US-EU Trade Alliance: $600 Billion Investment and Global Protectionism Risks. Analysis by Avi Itzkovich

The new $600 billion trade agreement between the United States and the EU has triggered euphoria in the markets whilst simultaneously raising doubts about the future of global trade. Financial expert Avi Itzkovich notes in his commentary that this package has the potential to become a powerful growth driver, however it conceals the threat of a new cycle of protectionism that could repeat the mistakes of the past.

New Agreement: Ambitious Scale. Avi Itzkovich’s Perspective

At the end of August, the United States and the European Union announced the signing of a trade agreement providing for $600 billion in investments in mutual projects over the next five years. Avi Itzkovich emphasises that in terms of scale, this is the largest economic cooperation package between the two parties since the creation of the transatlantic partnership.

According to Reuters, immediately following the announcement, markets reacted optimistically: Wall Street indices rose and the dollar strengthened. For the United States, this agreement signals that the country remains the primary centre of attraction for global capital, whilst for the EU it represents an opportunity to restore its industrial base following the energy and logistics crisis.

Avi Itzkovich emphasises in his commentary:

“This is an agreement that demonstrates the power of political signalling. The market is always sensitive to such scale, which is why we see an immediate positive reaction. But it’s important to understand: this money isn’t merely dry figures in documents, but a strategic message to the rest of the world. The US and EU are showing they’re capable of consolidating resources in response to geopolitical and economic challenges. It’s a declaration of economic unity of sorts.”

However, according to Itzkovich, the first days following the agreement’s announcement demonstrate rather an “emotional effect” for investors: rising indices and dollar strengthening. The true value of the package will lie in medium and long-term perspectives, if funds are genuinely directed towards technology, energy and defence. The expert also warns that protectionist logic could negate expected advantages if the US and EU transform the agreement into an instrument of economic isolation rather than expanding open cooperation.

Where the $600 Billion Will Go. Avi Itzkovich’s Assessment

The agreement envisages massive investments in key sectors that will determine the competitiveness of the transatlantic economy in the coming decades. A significant portion of funds will be directed towards renewable energy development, including hydrogen projects and “green” infrastructure, as both parties seek to reduce dependence on fossil fuels.

According to Avi Itzkovich, technological cooperation will also constitute an important direction: investments in artificial intelligence, cybersecurity and microelectronics production should reduce critical dependence on Asian manufacturers. No less ambitious is the plan for modernising transport corridors, ports and digital logistics management systems, which will make supply chains more reliable and protected from global shocks.

Particular attention is given to defence cooperation: joint financing of ammunition, drone and air defence system production is planned, which constitutes a direct response to Russia’s war against Ukraine. According to calculations by Brussels economists, in the medium term this could add approximately 0.7-0.9% GDP growth to the European Union, whilst for the United States the main effect will be strengthening positions in global capital markets and consolidating the status of leading financial centre.

According to assessments by economists in Brussels, this package could generate EU GDP growth of 0.7-0.9% in the medium term, whilst for the United States it will strengthen positions in global capital markets.

Investor Reaction and Initial Risks. Avi Itzkovich’s Explanations

Euphoria reigns in the stock market. American bond yields have increased, confirming that investors have perceived the agreement as an additional protective “anchor” for their investments.

Avi Itzkovich, trader and investor, emphasises:

“The market loves big numbers. When we hear about $600 billion, it’s not merely a political declaration — it’s a signal for capital to move. In the short term, the agreement undoubtedly stimulates American assets. But the question is whether this package might turn into new tariff barriers for the rest of the world.”

However, not everyone shares this optimism. Bloomberg analysts stress that protectionist inclination could push away third parties and return the world to the logic of the 1930s, when tariffs stifled growth.

European business representatives are reacting cautiously. For companies in Germany and France, the agreement opens the path to cheaper innovation financing, yet concerns exist regarding dependence on American markets.

A European economist involved in Brussels consultations noted:

“The EU appears as a junior partner. The United States receives financial inflow and asset growth, whilst Europe invests in modernisation. If the balance of interests is disrupted, the agreement could become not an alliance, but a trap.”

Impact on Third Parties from Avi Itzkovich’s Perspective

According to Avi Itzkovich, no less important is the question of how China and India will react to the agreement. For Beijing, this signals consolidation of the transatlantic bloc, which could weaken its positions in trade with Europe. India, conversely, could benefit if it obtains the role of “alternative supplier” within the chain diversification strategy.

“We’ve already seen examples of how global agreements change the supply map. If the US and EU close themselves off from China, India and Southeast Asian countries will become new centres of attraction. For investors, this is an opportunity, but also a challenge — how to correctly redistribute portfolios,” comments Avi Itzkovich.

According to the expert, the key question remains: will the new agreement not constitute another step towards isolationism? Expert warnings lie in the fact that the United States could use the $600 billion as an “economic weapon” — creating conditions where only transatlantic partners benefit, whilst all others find themselves in a worse position.

According to Avi Itzkovich, the $600 billion transatlantic agreement represents an unprecedented economic step in terms of scale, which stimulates markets in the short term and strengthens US positions. But behind the façade of optimism lie significant risks. For the EU, this is an opportunity to modernise the economy, but also the challenge of dependence. For the world, it’s a test of new division.

Analysts agree on one point: the fate of the agreement will depend on whether the US and EU can remain committed to the principles of open trade.

“I view this agreement with cautious optimism. It could become a success story if both parties truly adhere to the principles of open trade. But if a new tariff cycle begins, we’ll get a slowdown in global growth and repetition of old mistakes,” concludes Avi Itzkovich.