Trump, EU chief strike trade deal in transatlantic standoff
The agreement came as the clock ticked down on an Aug 1 deadline for the European Union to strike a deal with Washington, or face an across-the-board US levy of 30 percent.
"We have reached a deal. It's a good deal for everybody," Trump told reporters following a high-stakes meeting with von der Leyen at his golf resort in Turnberry, Scotland.
Trump told reporters the deal involved a baseline levy of 15 percent on EU exports to the United States, the same level secured by Japan, including for the bloc's crucial auto sector, which is currently being taxed at 25 percent.
"We are agreeing that the tariff straight across, for automobiles and everything else, will be a straight across tariff of 15 percent," Trump said.
He also said the bloc had agreed to purchase "US$750 billion worth of energy" from the United States, as well as US$600 billion more in additional investments in the country.
Negotiating on behalf of the EU's 27 countries, von der Leyen's European Commission had been pushing hard to salvage a trading relationship worth an annual US$1.9 trillion in goods and services.
"It's a good deal," the EU chief told reporters, sitting alongside Trump following their hour-long talks.
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AsiaOne
21 minutes ago
- AsiaOne
US and EU avert trade war with 15% tariff deal, World News
TURNBERRY, Scotland — The US struck a framework trade agreement with the European Union on Sunday (July 27), imposing a 15 per cent import tariff on most EU goods — half the threatened rate — and averting a bigger trade war between the two allies that account for almost a third of global trade. US President Donald Trump and European Commission President Ursula von der Leyen announced the deal at Trump's luxury golf course in western Scotland after an hour-long meeting that pushed the hard-fought deal over the line, following months of negotiations. "I think this is the biggest deal ever made," Trump told reporters, lauding EU plans to invest some US$600 billion (S$768 billion) in the United States and dramatically increase its purchases of US energy and military equipment. Trump said the deal, which tops a US$550 billion deal signed with Japan last week, would expand ties between the trans-Atlantic powers after years of what he called unfair treatment of US exporters. Von der Leyen, describing Trump as a tough negotiator, said the 15 per cent tariff applied "across the board", later telling reporters it was "the best we could get." "We have a trade deal between the two largest economies in the world, and it's a big deal. It's a huge deal. It will bring stability. It will bring predictability," she said. The agreement mirrors key parts of the framework accord reached by the US with Japan, but like that deal, it leaves many questions open, including tariff rates on spirits, a highly charged topic for many on both sides of the Atlantic. The deal, which Trump said calls for US$750 billion of EU purchases of US energy in coming years and "hundreds of billions of dollars" of arms purchases, likely spells good news for a host of EU companies, including Airbus, Mercedes-Benz and Novo Nordisk, if all the details hold. German Chancellor Friedrich Merz welcomed the deal, saying it averted a trade conflict that would have hit Germany's export-driven economy and its large auto sector hard. German carmakers, VW, Mercedes and BMW were some of the hardest hit by the 27.5 per cent US tariff on car and parts imports now in place. The baseline 15 per cent tariff will still be seen by many in Europe as too high, compared with Europe's initial hopes to secure a zero-for-zero tariff deal. Bernd Lange, the German Social Democrat who heads the European Parliament's trade committee, said the tariffs were imbalanced and the hefty EU investment earmarked for the US would likely come at the bloc's own expense. Trump retains the ability to increase the tariffs in the future if European countries do not live up to their investment commitments, a senior US administration official told reporters on Sunday evening. The euro rose around 0.2 per cent against the dollar, sterling and yen within an hour of the deal's being announced. Mirror of Japan deal Carsten Nickel, deputy director of research at Teneo, said Sunday's accord was "merely a high-level, political agreement" that could not replace a carefully hammered out trade deal: "This, in turn, creates the risk of different interpretations along the way, as seen immediately after the conclusion of the US-Japan deal." While the tariff applies to most goods, including semiconductors and pharmaceuticals, there are exceptions. The US will keep in place a 50 per cent tariff on steel and aluminium. Von der Leyen suggested the tariff could be replaced with a quota system; a senior administration official said EU leaders had asked that the two sides continue to talk about the issue. Von der Leyen said there would be no tariffs from either side on aircraft and aircraft parts, certain chemicals, certain generic drugs, semiconductor equipment, some agricultural products, natural resources and critical raw materials. "We will keep working to add more products to this list," von der Leyen said, adding that spirits were still under discussion. A US official said the tariff rate