PT Solid Gold Berjangka | Is the EU at back of the queue for a trade deal
ECONOMY SOLID GOLD BERJANGKA, SG BERJANGKA , SOLID GROUP, PT SGB , SGB
Solid Gold Berjangka | Time is running out for the EU to reach a deal with Washington and avoid a tariff shock, but Capital Economics warns that the chances of a breakthrough are slim as the bloc’s large trade deficit and internal divisions cloud the talks.
The stakes are high: if talks fail to produce a deal by the July 9 deadline, almost all EU exports to the US—around 70% of total shipments—will be subject to levies of 20%, up from the current 10%.
“We suspect a US-EU deal is unlikely to happen soon. The US may be less motivated to reach a deal with the EU than the UK or China,” Capital Economics says, underscoring the lack of urgency in Washington to resolve the impasse.
While the US appears to be in a deal-making mood after recent agreements with the UK and China, the EU faces bigger obstacles.
The EU’s substantial goods trade surplus with the US and the difficulty of reaching consensus among the 27 member states are obstacles on the road to a deal.
However, the recent deals the US has reached with the UK and China give the EU a clearer picture of how Washington is approaching a trade agreement.
“The two new agreements will strengthen EU negotiators’ confidence that they can largely stick to their stated policy of avoiding escalation, issuing few but delayed retaliatory threats, and remaining open to negotiations,” the analysts said.
Time is ticking for the EU to reach a deal with Washington and avoid a tariff shock, but Capital Economics warns that the chances of a breakthrough are slim as the bloc’s large trade deficit and internal divisions cloud the talks.
The stakes are high: if talks fail to produce a deal by the July 9 deadline, almost all EU exports to the US—around 70% of total shipments—will be subject to levies of 20%, up from the current 10%.
“We suspect a US-EU deal is unlikely to happen soon. The US may be less motivated to reach a deal with the EU than the UK or China,” Capital Economics said, underscoring the lack of urgency in Washington to resolve the impasse.
While the US appears to be in a deal-making mood after recent agreements with the UK and China, the EU faces bigger obstacles.
The EU’s substantial goods trade surplus with the US and the difficulty of reaching consensus among the 27 member states have been obstacles on the road to a deal.
However, recent deals reached by the US with the UK and China have given the EU a clearer picture of how Washington is approaching a trade agreement.
“The two new agreements will strengthen the confidence of EU negotiators that they can largely stick to the established policy of avoiding escalation, issuing some threats of retaliation but with delays, and remaining open to negotiations,” analysts said.
Source: Investing.com