President Donald Trump’s latest trade deal with the European Union is drawing sharp criticism from several leading economists, who argue that it will disproportionately harm American consumers and businesses.
What Happened: Following Trump’s announcement on Sunday, economist Peter Schiff posted on X, with a blunt assessment of the deal, saying that “Americans lose again.”
Schiff says that under the new terms, “we will pay 15% tariffs to buy most European goods, but 50% tariffs to buy European steel, aluminum, or copper, driving up material costs for many U.S industries.” Meanwhile, he notes, “Europeans won’t pay any tariffs on most U.S. imports.”
See Also: Stellantis Shares Surge On U.S.-EU Tariff Deal Prospects: What’s Going On?
University of Michigan economist Justin Wolfers echoed similar concerns, while highlighting the folly of imposing trade barriers. “These trade deals are all underwhelming for one simple reason,” he says, and that’s because trade barriers and tariffs have been tiny for decades.
“When tariffs are 1-2%, there’s not much to gain from a trade war,” he says, while warning that a 15% tax on imports can, however, “do a lot of harm to Americans.”
Danish economist Lars Christensen pushed back against the narrative that this was a bad deal for the EU and a win for Trump.
He says, “the deal lower[s] EU tariffs,” which he believes is “good news for European consumers,” while adding that it is bad for the U.S. economy.
Christensen agrees with both Schiff and Wolfers, saying that “the biggest losers are US consumers,” while comparing the deal to “shooting yourself in the foot” for the U.S., which he says “is never a victory.”
Why It Matters: The announcement of the trade deal with the EU on Sunday brought an end to months of trade and tariff-related uncertainties with the U.S.’s biggest trading partner.
Besides the 15% tariff on imports from the region, the EU will also be buying $750 billion worth of U.S. energy, while investing $600 billion in the United States. Additionally, nations in the bloc will be purchasing weapons from the U.S., although no amount was mentioned.
Meanwhile, top officials from the U.S. and China are set to meet in Stockholm to address pressing trade issues, with Trump saying last week that “We have the confines of a deal with China.”
U.S. stock futures are up pre-market, following news of the trade deal over the weekend. The S&P 500 Futures are up 0.37%, trading at 6,449.00, and Nasdaq Futures at 23,538.25, up 0.50%, followed by Dow Futures, which rose over 150 points, up 0.33%, trading at 45,234.00, at the time of writing.
Photo Courtesy: Savvapanf Photo on Shutterstock.com
Read More:
- Trump’s Trade Deal With Japan A Tax On Americans -- Economist Says, ‘Not Remotely Optimistic’ US Auto Companies Will Gain As Toyota And Honda Stocks Rally
