Chennai, Aug 18 (UNI) Many of the deals that several countries have entered into with the US to avoid higher import tariff are symbolic and may not actualise, said Moody’s Analytics.
In its commentary titled `A Summer of Trade Deals’, Moody’s Analytics has said instead of retaliating against US hiking up its import duties many countries have promised to increase their purchase of American goods or make investments in that country.
“The feasibility of these plans is in doubt, and several deal components look largely symbolic,” Moody’s Analytics said.
Citing the European Union (EU) that has promised to buy $750 billion in energy products by 2028, and significant amounts of defence goods, Moody’s Analytics said: “It is simply not possible for the EU to purchase this amount of energy from the US.”
“Assuming imported volumes and values stay approximately the same as in 2024, not only would the EU have to more than triple its yearly purchases of the US’s energy goods—ultimately sourcing more than 85% of its total energy imports from the US—but it would probably have to buy the U.S’ entire energy export capacity. And, at current market prices, it would still fall horribly short, with total US energy exports totalling only around $170 billion in 2024,” Moody’s Analytics said.
Countries like Japan and Indonesia have committed to purchase Boeing aircrafts worth $150 billion and $50 billion respectively.
“The average value of a Boeing Dreamliner is about £300 million, which means that Japan would have to buy 500 such planes and Indonesia 166.
According to its website, Garuda Indonesia currently operates a total of 210 aircraft of different sizes,” the report notes.
The investment pledges stretch the imagination even further.
“The EU has committed to invest an additional $600 billion in the US over the next three years, while Japan will invest $550 billion and South Korea $350 billion. The enabling mechanism for these investments is not clear, especially if these investments are to come from the private sector,” Moody’s Analytics said.
According to the report, the hike in US import duties will lead to lower growth rate in Asia and in Europe but a recession is not on the cards. Most deals are non-binding, and chances remain that there will be higher tariffs further down the line.
Investment pledges from partner countries appear largely unrealistic and lack clear implementation mechanisms. Despite the deals, tariff rates have risen since mid-2025 and are expected to remain elevated throughout President Donald Trump’s term, the report said.