on commercial aircraft would remain at zero for now, and the parties would decide together what to do after a US review is completed, adding there is a "reasonably good chance" they could agree to a lower tariff than 15 per cent. No timing was given for when that probe would be completed. The deal will be sold as a triumph for Trump, who is seeking to reorder the global economy and reduce decades-old US trade deficits, and has already reached similar framework accords with Britain, Japan, Indonesia and Vietnam, although his administration has not hit its goal of "90 deals in 90 days." US officials said the EU had agreed to lower non-tariff barriers for automobiles and some agricultural products, though EU officials suggested the details of those standards were still under discussion. [[nid:720501]] "Remember, their economy is US$20 trillion... they are five times bigger than Japan," a senior US official told reporters during a briefing. "So the opportunity of opening their market is enormous for our farmers, our fishermen, our ranchers, all our industrial products, all our businesses." Trump has periodically railed against the EU, saying it was "formed to screw the United States" on trade. He has fumed for years about the US merchandise trade deficit with the EU, which in 2024 reached US$235 billion, according to US Census Bureau data. The EU points to the US surplus in services, which it says partially redresses the balance. Trump has argued that his tariffs are bringing in "hundreds of billions of dollars" in revenues for the US while dismissing warnings from economists about the risk of inflation. On July 12, Trump threatened to apply a 30 per cent tariff on imports from the EU starting on Aug 1, after weeks of negotiations failed to reach a comprehensive trade deal. The EU had prepared countertariffs on 93 billion euros (S$140 billion) of US goods in the event a deal to avoid the tariffs could not be struck. [[nid:720506]]
Straits Times
an hour ago
- Straits Times
For Trump, EU trade deal was badly needed
Find out what's new on ST website and app. Both parties agreed on July 27 to a broad-brush trade deal that sets a 15 per cent tariff on most EU goods. EDINBURGH, Scotland - For months, President Donald Trump's penchant for overhyping the speed at which he could negotiate complex trade deals has been the butt of Washington jokes. 'Ninety days ago, Donald Trump promised the world that his tariffs would lead to 90 deals in 90 days,' Senate Minority Leader Chuck Schumer, said in July, adding: 'By my count, he's about 88 trade deals short.' So on July 27, when Mr Trump announced a trade agreement with the European Union, it was not only his biggest trade deal to date, but also, politically, his most badly needed. After going months without securing deals, Mr Trump is now coming off his most productive stretch of trade negotiations, landing agreements in recent days with the Philippines, Japan and Indonesia as well as the European Union, which represents 27 countries. The deal with the European Union, at least upon first impression, seemed to give Mr Trump much of what he wanted. 'I'm very surprised how the European Union gave in to Trump's demands,' said Professor Douglas Irwin, a professor of economics at Dartmouth College. 'I thought the EU would be the most prone to retaliation. And yet, they didn't do it. They really gave in to most of what Trump wanted.' Though many details of the agreement were unclear, the European Union and the United States agreed on July 27 to a broad-brush trade deal that sets a 15 per cent tariff on most EU goods, including cars, averting what could have become a painful trade war with a bloc that is the United States' single biggest source of imports. Top stories Swipe. Select. Stay informed. Singapore Not feasible for S'pore to avoid net‑zero; all options to cut energy emissions on table: Tan See Leng Singapore With regional interest in nuclear energy rising, S'pore must build capabilities too: Tan See Leng Singapore Sewage shaft failure linked to sinkhole; PUB calling safety time-out on similar works islandwide Singapore Workers used nylon rope to rescue driver of car that fell into Tanjong Katong Road sinkhole Singapore New Mandai North Crematorium, ash-scattering garden to open on Aug 15 World Three dead, several injured after train derails in Germany World US and EU clinch deal with broad 15% tariffs on EU goods to avert trade war Asia Displaced villagers at Thai-Cambodian border hope to go home as leaders set to meet for talks The European Union also agreed to purchase US$750 billion (S$960 billion) of US energy, which Ms Ursula von der Leyen, president of the EU's executive branch, said would be spread over three years. That, she noted, is roughly the length of Mr Trump's remaining term in office. The bloc also agreed to increase its investment in the United States by more than US$600 billion. The two sides agreed to drop tariffs to zero on a range of goods including aircraft, plane parts, certain chemicals, certain generic drugs, semiconductor equipment and some agricultural products, Ms von der Leyen said. She acknowledged that the tariffs could prove tough for some European businesses, but defended the deal in light of higher tariffs Mr Trump had threatened. 