EU and US agree tariff deal after months of fractious talks

Irish Times

27-07-2025

The European Union and United States have agreed a deal that will lock in tariffs on most EU imports to the US, but prevent the prospect of an economically devastating trade war, sources said on Sunday evening.
The final terms were worked out during a meeting between
European Commission
president
Ursula von der Leyen
and US president
Donald Trump
at his Turnberry golf resort in Scotland.
The EU hopes the deal will draw a line under months of uncertainty, shifting deadlines and threats from Mr Trump, which have defined the fractious trade negotiations.
Speaking before the meeting on Sunday, Mr Trump indicated pharmaceuticals might not be covered by the terms of any agreement, signalling coming tariffs on the sector.
'We have to have them made in the United States, we want them made in the United States ... We can't be in a position where we're relying on other countries,' he said.
Mr Trump flew to Scotland on Friday night and was then
seen playing golf
at his Turnberry resort on Saturday and again on Sunday.
Ms von der Leyen, head of the EU executive that has been negotiating with the Trump administration, was pushing to get a preliminary deal on tariffs over the line after months of talks.
Speaking to reporters before the start of the meeting on Sunday afternoon, Mr Trump said there were three or four 'sticking points' between the parties.
'I think the main sticking point is fairness,' he said.
Mr Trump said he felt Europe needed to open up its market to American agricultural products, a nod to EU rules that ban chlorine-washed chicken or hormone-treated beef.
'They have to open to American products,' he said.
'We do a deal today with the European Union that will be the end of it, we'll go a number of years before we have to discuss it again.'
Mr von der Leyen, who described Mr Trump as a 'tough negotiator' and deal maker, said: 'I think the president is right, we have a 50-50 per cent chance to strike a deal.'
Negotiators had been working towards an agreement that would see the EU accept blanket tariffs of 15 per cent on future trade with the US.
European governments appeared resigned to stomaching that level of tariffs on future trade in order to end the uncertainty Mr Trump's threat of potentially much higher import levies has created in the European economy, or a possible US-EU trade war if no deal was agreed.
The EU believed a deal was close to being done for the last number of days, pending final sign-off from Mr Trump.
The commission briefed ambassadors from the EU's 27 states on Sunday, giving diplomats an update on where talks stood before Ms von der Leyen and Mr Trump sat down together.
US commerce secretary Howard Lutnick travelled from Washington to Scotland on Saturday, with EU trade commissioner Maros Sefcovic flying in from Brussels.
Senior commission figures were in contact with officials from the Japanese government over the weekend in order to gauge how the very final stages of their negotiations played out behind the scenes as a US tariff deal was agreed last week.
That agreement saw Japan accept 15 per cent tariffs on its products sold to the US.
Cars produced in the EU and sold in the US have faced 25 per cent import duties, while steel and aluminium products have been charged twice that amount.
US president Donald Trump playing a round of golf at his Turnberry golf resort in Scotland on Sunday. Photograph:A 10 per cent tariff has applied to nearly all trade since the start of April, with two sectors, pharmaceuticals and computer chips, exempt from those measures. Mr Trump has promised to introduce steeper tariffs targeting pharma and semiconductors later.
The EU is hoping to secure commitments that future tariffs on pharma, and existing rates on cars, would be capped at 15 per cent.
Mr Trump has said the US will impose tariffs of 30 per cent on practically all imports from the EU from August 1st in the event no agreement is reached.
In such a scenario the EU has said it will hit back with its own 30 per cent tariffs on €93 billion of US trade.
France, Germany and many other EU states are prepared to back the EU opening an investigation to determine if it is facing economic coercion, allowing the bloc to turn to emergency powers in an escalating trade war. The EU's anti-coercion instrument, known as the 'big bazooka', would allow the union to restrict the European operations of US multinationals and tech giants, and introduce export controls on transatlantic trade.
Meanwhile, EU commissioner Michael McGrath has said that the European Union is 'aggressively extending' its network of international trade agreements, having recently concluded deals with Mexico, Switzerland, Indonesia and the Mercosur South American trade bloc.
He said that the meeting between Mr Trump and the president of the European Commission is a 'significant and decisive moment', with hopes for a tariff deal.
The EU is also in trade negotiations with India, Thailand, the Philippines and the UAE as the escalating trade war between Washington and the European bloc continues, Mr McGrath, the EU commissioner for justice and consumer protection, said.
The EU's objective is to reach a 'comprehensive final settlement' on all outstanding trade issues, including pharmaceuticals, Mr McGrath told RTÉ's This Week radio programme on Sunday. The 'ideal scenario' would be agreement on a 'zero-for-zero deal' on a range of goods, he added.
However, if the US pushes ahead with its threatened 30 per cent tariffs on EU goods, the EU is ready with counter-tariffs on €93 billion worth of US exports, he said.
'The terms of trade that we had up to just six months ago are no longer available. The world has changed, and we have had major disruption to the system of global trade. We have to recognise the reality.'
Asked to comment on the rapidly deteriorating humanitarian and starvation crisis in Gaza, and the EU's reluctance to place sanctions on Israel, Mr McGrath said the EU was doing 'all that it possibly can to achieve progress on the ground' within its 'limited mandate'.
Unfortunately the EU 'does not speak with one voice on this issue', he said.
Police snipers are positioned on the roof of the Trump Turnberry hotel during US president Donald Trump's visit in Turnberry, Scotland. Photograph: Getty Images
Hundreds of protesters gathered in both Edinburgh and Aberdeen for demonstrations against Mr Trump's visit, organised by the Stop Trump Coalition.
Mr Trump has said there was a 50-50 chance that the US and the 27-member European Union could reach a framework trade pact, adding that Brussels wanted to 'make a deal very badly'.
- Additional reporting Reuters and PA