The United States and European Union have reached a high-stakes trade agreement to prevent a looming transatlantic tariff war. The deal, finalized just days before a planned increase in U.S. levies on European imports, will impose a baseline 15% tariff on EU exports — including key sectors like automobiles, pharmaceuticals, and semiconductors.
U.S. President Donald Trump and European Commission President Ursula von der Leyen announced the agreement following a one-hour meeting at Trump’s golf resort in Scotland. Trump hailed it as “probably the biggest deal ever reached in any capacity.”
The breakthrough comes ahead of an August 1 deadline, which would have triggered a sweeping 30% tariff on all EU goods. Instead, the agreed 15% rate will now apply uniformly, averting a trade escalation with serious economic implications.
As part of the deal, the EU committed to purchasing $750 billion worth of U.S. energy — including liquefied natural gas, oil, and nuclear fuels — over the next three years. Additionally, the bloc pledged $600 billion in new investments.
“This is a good deal,” said von der Leyen. “It brings stability and predictability — essential for businesses on both sides of the Atlantic.”
Von der Leyen added that the EU had secured bilateral tariff exemptions on several strategic goods such as aircraft, select chemicals, agricultural products, and critical raw materials. She also expressed hope for additional “zero-for-zero” agreements in the near future, particularly on alcoholic beverages.
Trump noted that EU countries would also be making major purchases of U.S. military equipment, as NATO members continue to increase defense spending.
Despite the agreement, existing U.S. tariffs remain in place: 25% on European cars, 50% on steel and aluminum, and a general 10% levy. Trump indicated steel duties would not be reduced, although von der Leyen later suggested a quota system would be introduced for steel imports.
U.S. and EU Strike Landmark Trade Deal to Avert Tariff War
The EU had been pushing hard for relief in industries hit hardest by U.S. trade policies, particularly the auto and chemical sectors. “Fifteen percent is not to be underestimated, but it’s the best we could get,” admitted von der Leyen.
EU member states, whose ambassadors were updated in Greenland during a scheduled visit, must now formally approve the deal. While some, like Ireland, welcomed the agreement for restoring stability, they also expressed regret over the level of tariffs.
Germany’s industrial sector was more critical. The influential BDI federation warned of “considerable negative repercussions,” while the VCI chemical group said tariffs remain “too high.”
Without the deal, the EU had prepared retaliatory tariffs on $109 billion worth of U.S. goods — including aircraft and automobiles — set to take effect in stages from August 7.
Trump, who has pledged to overhaul U.S. trade relationships worldwide, described this agreement as the most significant to date. “This was the big one,” he said. “The biggest of them all.”
