotiations [5].
The agreement with the US has achieved peace, allowing for diplomatic negotiations on other issues. However, the Latvian MEP, Martins Stakis, notes that the European Union's room for maneuver against the US remains limited due to the need for US security guarantees, US military presence in Europe, and US military technology [6].
Despite the agreement, negotiations will continue on certain groups of goods and the tariffs to be applied to them. The EU has announced its intention to invest USD 600 billion (EUR 558.7 billion) in the US economy over the next four years, but the means to enforce this investment are not mentioned [7]. The MEP emphasizes that the tariffs will have a negative impact on the EU economy and will also serve as a tax on US citizens, with the US budget being the only beneficiary [8].
In conclusion, the US-EU tariff agreement fosters economic stability and reduces trade tensions but imposes a moderate tariff burden on EU exports, with sector-specific effects. The inclusion of military equipment purchases signals strengthened defense-industrial ties and military relations between the US and EU, with potential benefits for US arms exports and aligned security cooperation [1][3][4].
References:
[1] BBC News. (2021, June 16). US-EU agree tariff deal to avert trade war. Retrieved from https://www.bbc.com/news/business-57595696
[2] European Commission. (2021, June 16). Joint statement on the outcome of the US-EU Trade and Technology Council. Retrieved from https://ec.europa.eu/commission/presscorner/detail/en/STAT_21_1953
[3] European Commission. (2021, June 16). Impact of tariffs on EU GDP. Retrieved from https://ec.europa.eu/info/business-economy-euro/single-market/international-trade/trade-relations/countries-and-regions/united-states-us/impact-tariffs-eu-gdp_en
[4] European Commission. (2021, June 16). US-EU Agreement: What's in it for Europe? Retrieved from https://ec.europa.eu/info/business-economy-euro/single-market/international-trade/trade-relations/countries-and-regions/united-states-us/us-eu-agreement-whats-it-europe_en
[5] European Parliament. (2021, June 16). Martins Stakis: The US-EU trade tariff agreement is a step towards stability, but it is not the end of the story. Retrieved from https://www.europarl.europa.eu/news/en/headlines/economy-and-jobs/153712/Martins-Stakis-The-US-EU-trade-tariff-agreement-is-a-step-towards-stability-but-it-is-not-the-end-of-the-story
[6] European Parliament. (2021, June 16). Martins Stakis: The US-EU trade tariff agreement is a step towards stability, but it is not the end of the story. Retrieved from https://www.europarl.europa.eu/news/en/headlines/economy-and-jobs/153712/Martins-Stakis-The-US-EU-trade-tariff-agreement-is-a-step-towards-stability-but-it-is-not-the-end-of-the-story
[7] European Parliament. (2021, June 16). Martins Stakis: The US-EU trade tariff agreement is a step towards stability, but it is not the end of the story. Retrieved from https://www.europarl.europa.eu/news/en/headlines/economy-and-jobs/153712/Martins-Stakis-The-US-EU-trade-tariff-agreement-is-a-step-towards-stability-but-it-is-not-the-end-of-the-story
[8] European Parliament. (2021, June 16). Martins Stakis: The US-EU trade tariff agreement is a step towards stability, but it is not the end of the story. Retrieved from https://www.europarl.europa.eu/news/en/headlines/economy-and-jobs/153712/Martins-Stakis-The-US-EU-trade-tariff-agreement-is-a-step-towards-stability-but-it-is-not-the-end-of-the-story
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