Von der Leyen and Trump strike EU-US trade deal with 15% tariff for the bloc
Under the agreed terms, finalised on Sunday by European Commission President Ursula von der Leyen and US President Donald Trump during a meeting in Scotland, the majority of EU exports bound for the American market will be subject to a 15% tariff.
The tariff for US exports bound for the EU market was not immediately clear.
The deal is preliminary and needs to be further fleshed out.
"I think it's great we made a deal today instead of playing games," Trump said at the end of the meeting. "I think it's the biggest deal ever made."
"It's a big deal. It's a huge deal," von der Leyen said. "It will bring stability, it will bring predictability. That's very important for businesses on both sides of the Atlantic."Von der Leyen noted the 15% tariff would be "across-the-board" and "all-inclusive", blocking the application of other duties."It was tough negotiations (but) we came to a good conclusion," she said, highlighting the "openness" of the EU market, which Trump had vehemently challenged.Both leaders shook hands to applause in the room."We were able to make a deal that's satisfactory to both sides, so it's a very powerful deal. It's the biggest of all the deals," Trump said.The 15% rate is lower than the 20% rate that Trump imposed, and later paused, in April as part of his contentious, self-styled "reciprocal tariffs", as well as the 30% rate that he threatened to slap in a letter sent to von der Leyen earlier this month.The 15% rate is also inferior to the rates that other countries have negotiated with the White House in recent days, including Indonesia (19%) and the Philippines (19%), and matches the number granted to Japan (15%), a G7 ally.Still, it represents a painful concession, considering the talks began with von der Leyen offering a "zero-for-zero" tariff agreement. Through the back-and-forth process, von der Leyen repeatedly warned that "all options", including a never-used instrument against economic coercion, were on the table in case of an undesirable scenario.As tensions mounted, the European Commission prepared several lists of retaliatory measures against US products worth €93 billion in total.Brussels never resorted to any tit-for-tat measure due to stark differences between member states. Some countries, like France and Spain, advocated a show of force against Washington, while others, like Germany and Italy, pushed for a quick deal.The ideological gap closed after Trump made his out-of-the-blue 30% threat, which prompted outrage across the bloc and hardened the mood towards retaliation.Before Trump's arrival disrupted transatlantic commerce, EU-made products were subject to an average tariff rate of 4.8% upon entering US territory. Sunday's deal presumably entails an additional 10% to reach the 15% mark.EU cars, which are today under a 27.5% tariff, will be brought under the 15% rate.A "zero-for-zero" scheme will apply to aircraft and related components, semiconductor equipment, critical raw materials and some chemical and agricultural products."We will keep working to add more products to this list," von der Leyen said.Additionally, she explained, the bloc commits to spending over $250 billion per year on purchasing American liquefied natural gas (LNG), oil and nuclear fuels to replace Russian energy. The total pledge will amount to about $700 billion by the end of Trump's term.Asked about what concessions, if any, the US had made in the talks, the Commission chief replied with a general remark about shared prosperity."The starting point was an imbalance, a surplus (of goods) on our side and a deficit on the US side. We wanted to rebalance the trade relation, and we wanted to do it in a way that trade goes on between the two of us across the Atlantic," she said."I think it's going to be great for both parties," Trump said.Sunday's meeting in Scotland took place amid sky-high expectations due to the looming deadline of 1 August that Trump had imposed to force nations to either offer far-reaching concessions or face punishing tariffs.Von der Leyen was accompanied by Maroš Šefčovič, the European Commissioner for Trade, who has been travelling across the two sides of the Atlantic Ocean in an attempt to gain a better understanding of the White House's maximalist demands.She was also joined by her powerful chef de cabinet, Björn Seibert; her trade advisor, Tomas Baert, and the Commission's director general for trade, Sabine Weyand.In the last stretch of negotiations, von der Leyen's team had realised that 15% was the lowest number that Trump was willing to settle for. The 15% rate was considered high for the bloc but palatable if paired with carve-outs for strategic sectors.A major concern along the way has been pharmaceuticals, which the EU exports in large volumes to the American market. The White House has opened a formal investigation into pharma products, a step that can pave the way for a tailor-made tariff.At the start of the meeting, Trump said pharma would be excluded from the deal."We have to have them built and made in the United States, and we want them made in the United States," Trump told reporters. "Pharmaceuticals are very special. We can't be in a position where (...) we're relying on other countries."At the end of the meeting, von der Leyen said EU-made drugs would fall under the 15% rate but admitted Trump could take further action to address the matter "globally"."15% is certainly a challenge for some, but we should not forget that it keeps us access to the American market," she admitted, noting the bloc would continue to diversify its trade partners to create greater opportunities for European exporters and investors.The saga might soon take another twist: next week, a federal appeals court in the US will begin hearing arguments in a closely-watched lawsuit challenging Trump's authority to slap across-the-board tariffs under the pretext of a national emergency. — Euronews
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Al Arabiya
33 minutes ago
- Al Arabiya
Trump officials told Congress Israel agreed to match $30 million for GHF: Sources