'Fifteen percent is not to be underestimated, but it is the best we could get,' she said. It was a positive political development for Mr Trump on a number of fronts. Economists have mostly been sour on the idea of his sweeping tariffs, warning of dire consequences including inflation and rising unemployment. And even as many criticised the wisdom of Mr Trump's economic policies, his administration came under added fire over its struggle to negotiate deals. The agreement with the European Union, the America's largest trading partner, may tamp down some of the criticism. The agreement may also offer Mr Trump a way to divert the news cycle from his administration's handling of the Jeffrey Epstein files , a controversy that has dogged him for weeks. At a news conference on the trade deal, a reporter asked Mr Trump whether he had rushed the agreement forward in an attempt to knock the Epstein story line out of the news. 'You've got to be kidding,' a frustrated Mr Trump responded. 'That had nothing to do with it.' Trade negotiations are famously complex and time-consuming, so most analysts doubted that Mr Trump could have much success in quickly striking deals. The Peterson Institute for International Economics said in a 2016 analysis that negotiations for a single trade deal can take more than a year, with implementation taking multiple years. That did not stop the White House from issuing bold predictions. Within days of the April 2 announcement of tariffs on countries across the globe, White House officials said about 70 countries were calling to strike deals. Mr Trump's trade adviser predicted 90 agreements in 90 days. As the deals proved tougher to negotiate than advertised, Mr Trump lamented the pressure he was under. 'Everyone says, 'When, when, when are you going to sign deals?'' he said in May. At one point, he said, 'We don't have to sign deals.' The agreements Mr Trump has announced in recent days contain mostly top-line figures. They are not the detailed, complex documents that the United States has historically negotiated, which can number in the hundreds of pages. And the new deal with the European Union could still run into trouble. The Trump administration faces nearly a dozen lawsuits seeking to have its tariffs declared illegal on the grounds that Mr Trump does not have the authority to impose them without the consent of Congress. Should those suits succeed, Mr Trump would be back to square one. Mr Andrew Hale, a trade policy analyst for the conservative Heritage Foundation, cautioned against reading too much into the deal with the European Union until the text is released, and the lawsuits are resolved. 'These are not comprehensive free trade agreements,' he said. 'Let's make that very clear. And much of this may evaporate.' NYTIMES
Business Times
an hour ago
- Business Times
Oil rises as US-EU deal lifts trade optimism
[SINGAPORE] Oil prices rose on Monday after the US reached a trade deal with the European Union and may extend a tariff pause with China, reducing concerns that potentially higher levies would limit economic activity and impact fuel demand. Brent crude futures inched up 22 cents, or 0.32 per cent, to US$68.66 a barrel by 0035 GMT while US West Texas Intermediate crude was at US$65.38 a barrel, up 22 cents, or 0.34 per cent. The US-European Union trade deal and a possible extension in US-China tariff pause are supporting global financial markets and oil prices, IG markets analyst Tony Sycamore said. The United States and the European Union struck a framework trade agreement on Sunday that will impose a 15 per cent import tariff on most EU goods, half the threatened rate. The deal averted a bigger trade war between two allies that account for almost one-third of global trade and could crimp fuel demand. Also, senior US and Chinese negotiators will meet in Stockholm on Monday aiming to extend a truce keeping sharply higher tariffs at bay ahead of the Aug 12 deadline. Oil prices settled on Friday at their lowest in three weeks as global trade concerns and expectations of more oil supply from Venezuela weighed. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Venezuela's state-run oil company PDVSA is getting ready to resume work at its joint ventures under terms similar to Biden-era licenses, once US President Donald Trump reinstates authorisations for its partners to operate and export oil under swaps, company sources said. Though prices were up slightly on Monday, the prospect of Opec+ further easing supply curbs limited the gains. A market monitoring panel of the Organization of the Petroleum Exporting Countries and their allies is set to meet at 1200 GMT on Monday. It is unlikely to recommend altering existing plans by eight members to raise oil output by 548,000 barrels per day in August, four Opec+ delegates said last week. Another source said it was too early to say. The producer group is keen to recover market share while summer demand is helping to absorb the extra barrels. JP Morgan analysts said global oil demand rose by 600,000 bpd in July on year, while global oil stocks rose 1.6 million bpd. In the Middle East, Yemen's Houthis said on Sunday they would target any ships belonging to companies that do business with Israeli ports, regardless of their nationalities, as part of what they called the fourth phase of their military operations against Israel over the Gaza conflict. REUTERS
