The financial pundits are putting their customary spin on it, but overall as the reciprocal tariffs begin, things are going well.

China’s trade surplus with the US declined to USD 23.74 billion in July, down from USD 26.57 billion in June, as both exports and imports with the US declined, falling 21.7% and 18.9%, respectively. {LINK}

For Germany, exports to the U.S. slid 2.1% to 11.8 billion euros, the third consecutive monthly decrease and the lowest value since February 2022, Destatis said. They were 8.4% lower than the same month last year. {LINK} However, since imports from the U.S. increased at the same time, this narrowed Germany’s trade surplus in goods with the U.S.

Swiss President Karin Keller-Sutter left Washington empty-handed on Wednesday after a hastily arranged trip to avert a crippling 39% tariff on the country’s exports to the United States, its biggest market, three sources familiar with the matter said. {LINK}

Reciprocal tariffs begin today. “Before Thursday, virtually every country’s goods were subject to a minimum 10% tariff. Now rates vary substantially from country to country.”

The highest rates imposed are on goods from Brazil (50%), Laos (40%), Myanmar (40%), Switzerland (39%), Iraq (35%) and Serbia (35%).

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Commerce Secretary Howard Lutnick describes some of the details within the new U.S-European trade agreement.

As noted, the $600 billion in regular trade products exported by the EU to the USA market will be subject to a 15% reciprocal tariff.  This approach effectively ends the Marshall Plan, sets the trade terms to balance and should generate approximately $90 billion in revenue to the U.S. treasury.

U.S. tariffs on cars and auto parts are being reduced to the baseline 15 percent — a level that matches the deal notched earlier this month by Japanese automakers. In exchange, the EU has agreed to lower its car tariffs from 10 percent to zero, trade spokesperson Olof Gill said.  The German companies are angry though, because the 25% tariff still applies to Mexico. So, German autos manufactured in Mexico (massive prior investment) will come to the USA with a 25% tariff.

In addition to the EU agreement to open their markets to U.S. products, private companies within the EU have committed to $600 billion in direct investment within the USA.  Additionally, the EU will purchase $750 billion in U.S. energy products and with the NATO commitments previously agreed significant military purchases are anticipated. That is a major purchase agreement of $250 billion each year for the next three years.

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Congratulations America!

Thank You President Donald J Trump, U.S. Trade Representative Jamieson Greer, Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick.

Enjoy the golf.

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The Marshall Plan is OVER!

Okay, this is a very big win.  EU Commission President Ursula von der Leyen outlines some more details of the U.S-EU trade agreement.  The parameters fall similar to the Japanese deal, without the banking aspect.

The EU will face (and accept) a 15% tariff rate for most exports to the USA including autos, that’s huge, even with some zero-for-zero tariff sectors outlined.  The primary motivating factor was to avoid the 35% tariff rate scheduled for August 1st and provide the EU corporations with certainty in their tariff rate as applied by the USA (15%).  WATCH:

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This is almost full acquiescence to President Trump.  WATCH THE VIDEO

Ursula has the sads.

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President Trump and EU Commissioner Ursula von der Leyen have apparently come to terms around the broad outlines of a U.S-EU trade agreement.

The EU will commit to purchasing $750 billion in energy products.  The EU will commit to investing $600+ billion in direct U.S. industries.  The EU will commit to purchasing their NATO military hardware from the USA ($500+ billion likely).  The EU will open up all markets to USA products without tariffs.  The EU and U.S. will both carry a 15% auto tariff for imports.  WATCH:

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I’m all about the broad outline described in the video above, but I also want to see the details.  If what President Trump said about all EU markets being open is accurate, it sounds like the Marshall Plan is over

Canada will not be happy; Europe gets a deal – Canada gets a cold shoulder.

Also, with U.K, Japan, ASEAN and EU trade agreements complete, President Trump is likely to begin focusing on the USMCA (Canada and Mexico) sooner than later.  Two bilateral trade agreements will likely replace the USMCA.

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While President Trump visits his golf courses in Scotland, he will also be conducting business on behalf of the USA by meeting with trade partners from both Great Britain and Europe.

This morning USA time, President Trump is scheduled to meet with EU Commission President Ursula von der Leyen, at approximately 11:30am ET.  Livestream Links Below:

UPDATE: Video Added

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President Trump announced on Truth Social a baseline tariff rate of 30% for both the European Union and Mexico.  Other sector specific tariffs still apply.

The EU rate is interesting in that the 30% rate is lower than the Canadian rate of 35%, yet the EU rate exceeds the current ‘chicken tax’ rate historically applied to imported SUVs and Trucks.  Strategically, the 30% tariff rate on Europe is a major incentive for various EU sectors to shift manufacturing into the USA.

