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Malay Mail
2 days ago
- Business
- Malay Mail
What we know so far about the EU-US trade deal: 15pc tariff set, energy billions pledged
BRUSSELS, July 28 — EU chief Ursula von der Leyen clinched an agreement Sunday with US President Donald Trump to avoid crippling tariffs from hitting the bloc, with both leaders hailing a 'good deal'. The stakes were high with a looming August 1 deadline and $1.9 trillion transatlantic trading relationship on the line. Many European businesses will breathe a sigh of relief after the leaders agreed the 27-country bloc will face a baseline levy of 15 per cent instead of a threatened 30 per cent — but the deal will not satisfy everyone. Here is what we know so far: What did EU, US agree? Both sides confirmed there will be a 15-per cent across-the-board rate on a majority of EU goods — the same level secured by Japan this month — with bilateral tariff exemptions on some products. The deal will bring relief for the bloc's auto sector, employing around 13 million people — and hit by Trump with 25-per cent tariffs, on top of a pre-existing 2.5 per cent. 'Obviously, it is good news for the car industry. So Germany will be happy. And all the EU members with auto supply chains, they go from 27.5 to 15 per cent,' said Jacob Funk Kirkegaard of the Peterson Institute For International Economics. A 15-per cent levy will remain 'costly' for German automakers, 'but it is manageable', said trade geopolitics expert Elvire Fabry at the Jacques Delors Institute. While 15 per cent is much higher than pre-existing US tariffs on European goods — averaging 4.8 per cent — it mirrors the status quo, with companies currently facing an additional flat rate of 10 per cent imposed by Trump since April. The EU also committed to buy US$750 billion (RM3.16 trillion) of liquefied natural gas, oil and nuclear fuels from the United States — split equally over three years — to replace Russian energy sources. And it will pour US$600 billion more in additional investments in the United States. Trump said EU countries — which recently pledged to ramp up their defence spending within Nato — would be purchasing 'hundreds of billions of dollars' worth of military equipment'. Are there exemptions? Von der Leyen said the 15-per cent rate applied across most sectors, including semiconductors and pharmaceuticals — a critical export for Ireland, which the bloc has sought to protect. Trump in April launched probes that could lead to significantly steeper tariffs on the two key sectors, warning this month he could slap 200-per cent levies on drugs. Brussels and Washington agreed a bilateral tariff exemption for key goods including aircraft, certain chemicals, semiconductor equipment, certain agricultural products and critical raw materials, von der Leyen said. The EU currently faces 50-per cent tariffs on its steel exports to the United States, but von der Leyen said a compromise on the metal had been reached with Trump. 'Between us, tariffs will be cut and a quota system will be put in place,' she said. It is understood that European steel would be hit with 50-per cent levies only after a certain amount of the metal arrived in the United States, but no details were initially provided on the mechanism. What happens next? The deal needs to be approved by EU member states, whose ambassadors will meet first thing Monday morning for a debrief from the European Commission. And there are still technical talks to come, since the agreement needs to be fully fleshed out. Von der Leyen described the deal as a 'framework' agreement. 'Details have to be sorted out, and that will happen over the next weeks,' she said. In particular, she said there has yet to be a final decision on alcohol, critical since France and The Netherlands have been pushing for carve-outs for wine and beer respectively. 'This is something which has to be sorted out in the next days,' von der Leyen said. — AFP
Auto Blog
04-06-2025
- Automotive
- Auto Blog
German Automakers Discussing U.S. Tariff Deal, What You Need to Know
Germany's automakers could reach a tariff deal by early June Volkswagen, Mercedes-Benz, and BMW are leading talks with Washington over a tariff deal involving German automakers receiving credits for vehicles they export from America to other countries, which would lower or offset the tariffs on cars they import into the U.S. from Germany. America is the European Union's (EU) fifth-largest vehicle export destination after China, Japan, Britain, and Turkey, according to Reuters, but the U.S. is the largest export destination for German cars. Mercedes-Benz is expanding its U.S. production by manufacturing its GLC SUV at its Alabama plant starting in 2027, BMW is considering adding shifts at its Spartanburg plant in South Carolina, and Volkswagen's Audi mulls over producing some vehicles in the U.S.—a plan predating the Trump administration. Germany's leading automakers are aiming for talks with the U.S. Department of Commerce to result in a tariff deal in June. Mercedes-AMG GT 63 4MATIC+ — Source: Mercedes-AMG Germany already has a relatively sizable U.S. auto production presence The potential new and current investments that the Commerce Department is reviewing from German automakers are worth billions of dollars. BMW CEO Oliver Zipse said that the manufacturer's Spartanburg plant supports 43,000 jobs and contributes over $26 billion yearly. While many European automakers withdrew their 2025 financial forecasts, BMW is backing its March projections alongside Ferrari, which also stood by its 2025 earnings forecast. However, BMW's decision to stick with its 2025 guidance is partially based on the idea that some tariffs will go into reverse from July at the latest. BMW finance chief Walter Mertl said: 'We are noticing that things are moving, developing, and being negotiated everywhere. Accordingly, our reading, based on all the networks that we have at our disposal, is that we assume that something will change in July,' Just Auto reports. The German automaker's 2025 outlook includes earnings on par with 2024 and an operating margin in the car segment of 5-7%, according to Reuters. The head of Germany's auto lobby, Hildegard Müller, highlighted in an interview with Politico that Germany produces about 840,000 vehicles annually within the U.S. for both the American market and exports, with 140,000 total employees. In addition to BMW's Spartanburg plant, Mercedes-Benz's Tuscaloosa, Alabama factory has been operating since 1997, resulting in approximately four million vehicles produced. Volkswagen's Chattanooga plant, which opened in 2011, built 175,000 cars in 2023. Müller also pointed out that building a U.S. automotive plant, even if you're quick, takes one or two years, and companies are losing money fast. U.S. tariffs are causing manufacturers like BMW to lose $11.3 million daily and impacting about €67 billion ($76 billion) of EU automotive exports, Euronews reports. Volkswagen Golf GTI Mk7 — Source: Volkswagen Final thoughts Automakers like Volkswagen, BMW, and Mercedes-Benz are pushing for a U.S. tariff deal with the selling point that German automakers receive credits based on the number of vehicles Germany produces in America to reduce the two countries' car market trade deficit. However, if the tariffs stay in place, powerful voices in the automotive industry, like Hildegard Müller, noted that these policies can lower the pressure that U.S. car manufacturers face to be innovative, weakening their international competitiveness in the medium term. Autoblog Newsletter Autoblog brings you car news; expert reviews and exciting pictures and video. Research and compare vehicles, too. Sign up or sign in with Google Facebook Microsoft Apple By signing up I agree to the Terms of Use and acknowledge that I have read the Privacy Policy . You may unsubscribe from email communication at anytime.
