- The EUR/GBP rises as the euro is strengthened after the extension by the EU of its suspension of reprisal measures against US tariffs.
- President Trump imposed a 30% tariff on imports from the European Union and Mexico.
- The sterling pound has difficulties since the disappointing GDP data from the United Kingdom have reinforced the expectations that the BOE will apply a rate cut in August.
The EUR/GBP extends its profits per second consecutive session, quoting around 0.8670 during the first European hours on Monday. The crossroads gains land as the euro (EUR) receives support after the announcement of the European Union (EU) on Sunday that it will extend its suspension of countermeasures to the tariffs of the United States (USA) until the beginning of August, with the aim of seeking a negotiated agreement.
On Saturday, US President Donald Trump announced a 30% tariff on imports from the European Union (EU) and Mexico as of August 1. Trump also proposed a general tariff rate of 15%-20%on other commercial partners, an increase with respect to the current base rate of 10%.
German Chancellor Friedrich Merz expressed a strong commitment to ensure an agreement, warning that a 30% tariff would affect “the core” of the German export economy. Von der Leyen added that the EU anticoercive instrument, which allows robust countermeasures, is still out of the table for now, stating: “We have not yet reached that.”
Italy’s Foreign Minister Antonio Tajani declared on Monday that if an agreement with the US is not concluded, the EU has already prepared a list of retaliation tariffs for an amount of 21,000 million euros against the US ECB I should consider a new QE and feature program before US tariffs.
He EUR/GBP It also receives support since the sterling pound (GBP) faces challenges after the publication of disappointing data of the Gross Domestic Product (GDP) of the United Kingdom (UK) and data from May Factories. The decrease in economic activity has strengthened market expectations that Bank of England (BOE) could reduce rates at the August policy meeting.
Tariffs – Frequently Questions
Although tariffs and taxes generate government income to finance public goods and services, they have several distinctions. Tariffs are paid in advance in the entrance port, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, while tariffs are paid by importers.
There are two schools of thought among economists regarding the use of tariffs. While some argue that tariffs are necessary to protect national industries and address commercial imbalances, others see them as a harmful tool that could potentially increase long -term prices and bring to a harmful commercial war by promoting reciprocal tariffs.
During the election campaign for the presidential elections of November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy. In 2024, Mexico, China and Canada represented 42% of the total US imports in this period, Mexico stood out as the main exporter with 466.6 billion dollars, according to the US Census Office, therefore, Trump wants to focus on these three nations by imposing tariffs. It also plans to use the income generated through tariffs to reduce personal income taxes.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
