European leaders and businesses are hard at work finding new markets to counter reduced exports to the United States (US) in the wake of tariff hikes.
Trump tariffs potentially threaten €544 billion (R11 trillion) of EU exports to the US, which have been hit with a blanket 15% tariff hike.
This is half the 30% tariff previously announced by Trump.
As part of the deal, the EU has committed to procuring US liquefied natural gas, oil and nuclear energy products with an expected offtake valued at €700 billion (R14 trillion) over the next three years.
This will contribute to replacing Russian gas and oil on the EU market.
The EU has also committed to purchasing €40bn (R828bn) worth of AI chips essential to maintaining the EU's technological edge, according to a statement by the European Commission.
The Trump tariffs will affect exports in key EU sectors such as automobiles, luxury goods, pharmaceuticals and agricultural products.
A 25% tariff on vehicles and vehicle components was reduced to 15% as part of the deal, which will make them more competitive than vehicles sourced from South Africa which are subject to a 30% tariff.
With the dramatic changes in what was a growing market, EU exporters are looking for new customers, which will put them in competition with those from other countries, such as South Africa.
- Read the full report in our Freight Features edition on “Europe”, out on August 29.
