The key terms include:

• A 15% import tariff applied broadly to EU goods entering the US.
• The EU eliminating tariffs on US imports.
• EU commitments to purchase $750 billion in US energy.
• An additional $600 billion in EU investment in the US.

While the deal is a significant improvement over the 30% tariff threatened in recent months, the agreed 15% baseline tariff remains higher than the 10% the EU had hoped for. Reactions have been mixed, some European leaders welcome the return to policy stability, while others argue the terms are heavily skewed in Washington’s favour. With the EU offering zero-tariff retaliation and committing to massive US purchases and investments, it’s hard to see this as anything but a win for the Trump administration, bringing billions into the US tax coffers. That said, American consumers are likely less enthusiastic about the prospect of higher prices on European goods.

The EU–US trade agreement follows a landmark deal between the US and Japan, as other major economies scramble to finalise agreements ahead of President Trump’s August 1 deadline. The world’s attention now shifts to the potential US–China trade deal, widely regarded as even higher stakes than the EU-US deal and likely the ultimate goal of Trump’s trade agenda. While the recent trade deals seem to favour the US on paper, their real impact on the US economy and consumers will take time to unfold. In the months ahead, key indicators such as inflation, employment, corporate earnings and consumer spending will reveal whether Trump’s tariff strategy is delivering meaningful gains or unintended consequences.

At High Street, macroeconomic analysis is not central to our investment approach. We prioritise company-specific fundamentals, confident that a deep understanding of the businesses we invest in drives long-term performance more effectively than attempting to forecast the broader economy. That said, tariffs can significantly impact consumer demand and corporate margins, making them important to consider. They also affect inflation dynamics and expectations, which play a key role in our asset allocation decisions.

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