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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The Japanese essentially did not want to face a 25% tariff on automobiles exported to the USA.  At the same time, they did not want to permit full USA access to several sectors of their market.  The solution is quite remarkable.

Japan agrees to be the bank, to essentially finance any national security priority of President Trump to the tune of $55o billion.  In return, Japan gets a 15% tariff on automobiles, and 10% return on the profit of the ¹business they finance in the U.S.  Japan is essentially purchasing a lower tariff rate.

PRESIDENT TRUMP – “We just completed a massive Deal with Japan, perhaps the largest Deal ever made. Japan will invest, at my direction, $550 Billion Dollars into the United States, which will receive 90% of the Profits. This Deal will create Hundreds of Thousands of Jobs — There has never been anything like it. Perhaps most importantly, Japan will open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products, and other things. Japan will pay Reciprocal Tariffs to the United States of 15%. This is a very exciting time for the United States of America, and especially for the fact that we will continue to always have a great relationship with the Country of Japan. Thank you for your attention to this matter!”

Commerce Secretary Howard Lutnick explains:

EXAMPLE:  President Trump wants generic drug manufacturing in the USA.  U.S. company ‘Main Street Drugs’ agrees to build a $100 billion manufacturing plant.  Japan finances the building and company creation.  Main Street Drugs owns and operates the business, keeps 90% of the profits, Japan gets 10%.

Trump (USA) has $450 billion in financing left to spend on the next priority, perhaps a railroad connection or transit system.

Pretty cool, solution.

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I’ll repeat it as much as needed, until it sinks in.

The U.S-Canada trade deal status is simply a no-brainer. President Trump will answer questions about Canada and tariffs, he’ll put people into seats to discuss trade with the Canadian delegation, and he’ll give every outward appearance of being favorable to Prime Minister Mark Carney…. BUT…

In the background, Trump is simply waiting for the USMCA timeline to trigger a renegotiation. President Donald Trump is ambivalent to the trade partnership with Canada. This moot-status reality is why there’s no substantive engagement.

‘No deal’ -until USMCA redo- is a win for President Trump.

For some bizarre reason that I simply cannot fathom, almost every Canadian politician seems entirely oblivious to this reality. Instead, Canadian Trade Minister Dominic LeBlanc and Mark Carney’s chief-of-staff, Marc-André Blanchard are once again coming to DC to ride their bicycles in slow circles at the bottom of the White House driveway while staring in the windows.

An article in Politico notes the Canadian premiers are now accepting the August 1st deadline will pass without any agreement, and the 35% reciprocal tariffs on non-USMCA products (meaning a lot of stuff) is going to trigger.

Literally, everything from Canada that has a non-USMCA component is going to be tariffed. Think about all the stuff from China, Asia (writ large) and Europe that Canada assembles for finished goods. All of that stuff will be subject to the tariffs.

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In 2018, Canadian Prime Minister Justin Trudeau relied heavily on House Speaker Nancy Pelosi for assistance when the U.S. and Mexico constructed the majority of the USMCA trade pact.  Today, Canadian Prime Minister Mark Carney takes the same approach.

[SOURCE]

PRESS RELEASE – “Today, the Prime Minister, Mark Carney, met with a bipartisan delegation of United States senators in Ottawa. The Senator for Oregon, Ron Wyden, the Senator for Alaska, Lisa Murkowski, the Senator for New Hampshire, Maggie Hassan, and the Senator for Nevada, Catherine Cortez Masto, were present.” (more)

The 35% tariffs against Canada are scheduled to go into effect on August 1st.

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Well, what do you know?   An interesting article about Canada suddenly proposing to put limits on the amount of Chinese steel and aluminum they import.  Although missing in the article is a reference to what this means about the prior process that did not have such limits.

Essentially, if you drop the pretending within the Wall Street Journal/MSM narrative, the decision by Mark Carney to limit Chinese Steel is a direct admission of their knowledge to a preexisting level of imports that violated the USMCA and all previous demands to block imports of Chinese steel.

Trump always said Canada was a transnational shipper and entry into the USA.  Trudeau and Carney previously denied this was the reality.  Well, if that wasn’t the reality, then why the need to change? I digress.

OTTAWA—Canada introduced limits on how much foreign steel produced in countries other than the U.S. and Mexico can be imported, as the Liberal government tries to help a domestic sector reeling from President Trump’s 50% tariffs on Canadian steel.

Prime Minister Mark Carney said Wednesday that the series of import limits and the tariffs targeting steel products with Chinese links are required because the Canadian economy has been too reliant on foreign steel to meet the needs of the construction and manufacturing sectors. He cited data indicating that two-thirds of total steel consumption in Canada comes from abroad, compared with one-third for the U.S. and one-sixth in Europe.

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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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