Without a formal declaration of the end of the Marshall Plan, the reciprocity rate of 30% for all EU imports also equalizes the transatlantic trade benefit.  It will be interesting to see how the EU responds, given any retaliation could be added to the existing baseline.

Canada is currently trying to organize a trade agreement with the EU, in the hopes of positioning themselves toward the transatlantic group as they were toward the transpacific group (vis-a-vis China).

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CNN state media narrative engineers (think State Dept. in all things CNN) are running with a story to promote a new book by Josh Dawsey (Wall Street Journal – Author), Tyler Pager (New York Times – Author), Isaac Arnsdorf (Washington Post – Author) where they write about an audio segment by candidate Trump telling NY donors how he threatened Russian President Vladimir Putin and Chinese Chairman Xi Jinping.

The leaked audio is essentially unremarkable as President Trump has told this story several times. However, the background context is more interesting when we consider the motives of the WSJ, NYT and WaPo. Here’s the segment:

The WSJ is against President Trump based on economics; WSJ representing Wall Street. The NYT is against President Trump based on DHS/DOJ domestic opposition from within DC. The WaPo is against President Trump based on the CIA position and larger intelligence community. None of the motives within these outlets are challenged by the intellectually honest political observers.

So, what’s the play here?

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White House National Economic Chairman, Kevin Hassett, discusses the current status of the ongoing trade negotiations as the deadline for engagement windows is scheduled to close on July 9th.

As outlined by Kevin Hassett, we can expect those nations who are not in current negotiations will receive letters from President Trump letting them know that the baseline tariff rate (10%) and reciprocity rate (unknown) will be.  Large nations like India and China are currently in negotiations.  The EU collective has preliminary contact information, and a few others are in close proximity to Free Trade Agreement closure.

With the Big Beautiful Bill passed, in combination with baseline and reciprocal tariffs, the revenues to grow the GDP are in place to expand the overall U.S. economy.  WATCH:

[Transcript] – WEIJA JIANG: We turn now to Kevin Hassett. He is the director of the National Economic Council and one of President Trump’s top advisors. He’s also very popular on that driveway where I’m usually alongside about a dozen reporters. So, Kevin, thank you so much for your time this morning. I want to start with trade, because there’s a big deadline coming up on Wednesday. As you know, that 90-day pause on reciprocal tariffs that the President announced back in April is set to end. So far, the US has announced a few deals; the UK, Vietnam, and you’re inching closer to a final agreement with China. Do you expect to get any more deals done with America’s biggest trading partners by Wednesday?

KEVIN HASSETT: Yeah. First, I do have to take- take a pause and share your thoughts and prayers with the people of Texas. It’s an incredible, heartbreaking story, and Kristi Noem and the President have instructed the federal government to throw everything they’ve got at helping the survivors and helping clean up that place. So, anyway, I’m really heartbroken today to see these stories, and I want you to know that in the White House, everybody is putting every effort they can into helping the people of Texas today.

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The intransigent European Union is hitting a dead end with immovable Trump on the issue of tariffs.  The resulting dynamic is what we would expect given 75 years of the Marshall Plan (European Recovery Plan) as part of the EU’s only point of reference.

In order for the EU to maintain its socialistic form of government, it needs to continue the economic benefits from one-way tariffs that exploits the American consumer market.  President Trump’s plan to force reciprocity is against its entire economic foundation.  The EU simply cannot fathom life without the status quo.

In many ways the EU is in the same position as Canada. From its perspective, economic reciprocity is not sustainable; it would have to change its social compacts. This is the core of the conflict.

The EU trade delegation hit a brick wall in Washington DC, as the U.S. trade team reiterated the baseline tariffs are not something within the negotiation dynamic.

BRUSSELS — The European Union is weighing a provisional trade deal with the United States that would maintain a 10 percent tariff on most exports, the European Commission told EU ambassadors on Friday.

The EU executive reported back after a crucial round of talks in Washington on Thursday, in which Trade Commissioner Maroš Šefčovič sought to head off a threat by President Donald Trump to impose a 50 percent tariff on all European goods from July 9 if no deal is reached.

In addition to the baseline tariff, conversations would continue on providing relief to specific industry sectors such as cars, two national officials cited top Commission officials as saying.

The outcome fell short of expectations in European capitals after the Commission’s trade negotiating team had previously said the possibility of “up-front” tariff relief for some industries was under consideration. The U.S. levies 25 percent tariffs on cars and 50 percent on steel and aluminum. (read more)

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