Experts believe US-EU trade deal will have modest implications for Estonia
Estonian experts do not expect the 15-percent trade agreement between the European Union and the United States to have a significant impact on Estonia. The tariff is more likely to have an indirect effect, for example through the German economy.
According to Minister of Economic Affairs Erkki Keldo (Reform), the 15-percent trade agreement provides the initial stability that Europe needed. He does not foresee any major impact on Estonia.
"One positive aspect is that many strategic goods will have a zero tariff. But of course there is concern if some goods remain subject to higher tariffs, which could start to affect overall trade flows. However, as experts have noted, tariffs at this level are unlikely to disrupt global trade flows. For Estonia, the impact will likely be indirect at first — whether through the German economy or, for example, the Scandinavian economy — since our trade with the U.S. is still relatively limited. That said, there will definitely be certain product categories that will become subject to tariffs here as well," Keldo said.
SEB economic analyst Mihkel Nestor added that a 15-percent tariff is unlikely to be a serious burden for anyone in Europe. Since German cars and French wine are already seen as luxury goods that the average American consumer doesn't often choose, part of the tariff's cost can be passed on to consumers by raising prices.
"There's been some talk that we should have been more forceful in the spring — threatening retaliatory tariffs and so on — but what would that have led to? A long and bitter dispute. Considering that the European Union is very keen on the United States continuing to provide for Europe's defense, it seems to me that in the end, a sensible decision was made," Nestor said.
Although tensions between the U.S. and the European Union have eased with the agreement, Member of the European Parliament Jüri Ratas (Isamaa) believes that the relationship between the two sides remains turbulent.
"Europe has genuinely sought a zero-zero tariff solution and any alternative to that is, I think, a step away from what could be considered a reasonable — let alone ideal — outcome. Above all, Europe needs transatlantic relations where we make it clear that the U.S. presence should not diminish — I'm talking about defense policy in Europe, which Trump is aiming to scale back — as well as continued support for Ukraine. I think there are still plenty of contentious issues on the table," Ratas said.
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Editor: Marcus Turovski, Johanna Alvin
