Jul 28, 2025
The US and EU have agreed on a trade deal to prevent tariffs.
The United States and the European Union reached a trade agreement on Sunday, ending a prolonged standoff. US President Donald Trump announced the deal after discussions with European Commission President Ursula von der Leyen in Scotland, stating, "We have reached a deal. It's a good deal for everybody." Von der Leyen emphasized the significance of the trade deal between the world's two largest economies, noting it would provide stability and predictability for businesses on both sides of the Atlantic.
Ahead of the discussions, Trump had suggested a "good 50-50 chance" for reaching an agreement with the EU. The deal stipulates a uniform 15% tariff on automobiles and other goods, whereas steel and aluminum would still face a 50% tax. Trump mentioned the EU's commitment to buying $750 billion worth of energy from the US, alongside an additional $600 billion in investments. Von der Leyen stated that these purchases would enhance Europe's energy security by replacing Russian gas and oil with US LNG, oil, and nuclear fuels.
The agreement also sets a baseline tariff of 15% on imported EU goods, including cars, semiconductors, and pharmaceuticals. Trump pointed out that "fairness" was the last major issue to resolve, noting that Europe has stringent barriers against US car exports and agricultural products.
The pact allows the EU to avoid the 30% tariffs Trump had threatened on all goods from the bloc. The 15% rate aligns with a similar announcement made with Japan. This reflects a significant compromise, as von der Leyen initially proposed "zero-for-zero tariffs for industrial goods." However, the agreement includes "zero-for-zero tariffs on several strategic products," such as aircraft, chemicals, and certain agricultural goods, while the spirits sector was not addressed in the deal.
The trade agreement must be approved by all 27 EU member states. German Chancellor Friedrich Merz welcomed the deal, stating it helped prevent a trade conflict that would have adversely affected Germany's export-driven economy.
Ahead of the discussions, Trump had suggested a "good 50-50 chance" for reaching an agreement with the EU. The deal stipulates a uniform 15% tariff on automobiles and other goods, whereas steel and aluminum would still face a 50% tax. Trump mentioned the EU's commitment to buying $750 billion worth of energy from the US, alongside an additional $600 billion in investments. Von der Leyen stated that these purchases would enhance Europe's energy security by replacing Russian gas and oil with US LNG, oil, and nuclear fuels.
The agreement also sets a baseline tariff of 15% on imported EU goods, including cars, semiconductors, and pharmaceuticals. Trump pointed out that "fairness" was the last major issue to resolve, noting that Europe has stringent barriers against US car exports and agricultural products.
The pact allows the EU to avoid the 30% tariffs Trump had threatened on all goods from the bloc. The 15% rate aligns with a similar announcement made with Japan. This reflects a significant compromise, as von der Leyen initially proposed "zero-for-zero tariffs for industrial goods." However, the agreement includes "zero-for-zero tariffs on several strategic products," such as aircraft, chemicals, and certain agricultural goods, while the spirits sector was not addressed in the deal.
The trade agreement must be approved by all 27 EU member states. German Chancellor Friedrich Merz welcomed the deal, stating it helped prevent a trade conflict that would have adversely affected Germany's export-driven economy.