- President Donald Trump and European Commission President Ursula von der Leyen announced the U.S. has reached a trade deal with the European Union.
- “It’s a very powerful deal, it’s a very big deal, it’s the biggest of all the deals,” Trump said.
- The U.S. president had previously threatened 30% tariffs on goods from the European Union.
- Ahead of his meeting with von der Leyen, Trump said that it was a 50-50 chance they’d make a deal.
Following crucial talks with European Commission President Ursula von der Leyendays prior to the tariff deadline of August 1, President Donald Trump announced on Sunday that the United States and the European Union had secured a trade agreement.
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Trump claimed that most European goods, including automobiles, would be subject to a 15% tariff under the agreement.
In a briefing following the announcement of the deal, von der Leyen stated that certain products, such as airplanes and their parts, certain chemicals, and pharmaceuticals, would not be subject to tariffs. Additionally, she stated that no existing tariffs would be increased by the new 15% tariff rate.
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The 15% tariff rate is more than the 10% baseline that the EU had hoped for, but it is less than the 30% rate that Trump had previously threatened against the biggest trading partner of the US.
According to Trump, the 27-member group has decided to invest an extra $600 billion in the United States above existing levels and buy $750 billion worth of American energy.
Additionally, he stated that the bloc will be “purchasing hundreds of billions of dollars worth of military equipment,” but he did not specify how much money would be spent.
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On Sunday, Trump and von der Leyen declared, “It’s a very powerful deal, it’s a very big deal, it’s the biggest of all the deals.”
“It’s a good deal, it’s a huge deal, with tough negotiations,” von der Leyen stated following the assembly.
After weeks of uncertainty surrounding the U.S.-EU trade discussions, the deal represents a turning point for Trump, even though uncertainties still surround the precise contents and timeframe of the EU investments.
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In a news conference prior to his meeting with the European leaders, Trump stated that there was a 50/50 chance that they would come to an agreement.
In case the trade negotiations deteriorated before August 1, Brussels had been bracing for a no-deal situation.
A significant set of counter-tariffs that would have targeted a variety of American goods had been approved by lawmakers. Additionally, the group contemplated using the EU’s “Anti-Coercion Instrument,” which is regarded as the trading union’s “trade bazooka.”
According to astatement, the agreement “brings clarity and predictability to the trading relationship between the EU and the US,” according to Ireland’s prime minister, Michael Martin.
“It does mean that there will now be higher tariffs than there have been and this will have an impact on trade between the EU and the US, making it more expensive and more challenging,” stated Ireland’s Department of the Taoiseach.
The statement went on to say that the accord “creates a new era of stability,” nevertheless.
Friedrich Merz, the German chancellor, praised the new agreement as well, pointing to the advantages it would have on the nation’s auto sector.
“With the agreement in the EU-US negotiations on tariffs a trade conflict, which would have hit the export-oriented German economy hard, has been avoided,” he stated in a statement.
This is particularly true for the auto industry, whose existing 27.5% tariffs were nearly cut in half to 15%. The fast tariff decrease is quite important in this case,” he continued.
In 2024, the European Council estimated that the value of the U.S.-EU trade relationship, including both goods and services commerce, was 1.68 trillion euros ($1.97 trillion).
The EU reported a deficit in the services sector despite a surplus in the trade of goods. This left the EU with an overall trade surplus of around 50 billion euros with the U.S. last year.
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