The United States and European Union on Sunday reached a major agreement to defuse a looming trade conflict, with former President Donald Trump calling it the “biggest-ever” deal. The announcement came after a one-hour meeting between Trump and European Commission President Ursula von der Leyen at his golf resort in Scotland.
As part of the deal, a baseline 15% tariff will be applied to EU exports to the US, including key sectors like automobiles, pharmaceuticals, and semiconductors. This move averted a planned 30% blanket tariff on European goods set to take effect August 1.
The EU also agreed to purchase $750 billion worth of American energy and invest an additional $600 billion in the US, aiming to reduce its dependence on Russian energy sources. Trump said EU nations would also spend “hundreds of billions” on US military equipment.
Von der Leyen called the agreement “significant” and said it would bring stability and predictability for businesses. The deal also includes bilateral tariff exemptions for key products such as aircraft, chemicals, some agricultural items, and critical raw materials. Talks on zero-tariff deals for alcohol and other sectors are still ongoing.
While the 15% tariff is still higher than pre-existing rates, it replaces the threat of steeper levies. EU exporters and industry groups remain cautious, warning of negative economic impacts despite German Chancellor Friedrich Merz welcoming the move as a way to avoid trade escalation.
Trump, pushing for global trade renegotiations, said this deal was “the big one” and hinted more trade deals may follow.