15% Tariff Resolution? Euro Surges! What Does the US-EU Tariff Agreement Bring to the Global Economy?

1. Introduction: Relief from "Avoiding the Worst" and New Anxieties

"The two blocs, accounting for one-third of global trade, have avoided a 'full-scale war'"—this was the market's assessment immediately after the news of the US-EU trade agreement broke. The STOXX600 rose by 0.7% to a four-month high, and S&P500 futures jumped to near record highs, while the euro erased its gains from Asian trading and fell back by 0.7% against the dollar.

2. Outline of the Agreement: 15% Tariffs and Massive Commitments

• A flat 15% tariff on most exports from the EU to the US (covering nearly 70% including automobiles, semiconductors, and pharmaceuticals)

• The EU promises to purchase $750 billion of US energy over the next three years and invest $600 billion in the US

• Meanwhile, US exports to the EU will remain with zero tariffs immediately

• Certain items like steel (50%) and wine (unresolved) will continue to be negotiated separately
  —these are the terms. The US administration emphasizes it as "symmetrical," but European media summarize it as "unilateral towards the US."

3. Market Movements: Euro Plunges, Stocks Risk-On

In the Tokyo market immediately after the announcement of the agreement, the euro/dollar briefly jumped to the 1.176 range, but fell back to 1.165 during European hours, marking the largest drop in 10 weeks. The backdrop includes "imbalanced agreement → growth slowdown → ECB rate cut expectations."

In contrast, the stock market saw a predominance of risk-on sentiment. Although the German DAX and French CAC40 rose in the morning and then slightly stalled, US tech futures maintained record high levels, supporting investor sentiment.

4. Cracks in European Politics: "A Dark Day" and "The Best Choice"

The most intense backlash came from French Prime Minister Bayou, who fiercely criticized, "Today is a dark day for Europe. This is submission."

In contrast, German Chancellor Merz expressed relief, saying, "Much better than a 30% tariff. Jobs were protected." The Benelux countries also described it as "undesirable but realistic," while in Eastern Europe, there are voices of caution about "increasing US energy dependence."

5. US Victory Declaration and Diplomatic Savvy

President Trump announced the agreement at his golf resort in Scotland, boasting, "This is the biggest deal ever." He highlighted it as a "consecutive victory" following a similar 15% tariff agreement with Japan just a week earlier.

The official X account of the White House also posted, "A big win for American farmers and the energy industry," showcasing the achievement domestically.X (formerly Twitter)

6. Economic Impact: Between Rising Prices and Slowing Growth

According to estimates by the AP, the average tariff rate is expected to jump from 1.2% to 17%, potentially pushing up US consumer prices by 0.4 points and dragging down EU growth by 0.3 points. Increased energy procurement costs and supply chain restructuring could squeeze corporate profits, ultimately eroding the real disposable income of both sides.

However, some see the fact that the "worst-case scenario of 30-50% comprehensive tariffs was avoided" as reducing the risk of a recession, and market participants are divided in their evaluations.

7. Enthusiasm and Lament on Social Media

• Supporters: "#AmericaFirst wins again," "US stock bull market continues!" (@ICEBYTE_)X (formerly Twitter)

• Skeptics: "The EU is held hostage. Next is agriculture"—posts spread with #EUTariffsX (formerly Twitter)

• Neutral Reporting: AJ English reported "full-scale war avoided," with over 40,000 retweets.X (formerly Twitter)
  In the social media space, there are a certain number of calm voices describing it as "a draw," but anger over "EU humiliation" and "forced buying agreement" is predominant, especially among users from France, Italy, and Spain.

8. Expert Perspectives: "A Victory Without Winners"

Several analysts from ING, IG, Berenberg, and others evaluate it as "a superficial victory due to reduced market volatility," while pointing out that the structural issue of "rising production costs in Europe" has not been avoided.

Mr. Clifton from Commonwealth Bank warns, "Uncertainties remain until the final implementation on August 1. If Canada and Mexico remain without agreements, disruptions in alternative supply chains will continue."

9. Future Focus: The "Main Event" on August 1 and Beyond

1. Renegotiation of Unresolved Items: 50% tariff on steel, wine, dairy products, etc.

2. Feasibility of Energy Purchase Targets: The EU is rushing to reduce dependence on Russia, but infrastructure development and costs are challenges.

3. Consistency with WTO: France and others hint at activating "countermeasures" as a countermeasure.

4. US-China Stockholm Talks: Scheduled a few days after the EU agreement, it will influence the future of the global trade order.

10. Conclusion

This agreement can be described as "a high tuition fee to avoid catastrophe." In the short term, the market's enthusiasm and the US administration's victory declaration stand out, but in the long term, the "hidden costs" of the risk of declining EU competitiveness and upward pressure on US prices weigh heavily. The next battlegrounds of the trade war are with countries without agreements, the energy market, and the WTO court. As the formal implementation on August 1 approaches, each country's next move is being tested.

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