The European Union dodged an imminent trade war with the US this week, but markets and a growing chorus of critics have dispelled early hopes that the deal will bring a sense of stability back to transatlantic relations.

Economists and observers have been quick to highlight discrepancies between the White House and the European Commission’s version of events.

Gulf equities were little changed in early trade on Tuesday as investors cautiously greeted a trade agreement between the U.S. and the European Union, while lacklustre second-quarter earnings weighed on sentiment.

U.S. President Donald Trump and European Commission President Ursula von der Leyen have announced a sweeping trade deal. It raises tariffs on most European goods to 15%.

Some European politicians are dismayed that the European Union did not drive a harder bargain, but facing the threat of a damaging trade war, officials say they had little choice.

President Trump met with top European officials demanding fairer trade with the 27-member European Union at his golf course on the Scottish coast.

Pact removes a major risk for markets and the global economy, given the transatlantic partners did $2 trillion worth of cross-border commerce in 2024.

German auto companies embraced greater clarity but warned that even the lower rate of tariffs agreed between Brussels and Washington would still hurt.