European stock market showed muted reaction to new US tariff rates

US President Donald Trump announced higher tariff rates for 14 trading partners effective August 1. However, global markets’ reaction to these changes was muted, CNBC says. 

European stocks rose in the trading session after Trump’s comments. This result may be attributed to confidence that a US-EU deal will be reached. The agreement would avert 20% import duties that the White House planned to impose on the bloc's goods.

Markets expect levies to be set close to the current US effective tariff rate of 15%, UBS notes.

A European diplomat told CNBC that the EU could receive notice of higher import duties from Trump later this week. It gives the bloc more time to hammer out a framework agreement with the White House that includes a 10% baseline tariff and exceptions for some goods.

Additionally, Toni Meadows of BRI Wealth Management claims that investors have already priced in the low probability of trade deals being struck before the July deadline. However, things could change as the impact of duties is reflected in economic data, he adds.