Trump says EU and US have ‘reached a deal’ on trade at meeting in Scotland Trump said the EU deal, which places a 15 per cent tariff on EU goods entering the US, is the ‘biggest deal ever made’
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President Donald Trump announced Sunday that the U.S. reached a trade deal with the European Union, following a pivotal discussion with European Commission President Ursula von der Leyen days before the Aug. 1 tariff deadline.
Trump said that the deal imposes a 15% tariff on most European goods to the U.S., which is lower than the 30% rate he had previously threatened against the United States’ largest trading partner.
Trump also said that the 27-member bloc has agreed to purchase $750 billion worth of U.S. energy and $600 billion worth of investments into the U.S.
“It’s a very powerful deal, it’s a very big deal, it’s the biggest of all the deals,” Trump said alongside von der Leyen.
“It’s a good deal, it’s a huge deal, with tough negotiations,” von der Leyen said after the meeting.
The announcement comes after Trump during a press conference before his meeting with the European leader said that there was a 50-50 chance they would reach a framework of a deal, following weeks of painstaking negotiations.
The Sunday announcement marks a pivotal moment for Trump. It also comes after weeks of uncertainty surrounding U.S.-EU trade talks.
Brussels had been preparing for a no-deal scenario if the trade talks devolved ahead of Aug. 1.
Lawmakers had approved a major package of counter-tariffs, which would have targeted a range of U.S. goods. The bloc also considered deploying the EU’s “Anti-Coercion Instrument,” a move seen as the trading bloc’s “trade bazooka.”
The U.S.-EU trade relationship was valued at 1.68 trillion euros ($1.97 trillion) when taking into account both services and goods trading in 2024, according to the European Council.
While the EU recorded a surplus on goods trading, it noted a deficit in the services realm. This left the EU with an overall trade surplus of around 50 billion euros with the U.S. last year.
European Commission President Ursula von der Leyen defended the trade deal clinched with the United States on Sunday as "the best we could get" and not to be underestimated given the looming threat of 30% tariffs hanging over the EU.
Von der Leyen said a baseline tariff rate of 15% on EU goods imported into the United States would apply to most goods, including cars, semiconductors, and pharmaceuticals.
Meanwhile, a zero-for-zero tariff rate had been agreed for certain strategic products, including aircraft and aircraft parts, certain chemicals, and certain generic drugs. No decision had been taken on a rate for wine and spirits, she added.
Asked if she considered 15% a good deal for European carmakers, von der Leyen told reporters: "15% is not to be underestimated, but it is the best we could get."
The European Union committed to purchasing $750 billion worth of U.S. LNG and nuclear fuel over three years. "We still have too much Russian LNG that is coming through the back door," she said.
The European Commission has proposed phasing out all Russian gas imports by January 1, 2028.
"Today's deal creates certainty in uncertain times, delivers stability and predictability," von der Leyen told reporters before leaving Scotland.
European Union trade negotiators may promptly celebrate the success they have achieved by clinching a deal with Donald Trump. If so, the question should be: If that passes for success, what would failure have looked like?
Financial markets and European captains of industry will doubtless heave a sigh of relief at the agreement, announced on Sunday by the U.S. president and his European Commission counterpart, Ursula von der Leyen. The continent’s main exporters can base their investment and commercial plans on the 15% levy on U.S. imports accepted by the Commission. That’s much lower than the 30% charge on European goods Trump had promised to impose on August 1 in the absence of a deal, which in turn was less than a previous 50% threat. Importantly, the rate applies to European cars, which join Japanese-made vehicles in escaping the 25% charge on U.S. auto imports, and to the continent’s pharmaceuticals and semiconductors, which may have otherwise faced punitive sector-specific treatment. The deal also enables the Europeans to shelve counter-tariffs and other measures they had lined up. Some degree of uncertainty has at least been dispelled.
Nevertheless, the tariff level still amounts to capitulation by Brussels. It must be compared not to Trump’s threats, but to the 1.47% average, open new tab rate previously applied to European goods crossing the Atlantic. Only two months ago, several EU governments were warning, opens new tab that a 10% across-the-board charge, similar to what the UK had obtained, would be a red line that should trigger some form of response.
In addition to the added trade friction, the EU has also promised to import more energy – spending $250 billion a year on American oil and gas – and could invest some $600 billion stateside. That, at least, is Trump’s interpretation of the deal. It’s unclear whether these figures represent incremental amounts or what time frame the president had in mind. Fuzzy as they are, these EU pledges at least do not look very binding.
Yet the vague agreement also suggests Sunday’s announcement is unlikely to be the last word. Even at the lower rate, the tariffs will hurt the U.S. economy. They will either bring much-needed revenue — a source of pride for Treasury Secretary Scott Bessent – or shrink imports. But they cannot achieve both at the same time. And if EU businesses do crank up investment in the U.S., the resulting capital flows will be to the detriment of the trade balance. All this means the EU’s trade surplus, opens new tab with the U.S., which reached 198 billion euros in goods last year, partly offset by a 109 billion euro deficit on services, may not shrink much in the coming years.
When the impulsive and unpredictable president can no longer deny the destructive impact of his tariffs, he will be tempted to yet again blame U.S. trade partners. It’s puzzling that the EU, the world’s largest, opens new trading power, has failed to grasp that the best way to fight bullying is to stand your ground.
The United States struck a framework trade deal with the European Union on July 27, imposing a 15% tariff on most U.S. imports of EU goods but averting a spiralling battle between two blocs which account for almost a third of global trade.
“I think this is the biggest deal ever made,” U.S. President Donald Trump told reporters after an hour-long meeting with European Commission President Ursula von der Leyen, who had travelled for talks at his golf course in western Scotland.
The 15% tariff applies to European automobiles, Trump said, mirroring part of the framework agreement the United States agreed to with Japan. Trump said a 50% rate on steel and aluminium would remain in place, but von der Leyen said the tariff would be cut and a quota system put in place. Von der Leyen said the 15% tariff would also apply to semiconductors and pharmaceuticals, which are the subject of sector-specific investigations by the U.S.
Von der Leyen said the two sides had both agreed to eliminate all tariffs on certain products, including aircraft and components, certain semiconductor equipment, and agricultural goods.
The deal includes $600 billion of EU investments in the U.S. and “significant” EU purchases of American energy and military equipment. Von der Leyen said the EU would acquire oil, liquefied natural gas and nuclear fuel worth $250 billion per year for three years.
Trump had on July 12, threatened to apply a 30% tariff on imports from the EU starting on August 1. “15% is not to be underestimated, but it is the best we could get,” von der Leyen said.
