A significant trade agreement has been reached between the United States and the European Union, effectively averting a potential transatlantic trade war just before the August 1 deadline for imposing steep tariffs.
The deal, which establishes a 15 percent tariff on a majority of European goods, was reached following a private meeting on Sunday between US President Donald Trump and European Commission President Ursula von der Leyen in Scotland.
“It was a very interesting negotiation. I think it’s going to be great for both parties,” stated Trump to the media at his Turnberry golf resort, branding the agreement as the “biggest deal ever made”.
President von der Leyen echoed these sentiments, asserting that the deal would “bring stability” and “bring predictability that’s very important for our businesses on both sides of the Atlantic”.
This substantial agreement comes just days before the US was set to implement a 30 percent tariff on EU imports. It marks the most noteworthy of Trump’s trade negotiations so far, following preliminary agreements with nations such as Japan, the United Kingdom, Indonesia, Vietnam, and the Philippines, as well as a temporary trade truce with China.
As the EU stands as the US’s largest trading partner, two-way trade in goods and services between the regions approached nearly $2 trillion last year.
Under the agreed terms, the 15 percent tariff will affect a wide range of European exports, including automobiles. This tariff represents a significant relief for Europe’s auto industry, which had faced a considerable 25 percent duty in addition to a 2.5 percent existing levy since April.
The agreement stipulates that a select range of goods, such as aircraft parts, semiconductor equipment, certain chemicals, and some agricultural products, will be completely exempt from tariffs.
In addition to the tariff arrangements, Trump announced that the EU has committed to purchasing about $750 billion worth of US energy and increasing overall investment in the US by $600 billion, which includes substantial orders for military equipment.
“We have the opening up of all of the European countries,” Trump remarked, underscoring the deal’s positive implications.
However, details surrounding the agreement remain scant, and analysts have approached the announcement with caution.
“The big caveat to today’s deal is that there is nothing on paper, yet,” remarked Carsten Brzeski, the Global Head of Macro for ING Research, in a note.
“The next hours and days will hopefully bring more clarity. Therefore, any assessment has to be taken with more than only one pinch of salt.”
This breakthrough follows months of negotiations marked by escalating tensions between European officials and President Trump, who has long criticized the EU for what he perceives as unfair trade practices.
Just prior to the negotiations, Trump described the existing trade arrangements as “a very one-sided transaction; very unfair to the United States”.
During their meeting, von der Leyen highlighted the combined economic power of the US and Europe, noting that their trade encompasses “hundreds of millions of people and trillions of dollars”.
Acknowledging Trump’s reputation as a tough negotiator, von der Leyen also asserted that the negotiations were conducted fairly.
Earlier in the month, there appeared to be an impending collapse of negotiations as Trump threatened to go ahead with a 30 percent tariff unless the EU agreed to match the 15 percent rate he had negotiated with Japan.
When asked whether he would accept a lower tariff rate, Trump responded decisively with a firm “No”.
In preparation for a potential impasse, Brussels had developed a detailed list of retaliatory tariffs that would target various sectors, including beef, beer, and Boeing aircraft, as well as car parts.
The agreement has been welcomed by several European leaders, including German Chancellor Friedrich Merz, who stated that the deal successfully averted a trade conflict that would have significantly impacted Germany’s export-oriented economy.
“This applies in particular to the automotive industry, where the current tariffs of 27.5 percent will be almost halved to 15 percent,” Merz noted.
While Italian Prime Minister Giorgia Meloni recognized the positive nature of the trade deal, she expressed a need to review the details before making a complete judgment.
Conversely, some European lawmakers have criticized the agreement. Danish MP Rasmus Jarlov described the announcement as “nothing to celebrate”, arguing that the deal would lead to increased costs for consumers in both Europe and the USA.
“The economic illiteracy in the White House is doing serious damage to the West,” Jarlov asserted on social media platform X.
During his current trip in Europe, Trump is scheduled to meet with UK Prime Minister Keir Starmer on Monday, with discussions likely focused on trade matters.
Although a separate US–UK trade framework was unveiled in May, many elements of that agreement remain unclear.
On Tuesday, Trump will visit Aberdeen to inaugurate a third golf course named after his family before returning to Washington later that day.
image source from：aljazeera
