EU awaits letter from White House on new duties. Stocks fell

The European Union is preparing to receive a letter from US President Donald Trump on new duties. Initially Brussels was counting on a large-scale trade agreement with Washington, but after several months of negotiations in the EU recognized: it looks like it will have to agree to a compromise. At the trading on July 11, investors got rid of European shares in anticipation of the rate announcement.

The European Union is awaiting a letter from Donald Trump on Friday formally notifying it of new duties against the United States' largest trading and investment partner, Reuters reports. Trump has escalated the trade war in recent days and has already imposed tariffs of 25 percent on Japan, 50 percent on Brazil, 35 percent on Canada, as well as a 50 percent levy on all copper imports. That the White House plans to send a letter with the new EU rates "today or tomorrow," the president announced in an interview on the NBC News program on Thursday, July 10. And there he added that he is considering across-the-board duties of 15% or 20% for most trading partners. "We're just going to say all the remaining countries will pay, whether it's 20% or 15%. That's what we're deciding right now," the US president said. Currently, the prime rate for a universal duty is 10%

Initially, the EU had hoped for a large-scale trade agreement with the United States with zero duties on industrial goods on both sides, Reuters notes. However, after months of difficult negotiations, Europe came to the realization that it would most likely have to agree to an interim agreement and only hope that more favorable terms could be achieved in the future, the agency adds. "To understand what the US intentions are, we would need a crystal ball," an EU diplomat commented on the situation to Reuters on condition of anonymity.

- The pan-European Stoxx 600 index fell by nearly 1% in trading on July 11.

- Germany's DAX index was down 0.8 percent.

- France's CAC 40 slipped by more than 0.8 percent.

- Italy's main stock index FTSE MIB fell the hardest, by 1.3 percent.  

"The EU is negotiating with the U.S. on sector-specific duties and reciprocal duties in general ... Everyone expected a better deal in the end, but now it looks like the outcome will be worse," Jochen Stanzl, chief market analyst at CMC Markets, told Reuters.

"Whether it's a reminder of the risks at hand or just a respite, it's clear that uncertainty will persist at least through the summer," noted AJ Bell investment analyst Dan Coatsworth in a note quoted by CNBC. He added that next week the focus of market participants will shift to the corporate reporting season, which will be opened by major US banks. This will provide insight into how companies are coping with global uncertainty.

This article was AI-translated and verified by a human editor