US/EU trade dispute far from over as US effective tariffs spike to 19%

The ongoing negotiations between the European Union (EU) and the United States (US) aim to formalize the tariff agreement reached on July 27. Although initial tariffs on US imports were set, the Commission published a regulation on August 5 suspending these measures for six months to allow for further negotiations. President Trump's executive order signed on July 31 introduces a minimum blanket tariff of 15% on EU goods with a duty rate below this threshold, while those already exceeding it remain unaffected. This order does not detail the supposed exemptions. The baseline tariff took effect on August 7 with an exemption for goods already in transit or warehoused until October 5. At the same time, some goods face heightened scrutiny. President Trump also announced that he will initially impose a "small tariff" on pharmaceuticals and will increase it to 150% and then 250% within a year to a year and a half. Reactions from European leaders reflect a mix of relief and frustration calling for more clarity and fine tuning. Recent trade statistics reveal significant fluctuations in US-EU goods trade, exacerbated by the indirect impact of tariffs. While immediate data show a reduction in the US trade deficit, long-term trend indicates persistent challenges.