The trade deal between the United States and the European Union, announced over the weekend, alleviates some of the recent uncertainty in global markets and is giving businesses a bit of breathing room to adapt to changing trade dynamics.
The deal establishes a 15% tariff on most goods and averts a trade war that might have disrupted economies around the world, according to industry observers.
“While the newly agreed 15% baseline tariff on most EU exports to the U.S. is nearly triple current average rates, it also avoids the far steeper 30% that had been on the table,” Gemma Thompson, a senior consultant at procurement consulting firm Proxima, said in a statement Monday. “It offers a degree of short-term certainty and averts a full-blown trade war, allowing businesses to adapt with greater predictability.”
The higher tariffs were set to take effect August 1.
Thompson said the challenge now is for EU exporters to determine how they will absorb or pass on the additional costs of the tariffs—factors that may lead to further supply chain shifting.
“Where margins are tighter, we’re likely to see knock-on effects to U.S. consumers. Many businesses will also be exploring broader supply chain shifts—for example, routing through lower-tariff countries such as Mexico,” she said. “However, our recent Global Sourcing Risk Index shows that adding Mexico into the supply chain introduces a host of different risks, from political instability to infrastructure and climate-related disruption.”
Outside of the 15% tariffs, both sides agreed to zero tariffs on certain items, such as semiconductor equipment, some agricultural products, natural resources, and other materials. The EU also said it will purchase $750 billion worth of U.S. energy—to help ease the trading bloc’s reliance on natural gas from Russia—along with further investments in the U.S. economy.
Those moves are a boon to many U.S. businesses, according to Thompson, who said U.S. exporters “stand to benefit from increased EU investment and zero-tariff access in key categories like energy, aerospace and semiconductors, but they must also prepare operationally to meet the scale of new demand, particularly around energy and defense supply.
“Pharma and spirits remain unresolved, while steel and aluminum tariffs stay at 50%. Regulatory divergence, especially if EU standards are relaxed to align with the U.S., could bring further complexity and reputational risk for European firms.”
