The EU was hit with a 30% tariff effective August 1 over the weekend.

EU's trade chief Sefcovic on the trade talks with the US does not sound all that optimistic saying:

  • It takes two hands to clap.
  • Plan to confer with US counterparts later on Monday on state of play
  • Believes there is still potential to continue US trade negotiations

President Trump is walking a fine line with his belief that inflation will remain contained despite the imposition of broad trade tariffs. At the same time, he’s touting the fiscal benefits of those tariffs, which are filling Treasury coffers with what he views as long-overdue revenue. Trump has made it clear that he’s enthusiastic about the financial windfall, often emphasizing the inflow of funds with characteristic flair.

The strategy appears to be one of maintaining tariffs at relatively high levels—perhaps slightly below the “Liberation Day” rates, but still close enough to exert leverage. This leaves room for countries to negotiate lower rates, yet the underlying message remains that there will always be some cost for access to the U.S. market. In Trump's view, trade has been imbalanced for decades, and the new tariff regime is a way of evening the scales.

He’s also reframing tariffs not merely as punitive measures, but as a kind of tax for doing business in the United States. This tax, he argues, should be paid by foreign companies that benefit from access to the American consumer. The only way around it, according to Trump, is for those companies to fully produce and sell their goods within the U.S.—a move that would eliminate imports and, with them, the tariffs.

By the way, he is done with defense for free to defend democracy. Having countries support NATO, he will be happy to defend democracy by selling defense to NATO.

Source: Forex Live