European equity markets surged on Monday after the United States and the European Union finalized a trade agreement, easing concerns over a potential tariff war between the two major economic blocs and offering businesses greater certainty moving forward.
By 03:05 ET (07:05 GMT), Germany’s DAX index had advanced 0.8%, France’s CAC 40 jumped 1.2%, and the UK’s FTSE 100 gained 0.5%.
Details of the EU-U.S. trade accord
Over the weekend, U.S. President Donald Trump unveiled a framework trade deal with the European Union, which sets a 15% import tariff on most EU products. In return, the EU pledged investments totaling approximately $600 billion in the U.S. economy.
While the agreed 15% tariff rate exceeded Europe’s initial aim of zero tariffs on both sides, it was broadly welcomed as a better alternative to the previously threatened 30% tariff.
This agreement offers companies much-needed clarity and helps prevent a significant breakdown in trade relations between two blocs that represent nearly a third of global commerce.
The 15% tariff level aligns with a similar deal reached last week between the U.S. and Japan, reflecting the rapid pace at which nations are moving to secure trade agreements with the U.S. before the August 1 deadline for new tariffs on goods from various countries.
Meanwhile, U.S.-China trade talks are scheduled to resume Monday in Stockholm as both economic superpowers attempt to resolve ongoing disputes.
At the same time, oil futures also gained momentum. Brent crude increased by 0.8% to $68.18 per barrel, and West Texas Intermediate rose 0.8% to $65.71 per barrel. The prospect of additional trade deals involving the U.S. has supported energy markets ahead of the looming tariff deadlines.
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