Customs duties: What will be the possible impact on consumers in Europe?
The prices of European products are likely to rise in the United States. Conversely, the trade agreement should not cause inflation in Europe, as the EU has not introduced counter-tariffs on American products.
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00:00What impact will the trade agreement between the European Union and Washington have on European households and businesses?
00:09Most European products exported to the United States will be taxed at 15% from 1st August.
00:15But residents of Brussels say they aren't so worried about their purchasing power.
00:19I think tariffs are counterproductive. I prefer free trade. And I think it's self-damaging to the Americans to bring in tariffs on anybody and everybody.
00:31I think the EU depends a lot on the US in many ways. We should probably become more independent and develop our own economic strategies more independently from the US.
00:42In the short term, the impact of US tariffs on European consumers should be limited.
00:50European consumers is going to be limited. And why is that? Tariffs or duties are paid by the importer.
00:57In this case, this 15% tariff that the US is imposing on EU products apply to the American importers.
01:11So that means that certain things might become more expensive for the American citizens.
01:19In the long term, Chinese products currently exported to the US could find their way to the European market, which could lead to lower prices in Europe.
01:26The primary effect will be less demand for European products in the US and less demand for Chinese products in the US.
01:31And that means that these products will then try to look for a market in Europe, which generally will lead to lower prices.
01:37European companies exporting to the US are likely to face a drop in demand on the other side of the Atlantic, which could lead to a decline in their revenues and potentially jobs in Europe.
01:46US President Donald Trump hopes that foreign companies will be encouraged to open factories in the United States to avoid paying tariffs.
01:53However, concerns around Trump's predictability and the uncertainty surrounding the duration of these tariff barriers could conversely discourage European companies from investing in the United States.
