Jeff Moon, Former Assistant US Trade Representative for China discusses the US-EU trade deal, highlighting its significance in providing certainty in an uncertain environment.
00:00Let's look now to Jeff Moon, who's a former U.S. Assistant Trade Representative to China.
00:05Welcome to the program, Jeff. Jeff, great to see you.
00:08So I wonder what you make of this deal. Do you think it does what both sides want?
00:13Well, the U.S. and the EU have the world's largest bilateral trade and investment relationship.
00:19So this deal is very significant, and it's positive in the sense that it provides certainty in a very uncertain environment.
00:27The ability to predict tariffs enables companies to move forward with confidence.
00:32The logistics sector, which has been frozen, can also move ahead.
00:35Consumers can budget for their needs.
00:37However, this is really only the beginning or the end of the beginning of Trump's tariff negotiations.
00:44As your correspondents have been saying, many of these deals are very broadly worded.
00:48They're undocumented. They need to be finalized and then implemented.
00:52So there are many open questions, especially with regard to non-tariff barriers, that have been disputed for many decades, and a lot more work needs to be done.
01:01So as you say, many open questions about some of the detail here.
01:05But in essence, the EU agreeing to buy more U.S. energy and arms, while also taking a hit on higher tariffs on some metals and some cars.
01:14Perhaps not surprising that not all EU leaders have welcomed this.
01:18France's leader calling it a dark day for Europe.
01:20Well, I think you need to look at this deal in a broader context.
01:25The U.S. had a trade deficit last year with Europe of $230 billion.
01:30American and EU leaders have agreed on the need to rebalance that relationship.
01:35So the deal is fair to the extent that this agreement balances trade and reduces the deficit.
01:40But I understand the reservations that some European leaders have.
01:43So what do you think it might change globally, potentially affecting the way that global trade works, thinking about maybe semiconductors, pharmaceuticals, green technologies?
01:52Will this shift things there?
01:55Well, with regard to those specific sectors, the impact is not clear because many of those products are subject to Section 232 investigations here in the United States.
02:06Those investigations are separate from these tariff negotiations, and they have yet to be concluded.
02:12We know that the steel and aluminum tariffs have not been affected by these negotiations.
02:18But one of the open questions is the relationship between the deals that have been reached and the ultimate outcome of those investigations.
02:25So these are questions that we just need to wait to resolve.
02:28So as you say, just the beginning, perhaps, but does this look like a genuine de-escalation of those trade tensions or more of a strategic realignment?
02:39I think it's a genuine de-escalation.
02:41And as I said, it's most important.
02:43We were talking before about tariffs as high as 30 percent, which would really be cost prohibitive.
02:50I don't think anyone in Europe wants to absorb the 15 percent tariffs, but this is something that businesses are saying they can probably find a way to manage.
03:00Jeff, great to talk to you.
03:01Thank you so much for coming on the program.
03:02That's Jeff Moon, former U.S. Assistant Trade Representative to China.
