Trending 
The European Union has agreed to a new trade deal with the United States that will see a 15 percent tariff imposed on its exports, narrowly avoiding the threat of a wider transatlantic trade war. The agreement was reached during a high-stakes meeting between US President Donald Trump and European Commission President Ursula von der Leyen at Trump’s golf resort in Scotland on Sunday.
With an August 1 deadline looming, which would have seen tariffs rise to 30 percent across the board, the two sides struck the deal in under an hour. President Trump hailed it as the “biggest-ever” agreement, declaring it a major win for both parties.
Under the terms of the deal, a flat 15 percent tariff will apply to a broad range of European goods, including key sectors such as cars, pharmaceuticals, and semiconductors. The EU has also agreed to purchase $750 billion worth of American energy — including liquefied natural gas, oil, and nuclear fuels — over a three-year period, as part of its strategy to reduce reliance on Russian energy sources.
Von der Leyen described the agreement as “significant,” noting that it brings a much-needed sense of stability and predictability to transatlantic trade. She also revealed that both sides had negotiated exemptions for various strategic products, such as aircraft, some chemicals, agricultural items, and essential raw materials. Talks are ongoing to potentially expand these exemptions to include alcoholic beverages.
In addition, Trump announced that European nations, which have committed to increasing defence spending under NATO obligations, would be purchasing “hundreds of billions of dollars” worth of US-made military equipment.
The European bloc has faced successive waves of US tariffs since Trump returned to office, including levies of 25 percent on cars, 50 percent on steel and aluminium, and a general 10 percent tariff, which was set to triple had talks collapsed. The EU had been pressing for exceptions for vulnerable sectors such as aerospace, spirits, and especially the automotive industry — crucial for countries like France and Germany.
Von der Leyen conceded that although the 15 percent rate was steep, it was the most favourable outcome under the circumstances. “Fifteen percent is not to be underestimated, but it is the best we could get,” she said. The agreement must still be formally approved by EU member states, whose ambassadors were briefed in Greenland ahead of the announcement.
German Chancellor Friedrich Merz welcomed the accord, crediting it with preventing an unnecessary escalation in trade tensions. However, industry voices were more critical. Germany’s BDI industry federation warned of “significant negative consequences,” while the country’s chemical trade body, VCI, criticised the deal for keeping tariffs “excessively high.”
Ireland, a major EU exporter to the US, issued a mixed response, saying it appreciated the clarity the agreement provided, but expressed regret over the high baseline tariff.
While Trump appeared to rule out a softer approach on steel imports, stating that the current tariffs would remain, von der Leyen later said that a quota system would be introduced and some reductions would apply.
Although the new 15 percent levy exceeds the pre-existing average US tariff of 4.8 percent on European goods, it largely mirrors the current trading climate, where most firms are already subject to a 10 percent flat rate. Had negotiations failed, the EU was prepared to impose retaliatory tariffs on $109 billion worth of US goods, including aircraft and automobiles, beginning 7 August.
When asked about the next major agreement on his trade agenda, Trump simply replied, “This was the big one. This is the biggest of them all.”
