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Investing.com -- The significant increase in U.S. trade tariffs on European Union member countries will not lead to immediate sovereign rating downgrades, though it may add to existing pressures, Fitch Ratings stated on Tuesday.
Ed Parker, one of Fitch’s leading sovereign analysts, explained that the U.S.’s baseline tariff of 15% on imports from the EU aligns with the rating agency’s assumptions since March and therefore does not "materially shift" their economic forecasts.
Despite this alignment with expectations, Parker noted that the 15% rate represents a substantial jump compared to the 1.2% rate applied last year.
"We don’t expect the increase in the tariff rate to directly drive EU rating changes on its own, but it could compound existing credit pressures," Parker told Reuters.
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