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Investing.com - European semiconductor stocks rose in early trading on Monday after the U.S. and European Union reached a weekend deal to avert a potentially damaging trade war.
Regional chipmakers like ASML (AS:ASML), ASM International (AS:ASMI), STMicroelectronics (EPA:STMPA), BE Semiconductor (AS:BESI) and Infineon (ETR:IFXGn) all gained more than 2%.
The United States and European Union reached a landmark trade agreement that includes a 15% tariff on EU goods entering the U.S., President Donald Trump announced Sunday. The tariff applies to a wide range of items, including semiconductors and pharmaceuticals.
However, there are some exceptions, such as a 50% levy on steel and aluminum that will remain in place.
The broad-strokes deal encompasses significant EU purchases of U.S. energy and military gear, along with substantial investments in the American economy.
According to Trump, the European Union has committed to purchasing $750 billion worth of energy from the United States. He also stated that the EU has agreed to make $600 billion in investments in the U.S.
"They are agreeing to open up their countries to trade at zero tariff," Trump told reporters. He added that the EU would "purchase a vast amount of military equipment" from the U.S.
European Commission President Ursula von der Leyen confirmed the agreement would include 15% tariffs across the board, noting that this measure would help "rebalance" trade between the two major trading partners. Of the $3.3 trillion in goods imported by the U.S. last year, more than $600 billion came from the 27-member EU.
The pact could help bring some calm to investors, who had been wary that both sides could fail to reach a deal before August 1, when Trump’s sweeping "reciprocal" tariffs are due to come into effect. The EU had been facing heightened levies of 30%, and had reportedly been pushing for a zero-for-zero agreement with the White House.
"While the deal has avoided a much worse outcome for now, it remains to be seen whether it will last," analysts at Capital Economics said in a note to clients.