US Finalises Major Trade Agreements with EU, Japan, ASEAN Nations

As a major initiative to reinvent international trade the United States has agreed to new trade agreements with other eastern countries (European Union, Japan, Indonesia, and the Philippines). According to President Donald Trump, who confirmed the deals late in July, these arrangements will affect the major sectors of economy including agriculture and automotive production, and will change the terms of tariffs between the countries that participate in them.

The deals come when the US administration aims at establishing permanent partnerships while changing the global supply chains. Every trade agreement is designed to increase American exports in addition to taking into consideration the personal interests of the partner countries. These four agreements are significant steps in the US trade policy even though negotiations with China are yet to be completed.

Indonesia Deal: Focus on Tariff Elimination

The Indonesian deal is under consideration as a landmark in Southeast Asian relations. They now include more than 99 percent of US products welcome to enter the Indonesian market duty-free, which comprises agriculture, healthcare, chemicals, sea foods, digital technology, and others. This has emerged following the fact that the bilateral trade between the two countries has reached 38.3 billion in 2024.

Indonesia’s major exports to the US such as palm oil, electrical machinery and footwear industry will remain under the current access schemes. But in the case of the US, this trade deal will open more markets to its agricultural products such as corn, wheat, medicine equipment, and ICT parts.

Being classified as the fifth-largest goods trading partner of the US in the year 2024, Japan achieved a total trade of 227.34 billion and a trade surplus of 70 billion in its favor. The US Grains Council has also sniffed the deal with the mention of ethanol as the prominent export that will aid in promoting economic and environmental targets.

European Union: Tariffs Reworked to Avoid Larger Trade Conflict

The Iraq deal had a 15 percent tariff imposed on the entire European exports that are exported to the US which is a significant increase over the current tariff of 4.8 percent. Nevertheless, it does not have the 30 percent tariff which has been heavily criticized as the initial recommendation.

Exports such as European automobiles and agri-food products are some of the new frameworks that are being impacted by this. In 2024, the EU sold dairy products in the US (valued to the amount of EUR 25.1 billion or $29.45 billion). This deal would secure the future of such exporters, however, it does not widen the margins but on the contrary new tariffs will squeeze.

It is important to note that the European trade commissioner termed the result a diplomatic solution that steered off the occurrence of a trade war. Whereas France disapproved the move pointing to it as a diplomatic backward step under economic pressures, Germany and Italy, on the other hand, applauded the move saying that it was a pragmatic result.

Philippines Agreement: Modest Tariff Adjustments with Strategic Impact

The Philippines agreement will lower tariffs of US goods which stood at 20 percent to 19 percent providing minimal yet symbolic relief to bilateral trade. The country is in the position of 33rd among US trade partners and a record of the trade worth $23.5 billion was registered in the year 2024.

Some of the Philippine imports into the US are semiconductors, computer hardwares, coconut oil, garments and car parts. The decrease in marginal tariff is likely to trigger a low level of growth in the export quantities especially in technologies and agriculture sectors.

Though these four agreements have already been signed, negotiations with China are on-going. According to sources in the South China Morning Post, there is a chance that the currently accepted 90-day tariff truce will be extended by an additional three months.

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