The EU and the USA have agreed on a trade agreement that provides for flat tariffs of 15 percent on almost all EU exports — including cars, semiconductors and pharmaceutical products — thus averting the originally threatened 30 percent. Although zero tariffs have been agreed on both sides for some selected products, such as agricultural goods, aviation components or generics, many details remain vague, particularly with regard to investments and maturities.
The German automotive industry expects billions of euros in additional annual costs as a result of the tariffs and is urgently demanding investments in Europe as a location. The EU also committed itself to 750 billion US dollars worth of energy imports and to further investments of 600 billion US dollars in the USA — which is seen as a geopolitical signal to move away from Russian energy. At the same time, the US steel and aluminum tariffs remain at 50 percent, which puts an additional burden on industry in particular. Legally, the entire deal could still fail: A US court is currently examining Trump's legal basis for the unilateral introduction of tariffs — with potential effects on the entire agreement.
The tariff deal was initially received positively on the financial markets: The DAX rose by 0.9 percent to 24,424 points in early trading, while US futures also rose. In particular, car stocks such as Mercedes-Benz and Porsche benefited from the tariff cut to 15 percent, which was previously 27.5 percent. Yet analysts see the agreement more as damage limitation than as a breakthrough. According to Commerzbank, EU exports to the USA could fall by around a quarter as a result of the new burdens. The euro also fell slightly after the deal, while crude oil and bitcoin prices rose and the price of gold fell.
The energy markets only briefly reacted bullishly to the news on Monday. At the peak, the EUAs traded up to 72.25 euros/t of CO2 and briefly supported the Cal 26 Base electricity. However, the price increases in EUAs have now been equalized again and there are slight minus signs.
Our assessment: We had already expected in advance that the energy markets would not positively accept an agreement because it would involve higher tariffs and thus economic burdens. The agreement provides peace of mind and the uncertainty is resolved. However, the negative effects have now become clear and there is no longer any reason for hope.
Chart below: Cal 26 Base electricity chart at 11:30 a.m.: Initial price increase has now been equalized.