ASX set to slip, Wall Street hits record; US-EU reach trade deal
The trade deal announcement came after European Commission President Ursula von der Leyen travelled for talks with US President Donald Trump at his golf course in western Scotland to push a hard-fought deal over the line, which will see a 15 per cent US import tariff imposed on most EU goods.
'I think this is the biggest deal ever made,' Trump told reporters after an hour-long meeting with von der Leyen, who said the 15 per cent tariff applied 'across the board'.
'We have a trade deal between the two largest economies in the world, and it's a big deal. It's a huge deal. It will bring stability. It will bring predictability,' she said.
The deal, that also includes $US600 billion ($914 billion) of EU investments in the United States and significant EU purchases of US energy and military equipment, will indeed bring clarity for EU companies.
However, the baseline tariff of 15 per cent will be seen by many in Europe as a poor outcome compared to the initial European ambition of a zero-for-zero tariff deal, although it is better than the threatened 30 per cent rate.
The deal mirrors parts of the framework agreement the United States clinched with Japan last week.
On Friday, the S&P 500 rose 0.4 per cent to set an all-time high, the fifth time it did so this week. The Dow Jones climbed 208 points, or 0.5 per cent, and the Nasdaq composite added 0.2 per cent to its own record set the day before. A closely watched gauge of equity volatility – the VIX – closed below 15.
The Australian sharemarket is set to slip, with futures, set before the US-EU trade deal was announced, pointing to a slide of 5 points, or 0.1 per cent, at the open.
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