A tariff simulator shows a dramatic drop in global exports to the U.S. as a result of President Donald Trump new trade deal with the European Union.
On Sunday, Trump announced a trade deal with the EU, following discussions with European Commission President Ursula von der Leyen. Trump said that the deal imposes a 15% tariff on most European goods to the U.S., including cars.
According to the Tariff Simulator by the online data visualization and distribution platform, The Observatory of Economic Complexity (OEC), the forecasted global exports to the U.S. in 2027 are expected to drop by more than 46% compared to the average of the last three years, or $2.68 trillion. The forecasted U.S. exports to the world in 2027 are expected to increase by 12% compared to the average of the last three years, or $1.59 trillion.
The forecast builds on an extended gravity model designed to anticipate how trade may be reconfigured in response to the announced trade deal between the US and the EU alone. This forecast does not include the impact of all the broad tariff increases set to be imposed on Aug. 1.
“While the U.S. is imposing tariffs on the world, the world is not imposing tariffs on each other,” explained Cesar Hidalgo, economics professor at the Toulouse School of Economics, director for the Center of Collective Learning, and founder of Datawheel, which built the OEC Tariff Simulator.
