The US and EU reach a trade deal: Why it’s a good sign for Ukraine.

The US and the EU have agreed on a trade deal that will impose a 15% tariff on most EU exports, including cars, semiconductors, and pharmaceuticals, starting August 1. To replace Russian energy, the EU agreed to buy $750B in US energy products, invest an additional $600B in the US, and purchase “vast amounts” of military equipment, said Trump. The energy agreement aims to reduce European reliance on Russian energy and deprive Moscow of billions of dollars to fund its war efforts.

Additionally, the increased purchase of American weapons will allow Kyiv to receive more military aid to defend itself against Russia and withstand the daily attacks on civilian cities. The deal also eliminates tariffs on certain strategic goods, such as aircraft and parts, some chemicals, semiconductor equipment, and specific agricultural products. However, tariffs on European steel and aluminum remain at 50%, while aerospace products are temporarily exempt. Overall, financial markets reacted positively, with S&P 500 futures up 0.4%, and European stock futures up 1%. The euro strengthened against the dollar.