Trump’s US-EU Deal Locks in 15% Tariffs
Trade war averted with massive EU investments.
The United States and European Union finalized a trade framework on Sunday, setting a 15% tariff on most EU goods, averting a potential trade war that could have disrupted global markets. Announced after intense talks between President Donald Trump and European Commission President Ursula von der Leyen at Trump’s Turnberry golf course in Scotland, the deal marks a critical step in stabilizing the $1.7 trillion transatlantic trade relationship.
Trump hailed the agreement as “the biggest deal ever made,” projecting $90 billion in U.S. tariff revenue and securing EU commitments to purchase $750 billion in U.S. energy over three years and invest an additional $600 billion in America. The EU will also buy significant U.S. military equipment. Von der Leyen emphasized “stability and predictability” for businesses, noting zero tariffs on strategic goods like aircraft, certain chemicals, generic drugs, and semiconductor equipment, with ongoing talks to exempt more products, possibly including spirits.
The 15% tariff, lower than Trump’s threatened 30%, applies to key EU exports like cars and pharmaceuticals but excludes steel and aluminum, which face a 50% rate. While the EU avoided harsher levies, the deal—higher than the UK’s 10% tariff—has drawn mixed reactions. Germany’s Chancellor Friedrich Merz welcomed averting a trade conflict, vital for its auto industry, while Ireland’s Prime Minister Micheál Martin noted increased trade costs.
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The agreement, requiring EU member state approval, follows months of tense negotiations. Trump’s push to reduce the U.S. trade deficit, which hit $235 billion with the EU in 2024, drove the talks. Without this deal, the EU had prepared $109 billion in retaliatory tariffs on U.S. goods like beef and Boeing planes. While details remain to be finalized, the pact offers a reprieve for global markets, though analysts warn of challenges for EU exporters facing higher costs.
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