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29-07-2025
EDINBURGH: The United States and European Union have reached a sweeping trade agreement, averting a full-blown transatlantic trade war days ahead of an August 1 deadline.
The deal, which imposes a 15 percent tariff on most European goods, came after 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,” Trump told reporters at his Turnberry golf resort, hailing the agreement as the “biggest deal ever made”.
Von der Leyen welcomed the agreement, saying it would “bring stability” and “bring predictability that’s very important for our businesses on both sides of the Atlantic”.
The agreement, sealed days before Washington was due to impose a 30 percent tariff on EU imports, is the most significant of Trump’s trade deals announced so far, following preliminary pacts with Japan, the United Kingdom, Indonesia, Vietnam and the Philippines, and a 90-day trade truce with China.
The EU is the US’s largest trading partner, with two-way trade in goods and services last year reaching nearly $2 trillion.
Under the deal, the 15 percent tariff will be applied broadly to European exports, including automobiles.
The 15 percent baseline rate marks a reprieve for Europe’s auto industry, which had since April been subject to a 25 percent duty on top of a pre-existing 2.5 percent levy.
Trump said the EU also committed to buying about $750bn worth of US energy, in addition to boosting overall investment in the US by $600bn and placing a large order for military equipment.
“We have the opening up of all of the European countries,” Trump said.
The breakthrough follows months of tense back-and-forth exchanges between European officials and Trump, who has long accused the EU of unfair trade practices.
Just before negotiations began, Trump called the existing arrangements “a very one-sided transaction; very unfair to the United States”.
On Sunday, Von der Leyen pointed to the combined economic might of the US and Europe, saying that their trade encompassed “hundreds of millions of people and trillions of dollars”.
Von der Leyen also acknowledged Trump’s “tough” reputation as a negotiator, to which he replied: “But fair.”
Trade conflict averted
Earlier this month, negotiations appeared close to collapse when Trump threatened to proceed with the 30 percent tariff unless the EU matched the 15 percent rate he recently agreed to with Japan.
Asked if he would accept anything lower, Trump flatly said, “No”.
In anticipation of the possibility that the sides could fail to reach a deal, Brussels had prepared a long list of retaliatory tariffs targeting everything from beef and beer to Boeing aircraft and car parts.
German Chancellor Friedrich Merz welcomed the agreement.
“This agreement has succeeded in averting a trade conflict that would have hit the export-orientated German economy hard,” Merz said in a statement.
“This applies in particular to the automotive industry, where the current tariffs of 27.5 percent will be almost halved to 15 percent.” (Int’l Monitoring Desk)
