Trade Spotlight: U.S Forges Deal Framework With EU, Begins New Talks With China 7/28/25

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Jim Cramer (1:02)

It's Jim Cramer here. You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action.

Carl Quintanilla (1:10)

Good Monday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer and David Faber at post nine of the New York Stock Exchange. Market does welcome this trade framework with the EU as we get set for one of the busiest weeks of the year. A Fed decision, a jobs number, GDP, PCE, and 38% of S&P market cap reporting earnings. Our roadmap begins with the president announcing that trade deal with the EU. The focus now shifts to China. We will go live to Sweden on the trade talks between the two sides there.

David Faber (1:37)

And as Carl just said, it is a big week for the markets. We have that rate decision coming as Chair Powell faces growing pressure to cut rates. And it is the busiest week of earnings season. Meta, Microsoft, Apple and Amazon will all report their latest quarterly results.

Carl Quintanilla (1:51)

Let's begin with this new trade framework between the US and the European Union. According to both sides, most goods from the EU will face a 15% US tariff, exceptions for some key industries. The president says the EU will not impose a tariff on US imports. Some eye-popping numbers, Jim, on the amount of energy, for example, that the EU is said to seek to buy over the next three years.

Jim Cramer (2:13)

Yeah, I mean, look, it just presumes that the war is going to end. It presumes that they're going to have to have a steady stream of natural gas. It presumes that we are going to be their supplier. And they're on the hook to us.

Do not get these moves, and the moves are extraordinary for Schneer, unless they now have a market that is going to be insensitive. Maybe they get long-term contracts, as opposed to just the piecemeal South Korea, piecemeal China. So it's very bullish. And I mean, should you take a PQT, I mean, well, it's a natural gas company. But you know, David, here's what I think happened here. We dodged a trade war. It's good to dodge a trade war.

David Faber (2:53)

Yeah, I think that's fair to say at this point. Certainly the EU has been a real concern. Now, China is yet to come. And we'll see in Canada. Mexico still remains an unknown to some extent. But without a doubt, the EU very important and seemingly preliminarily resolved. Right. 15 percent. You know, I do wonder, Jim, when we start to think about what seems to be It's funny, Chris, Carl asked Lutnick about this last week. Is 15 percent kind of sort of the new normal? How should we view that? Is it a consumption tax? Is it a value added tax? Is it being borne by all the different parties and won't be completely a 15 percent increase on goods in that way? And for the US consumer. But at the same time, it is raising revenue.

Jim Cramer (3:39)

It's raising revenue.

David Faber (3:40)

I'm just trying to understand as we step back and start to see 15 percent across the board, which seems like a likely outcome at this point.

Jim Cramer (3:48)

What's this kind of weird number where it looks to me that people are not eating it. The manufacturer is taking it and just saying, okay, listen, our profit margin is going to be down, which is very bullish for the stock market because we don't want the consumer to be weaker. Now, there is, I think, a lot of ideological writing about this, which is the consumer is really going to suffer. I'm not buying that. 15% is eaten by the, you know.