President Trump announced the U.S. and European Union reached a trade deal that includes a 15% tariff on imported goods and a promise by the EU to purchase $750 billion worth of American energy. Here's more on why the announcement is fueling investor optimism.

Financial District

The United States and the European Union have reached a framework trade agreement that includes significant provisions for American energy exports and reduced tariffs in select agricultural sectors. The EU has committed to purchasing $750 billion worth of U.S. energy, which is seen as a major win for the American energy industry. Some U.S. agricultural products will also gain easier access to European markets due to lower or zero tariffs.

However, the agreement raises tariffs on U.S. auto exports to the EU from 10% to 15%, which could impact consumers and the auto industry. Despite initial optimism, financial markets have responded cautiously, with little movement in major indices. Ongoing trade discussions with China remain a key focus for investors, with further developments expected.

U.S., EU trade deal fuels investor optimism

CBS News Money Watch correspondent Kelly O'Grady with us now with more developments on the economic front. Kelly. Good morning to you Monday Let's get to it. We've just heard the u.s. And the EU agreed to a framework deal, which they're touting as Successful, but if we really look into the details, do we have a reason to celebrate just yet? Well, if you are the American energy industry definitely because there is an agreement that the EU will invest 750 billion dollars or rather by 750 billion dollars worth of American energy. So think oil gas. That's a big win other sectors that are a big win is if the EU opens up its Trade to US companies with zero tariff and there are specific areas where we do know that that's gonna happen The details haven't been released, but we do know some agricultural areas will be able to sell into the EU more easily So those are wins that being said if you're the auto industry, right? You're gonna see a 15% tariff if you're US consumers that tariff that sits at 10% is now going to be 15% that's gonna be hard for companies to Absorb without passing at least some of it on to the consumer and I think that's why you're seeing in the markets just kind of Pretty much nothing Yesterday when I heard this and sort of all of the excitement from both sides I would have expected the markets to be very much up, but you can see the Dow is pretty much flat right now that's interesting because You could also say that hey 15% tariff level is better than 30% It's almost like glass half-empty half-full kind of question And we do have talks between the US and China in Stockholm ahead of an August 12th deadline So if the markets are effectively shrugging this off at this point, what does this tell us about the president's tariff threat strategy? Has it kind of weakened now that people realize at the end of the day the u.s Will make some type of agreement where the devil will be in the details not to panic Well, you know with this particular framework with the EU I actually think that the US from what we know is coming out on the better end of things in terms of the investment I also know a lot of European countries weren't necessarily happy with it. Remember you got 27 nations You got 27 different interests and and industries that they focus on China's really gonna be the big one though And we do see that deadline keep getting pushed out. I was just listening to US trade representative Jameson Greer He was on CNBC talking saying that there's probably not gonna be a lot of movement It's gonna be more monitoring this time around. So with that one particularly, I think investors are just sort of watching and waiting Yeah Alright positive development that we have a framework with the largest trading partner of the u.s Kelly matching the colors Great to see you

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