My guess is that EU might not care about it. The impact of section 899 is mostly on the dollar system (because treasury have historically been exempt from withholding, adding some tax adds a lot of friction to the USD-based financial system which was very scary, the amount of things that rely on short term USD debt flowing around is huge) and likely some reduction on US-based investments from foreign investors.
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Based on the negotiation approach, I hope that Switzerland will land closer to the UK, while EU gets something like China. But, yeah, hard to predictâŠ
Actually UK has trade deficit while CH has trade surplus. Thatâs why I was thinking CH might be âpunishedâ more
Tariffs story is getting more interesting
Japan deal announced
15% tariffs on Japanese imports into US.
No changes on tariffs from Japanese side for US imports. Some restrictions removed.
They said something about Japanese investments in US but I think this is what was already in plans.
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India - US , No Deal , no more talks this month. More talks in Aug
because US wants same one sided deal like Vietnam & Indonesia.
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Letâs see what happens with EU.
I observe that BICS countries so far has been toughest.
Does anyone understand what exactly Japan has agreed for this 550 B uSD investment
Based on what Howard Lutnick said. Letâs say US want to have a plant in US, Japanese will finance it and then give the plant to local operator. And then the profits from this local operation will stay 90% in US.
If 90% profits from investments would be staying in US, does it simply mean that Japan has agreed to pay cash to US to get a lower tariff rate.
To me it doesnât make much sense. Thus I think maybe it means something else.
This is what Perplexity thinks. It seems like a theorhetical âmaybe, somehowâ investment with a twist, but for sure there is price increases in the US paid by Average Joe.
The Reality: Investment vs. Tariffs
Investment Side
The public statements describe a $550 billion âinvestmentâ from Japan, but no official documentation or concrete details have been made public about how this investment will be structured, what sectors it will involve, or whether the figure represents direct financial investment, state bank loans, or other forms.Some financial reporters note the $550 billion figure appears to be an upper limit for potential Japanese government-backed loans, guarantees, or commitments that are not the same as immediate cash investment.
Japanese officials and independent analysts have not confirmed this as a direct cash infusion or physical project investment. The exact natureâwhether foreign direct investments (FDI), project finance, or new corporate headquartersâremains unclear.
Tariff Side
What is clear: the U.S. government will now impose a 15% tariff on goods imported from Japan, replacing higher rates that were previously threatened.Tariffs are import taxes paid by U.S. importers, not by Japanese exporters or the Japanese government. These costs are typically passed on (at least in part) to American consumers and businesses who buy these goods.
Thereâs no evidence that tariff revenue collected by the U.S. Treasury is then earmarked or redirected as âinvestmentâ by Japan in any formal sense.
Analysts and trade experts view the 15% tariff as a conventional tax that increases the consumer price of Japanese goods in the U.S.; it is not itself a Japanese investment.
Looks like deal similar to Japan: Client Challenge
Isnât it what Switzerland has with the EU? Itâs called âcohesion paymentsâ or something like that.
CH gets full market access (for EU countries budget is mostly funded with VAT)
Itâs a flat-fee tariff, essentially. But thatâs not a 2025 news.
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EU reached deal with US. 15% tariff.
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oh great. my hedges/shorts will be trash 
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I find it interesting that EU promised to invest 600 billion USD in US to avoid a tariff of 30% on annual export of 600 billion which doesnât even include Pharma (135 B) â Steel etc. What is the advantage of this ?
Wouldnât it be better to simply have 30% tariff and invest that 600 B in Europe?
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None of it is binding. The investment could just be buying stuff you would have bought already anyway, or loans, or up to 600 billions (but not 600 billions). See what is happening with the JP deal where nobody really knows what it means and US/JP have very different interpretations.
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You can avoid higher tariffs for now and kick the can down the road until Trump is gone.
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Yes. I would like to see the details.
I think 15% was expected. But with so many carve outs, it seems the deal is following
- Trade to be balanced using Defence & Energy imports from US .. I think the number quoted is a number for more than one year and not annual.
- 15% tariffs on approx 75% European goods exports to US (assuming Pharma & metals account for 25%)
- EU tariffs on US goods remain unchanged
So most likely green day tomorrow? What do futures say?
Not much yet (0.33% for S&P) . I think 15% was choreographed already.
But maybe US oil & gas companies can pick up tomorrow and also EU exporters slightly
Looks like EUâs investment commitment (200 B per year during trump term) and purchase commitments (250 B per year) are the biggest cause of anger in EU about US trade deal.
EU only bought 85 B USD worth of energy products last year. Is it even possible to get to 250 B USD per year?
And with respect to investments , if EU cannot control who invests in US, how were they able to make pledges?
I am wondering if EU need to tone down these commitments and only focus on tariffs. Or else this deal might not get passed by member states
For context there was around 435B USD of energy product imported in 2024. (So almost 60% would have to come from US, and thats assuming that energy import doesnât start shrinking with electrification)
Yeah they mentioned itâs not legally binding itâs just what some EU companies are planning. Just the kind of stuff thatâs often enough for Trump.
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