The United States and the European Union finalized a trade agreement on Sunday, setting a 15% tariff on most EU goods, significantly lower than the 30% tariff threatened by the U.S. for August 1.
The deal, announced after a meeting between U.S. President Donald Trump and European Commission President Ursula von der Leyen at Trump’s Turnberry golf resort in Scotland, marks a critical step in easing transatlantic trade tensions.
The agreement follows months of negotiations, with Trump previously criticizing the EU for unfair trade practices and a $235 billion U.S. merchandise trade deficit in 2024.
The 15% tariff applies broadly to European exports, including automobiles, reducing the existing 27.5% duty on the EU auto industry to offer relief to manufacturers like Volkswagen and Mercedes-Benz.
Certain goods, such as aircraft parts, semiconductor equipment, specific chemicals, and select agricultural products, are exempt from tariffs, while discussions on spirits and steel tariffs continue.
The EU committed to purchasing $750 billion in U.S. energy and investing $600 billion in the U.S., alongside significant military equipment orders, though detailed terms remain undisclosed.
German Chancellor Friedrich Merz praised the deal for protecting Germany’s export-driven economy, particularly its automotive sector, from a potential trade conflict.
However, some European lawmakers, like Danish MP Rasmus Jarlov, expressed concerns, stating, “Almost everything will become more expensive in both Europe and the USA, and we will all be worse off.”
Analysts, including Carsten Brzeski of ING Research, noted the agreement’s lack of detailed documentation, suggesting that further clarity is needed to assess its full impact.
The deal, while stabilizing trade relations, leaves room for future adjustments, with Trump retaining the option to raise tariffs if EU investment commitments falter.