July 22, 2024

EU-US Trade war on hold: An agreement to launch negotiations

LQDFX blog: EU-US Trade war on hold: An agreement to launch negotiations

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EU-US Trade war on hold: US President Trump, having the European Commission President by his side, announced that EU and USA will refrain from other tariffs.

The two trading partners will work together to eliminate tariffs and trade barriers. Despite his previous pessimism, Trump said that it was a “very big day for free and fair trade”. Jean-Claude Juncker visited the States for EU-US trade talks with the U.S. President to ease trade tensions.

Trump’s decision to impose tariffs on imported steel and aluminium from EU set off a domino effect. EU began charging import duties of 25% on a range of U.S. products. Then, Τrump threatened to impose a 20% tariff on all imports of EU-assembled cars, characterising EU as a trade “foe”.

EU-US Trade war on hold: Reactions

Germany welcomes the initiative to ease the threat of a trade war urging the two trading partners to back up their words with deeds.

France welcomes the discussions stating that “Any trade deal must be based on reciprocity”.

Britain in a statement issued by its Department for International Trade says – among other: “We look forward to progress towards the removal of steel and aluminum tariffs and de-escalation of the tit-for-tat action that could harm businesses and jobs on both sides of the Atlantic.”


FOREX – Currencies and commodities

The Dollar dropped 0.25% against its major traded rivals, at a 2-week low, following EU-US trade talks.

The Yen rose 0.2% against the greenback and 0.3% against the euro as traders expect BOJ rate review next week.

The Euro dropped 0.1% ahead of ECB meeting, after gaining 0.4% in the previous trading session.   

The Sterling traded flat amid expectations about a rate hike by BoE next week.

Oil prices rose following Saudi Arabia’s decision to “temporarily halt” its oil shipments through the Red Sea shipping lane.

Gold prices inched up following EU-US Trade talks.

Sources: Reuters, CNN money, the guardian

PLEASE NOTE The information above is not investment advice.