EU, US reach trade deal
The U.S. and European Union agreed to a deal that will see the bloc face 15% tariffs on most of its exports, including automobiles, staving off a trade war that could have delivered a hammer blow to the global economy.
The pact comes less than a week before a Friday deadline for President Donald Trump’s higher tariffs to take effect. The president in May threatened to impose a 50% duty on nearly all EU goods, adding pressure that accelerated negotiations, before lowering that to 30%.
Trump announced the deal Sunday after a meeting with European Commission President Ursula von der Leyen, though the full details of the pact were not immediately available.
Trump said the charge would cover “automobiles and everything else.” The European leader said the rate would be “all inclusive,” though Trump said later it did not include pharmaceuticals and metals. Steel and aluminum “stays the way it is,” he added, and drugs are “unrelated to this deal.”
“I think that basically concludes the deal,” Trump told reporters at his golf club in Turnberry, Scotland. “It’s the biggest of all the deals.”
Von der Leyen said the agreement “will bring stability” and “it will bring predictability.”
The EU agreed to purchase $750 billion in American energy products, invest $600 billion in the U.S. on top of existing expenditures, open up countries’ markets to trade with the U.S. at zero tariffs and purchase “vast amounts” of military equipment, Trump said.
Ahead of the meeting, the EU was expecting a 15% charge on its imports to also apply to most pharmaceuticals. The products had been one of the negotiation’s main sticking points.
For months, Trump has threatened most of the world with high tariffs with the goal of shrinking U.S. trade deficits.
The transatlantic pact removes a major risk for markets and the global economy — a trade war involving $1.7 trillion worth of cross-border commerce — even though it means European shipments to the U.S. are getting hit with a higher tax at the border.
The goals, Trump said, were more production in the U.S. and wider access for American exporters to the European market. Von der Leyen acknowledged part of the drive behind the talks was a rebalancing of trade, but cast it as beneficial for both sides.
“The starting point was an imbalance,” von der Leyen said. “We wanted to rebalance the trade we made, and we wanted to do it in a way that trade goes on between the two of us across the Atlantic, because the two biggest economies should have a good trade flow.”
The announcement capped off months of often tense shuttle diplomacy between Brussels and Washington. The two sides appeared close to a deal earlier this month when Trump made his 30% threat.
The EU had prepared to put levies on about $117 billion — about a third of American exports to the bloc — if a deal wasn’t reached and Trump followed through on his warning.
U.S. and European negotiators had been zeroing in on an agreement this past week, and the decision for von der Leyen to meet Trump at his signature golf property brought the standoff to a dramatic conclusion.
Officials had discussed terms for a quota system for steel and aluminum imports, which would face a lower import tax below a certain threshold and would be charged the regular 50% rate above it.
U.S. Commerce Secretary Howard Lutnick said a decision on semiconductors, which, like drugs are subject to an ongoing investigation that opens the door to separate tariffs, would be dealt with in roughly “two weeks” when that probe ends.
Originally Published: July 27, 2025 at 4:01 PM EDT