EU, US strike 'biggest-ever' trade deal
Trump emerged from a high-stakes meeting with European Commission President Ursula von der Leyen at his golf resort in Scotland to announce that a baseline tariff of 15 percent would be levied on EU exports to the US.
The deal, which the leaders struck in around an hour, came as the clock ticked down on an Aug 1 deadline to avoid an across-the-board US levy of 30 percent on European goods.
"We've reached a deal. It's a good deal for everybody. This is probably the biggest deal ever reached in any capacity," said Trump.
Trump said the 15-percent tariff would apply across the board, including for Europe's crucial automobile sector, pharmaceuticals and semiconductors.
As part of the deal, Trump said the 27-nation EU bloc had agreed to purchase "US$750 billion worth of energy" from the United States, as well as make US$600 billion in additional investments.
Von der Leyen said the "significant" purchases of US liquefied natural gas, oil and nuclear fuels would come over three years, as part of the bloc's bid to diversify away from Russian sources.
Negotiating on behalf of the EU's 27 countries, von der Leyen 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.
"It will bring stability. It will bring predictability. That's very important for our businesses on both sides of the Atlantic," she said.
She said bilateral tariff exemptions had been agreed on a number of "strategic products," notably aircraft, certain chemicals, some agricultural products and critical raw materials.
Von der Leyen said the EU still hoped to secure further so-called "zero-for-zero" agreements, notably for alcohol, which she hoped to be "sorted out" in coming days.
Trump also said EU countries, which recently pledged to ramp up their defence spending within NATO, would be purchasing "hundreds of billions of dollars worth of military equipment."
'Best we could get'
The EU has been hit by multiple waves of tariffs since Trump reclaimed the White House.
It is currently subject to a 25-percent levy on cars, 50 percent on steel and aluminium, and an across-the-board tariff of 10 percent, which Washington threatened to hike to 30 percent in a no-deal scenario.
The bloc had been pushing hard for tariff carve-outs for critical industries from aircraft to spirits, and its auto industry, crucial for France and Germany, is already reeling from the levies imposed so far.
"Fifteen percent is not to be underestimated, but it is the best we could get," acknowledged von der Leyen.
Any deal will need to be approved by EU member states, whose ambassadors, on a visit to Greenland, were updated by the commission Sunday morning. They were set to meet again after the deal struck in Scotland.
German Chancellor Friedrich Merz rapidly hailed the deal, saying it avoided "needless escalation in transatlantic trade relations".
The EU had pushed for a compromise on steel that could allow a certain quota into the United States before tariffs would apply.
Trump appeared to rule that out, saying steel was "staying the way it is", but the EU chief insisted later that "tariffs will be cut and a quota system will be put in place" for steel.
'The big one'
While 15 percent is much higher than pre-existing US tariffs on European goods, which average around 4.8 percent, it mirrors the status quo, with companies currently facing an additional flat rate of 10 percent.
Had the talks failed, EU states had greenlit counter tariffs on US$109 billion of US goods including aircraft and cars to take effect in stages from Aug 7.
Trump has embarked on a campaign to reshape US trade with the world, and has vowed to hit dozens of countries with punitive tariffs if they do not reach a pact with Washington by Aug 1.
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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. 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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. 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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
What is the status of US tariff negotiations?
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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
