With the EU reportedly close to striking a trade deal similar to the one officials agreed with Japan this week, the final tariff landscape is becoming clearer. Both appear to have settled on a 15% reciprocal tariff – above the 10% baseline we had assumed most countries would face, except China which we estimated would face a higher rate of around 40% – but seem to have secured concessions on auto tariffs, which we had expected to stick at 25%. The upshot is that our assumed eventual effective tariff rate remains at 15%.
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