Overview

• The preliminary framework swaps threatened 30% duties for a 15% tariff but must still be codified into binding legal text and win EU legislative approval.
• Paul Krugman labeled the agreement a “sham” on a New Republic podcast, arguing there is no real quid pro quo for U.S. consumers.
• Krugman warned that U.S. businesses will pass the tariff costs onto shoppers, effectively turning it into a nationwide sales tax.
• Analysts say lower-income households will suffer disproportionately because they spend a larger share of their income on the goods hit hardest by the levy.
• When combined with proposed tax cuts for high earners, the tariff package amounts to an upward redistribution of income from those least able to absorb the added costs.