US President Donald Trump has finally signed the long-awaited customs agreement with the European Union (EU). Instead of the hefty 30% tariffs expected to take effect on August 1st, the parties agreed on a flat 15% tariff rate. This development not only helped prevent global trade wars but also ignited financial markets and cryptocurrencies.
Following the agreement's announcement, the S&P 500 index surpassed the 6,400 level, moving one step closer to its all-time high. Around the same time, Bitcoin (BTC) surpassed $120,000, a level it hadn't surpassed for nearly two weeks. However, the leading cryptocurrency remains below its all-time high of $123,080.
US and EU reach agreement
The agreement, announced after a meeting between Trump and EU Commission President Ursula von der Leyen in Turnberry, Scotland, could herald a new era in the global trading system. The parties agreed to a flat 15% tariff instead of tariffs that could have reached as high as 30%. However, products such as aircraft parts, some chemicals, and pharmaceuticals were excluded from this tariff.
Trump also announced that the EU will purchase $750 billion in energy from the US over the next three years and pledge an additional $600 billion in investments. These investments include defense equipment. Von der Leyen emphasized the importance of the agreement, saying, "This is not just a trade agreement; it is a step toward restoring geopolitical balance."
Markets soar: Stocks, Bitcoin, and altcoins rally
The announcement of the agreement revived risk appetite in global markets. Dow Jones futures jumped 180 points (approximately 0.4%), while Nasdaq 100 and S&P 500 futures rose 0.4% and 0.3%, respectively. US stock markets, which had already closed strong on Friday, started the week positively with this development. Looking at the top 10 cryptocurrencies, Bitcoin and Ethereum (ETH) also joined the rally, rising 3% to above $3,850. BNB tested its all-time high of $825 following the news and surpassed Solana to become the fifth-largest cryptocurrency again.
Gold steady, Europe on hold
Following the developments, gold, considered a safe haven, traded flat at $3,335. European markets saw less activity. Major indices like the German DAX, the French CAC 40, and the Spanish IBEX 35 saw no significant change. However, Italy's FTSE MIB rose 0.3%, and Sweden's OMXS30 rose 0.23%.
Many EU leaders cautiously welcomed the agreement. German Chancellor Friedrich Merz stated that it was a significant development for the automotive sector, while the Dutch and French commented that "lower tariffs would be better." Italian Prime Minister Giorgia Meloni said that this agreement "prevents direct conflict across the Atlantic."