Senior Trump administration officials told Congress this month that Israel agreed to match a US award of $30 million to the Gaza Humanitarian Foundation, two sources familiar with the matter told Reuters, a previously unreported contribution to the controversial armed private aid operation. Aside from the US contribution, which the US State Department announced in June, the sources of the foundation's funding have been opaque - GHF does not disclose its donors. Israel faces intensifying international pressure over the humanitarian crisis in Gaza and its promotion of GHF's aid operation, which has distribution sites only in southern Gaza and has been called dangerous and ineffective by aid groups and the United Nations - claims the group denies. Aryeh Lightstone and Charles Leith, aides to Trump's Middle East envoy Steve Witkoff, briefed US Senate and House of Representatives committees on July 8 and 9 about the GHF operation, according to the two sources. They told the congressional committees that Israel had agreed to match the $30 million that the US awarded to GHF in June, enough to fund the organization through the end of July, according to the sources, who spoke on condition of anonymity. Lightstone and Leith did not respond to a request for an interview and the White House referred questions to the State Department. The State Department and Israeli government did not respond to requests for comment. President Donald Trump said on Monday that the US had dispensed $60 million for Gaza humanitarian aid. The State Department, however, has made no other announcements beyond the $30 million approved for the GHF in June. A third source familiar with the matter said some US officials believe Trump likely was conflating the US and Israeli funds. Lightstone and Leith told Congress the hope was that by August, other donors would see GHF's success and contribute to its operation, allowing the foundation to double its distribution sites from four to eight, according to the sources. Reuters could not verify whether Israel had disbursed the $30 million to GHF, which uses private for-profit US military and logistics firms to transport aid into the Palestinian enclave for distribution to its sites. Speaking on Wednesday to the Hudson Institute think tank, GHF Executive Chairman Rev. Dr. Johnnie Moore, a former evangelical adviser to the White House during Trump's first term, said that as a private US charity, the foundation did not have to disclose its donors. He indicated that GHF required more money. 'The biggest problem is just we need more of it, and $30 million is not going to get it done,' he said, in an apparent reference to the US contribution. GHF said in an email to Reuters that it was focused on distributing as much food as was safely possible and was continuing to press the Israeli government to allow it to open additional distribution sites, including in northern Gaza. It declined to comment on its donors or funding. Starvation in Gaza GHF has been criticized by the United Nations, aid groups and others over what they say is an unsafe aid distribution model and a breach of humanitarian impartiality standards, allegations that GHF denies. Israel alleges that the UN-led aid system that has traditionally served the residents of Gaza has let Hamas-led militants loot aid shipments intended for civilians. Hamas denies the accusation. A recent US government internal analysis found no evidence of systematic theft of US-funded aid by Hamas. Starvation has been spreading in Gaza, and a hunger monitor on Tuesday said a worst-case scenario of famine is unfolding and immediate action is needed to avoid widespread death. In his Wednesday remarks, Moore denied that famine is developing. 'That's made up. There's not a famine. There's acute hunger. There's not enough food in the Gaza Strip,' he said. Gaza health authorities have been reporting increasing deaths from hunger-related causes and images of emaciated Palestinian children have drawn international condemnation. Trump this week declared that many people were starving, contradicting Israeli Prime Minister Benjamin Netanyahu, who has said there was no starvation in the densely populated coastal enclave, largely destroyed by Israel's military offensive that has killed over 60,000 people according to Gaza health officials. Trump promised to set up new food centers and said the top priority in Gaza was feeding people. Gaza's food stocks have been running out since Israel, at war with Palestinian militant group Hamas since its fighters killed 1,200 people and took 251 hostages back to Gaza in October 2023 according to Israeli tallies, cut off all supplies to the territory in March. That blockade was lifted in May but with restrictions that Israel says are needed to prevent aid being diverted to militant groups. Israel says it has no aim to starve Gaza. This week it announced steps to allow more aid in, including pausing fighting in some locations, air-dropping food and offering more secure routes.
Al Arabiya
2 hours ago
- Al Arabiya
Canada to recognize Palestinian state in September, joining France and UK
In this episode of W News, presented by Leigh-Ann Gerrans, our top story is the growing push for Palestinian statehood. Canadian Prime Minister Mark Carney announced that Canada plans to recognize a Palestinian state at the UN General Assembly in September — a major policy shift that sparked an angry response from U.S. President Donald Trump and was swiftly rejected by Israel. Canada becomes the third G7 nation, after France and the United Kingdom, to signal plans to recognize Palestinian statehood in September. Manuel Hassassian – Palestinian ambassador to Denmark Jotam Confino – Middle East correspondent Yevheniia Kravchuk – Ukrainian MP Camille Nedelec – Correspondent Laurie Laird – Economist
Al Arabiya
4 hours ago
- Al Arabiya
European Union assumes its faces 15% tariffs in the US from Friday. But a key text still isn't ready
The European Union is working on the assumption that the US will impose a 15 percent tariff on most EU exports from Friday even though the two sides have yet to complete a key document clarifying how the agreement will operate. Last weekend US President Donald Trump and European Commission President Ursula von der Leyen reached a political agreement that would see 15 percent duties imposed on around two-thirds of EU produce worth around 380 billion euros (434 billion). The tariffs are set to enter force on Friday, but as of Thursday, the two sides were still working on a joint statement that would lay out the terms of their understanding, European Commission spokesman Olof Gill said. The document wouldn't be legally binding. 'It is the clear understanding of the European Union that the US will implement the agreed across the board tariff ceiling of 15 percent,' Gill said. The commission negotiates trade terms on behalf of the EU's 27 member countries. Carve-outs were agreed for a range of strategic goods like aircraft and aircraft parts, certain chemicals, some drug generics, or natural resources. Gill said that 'it is also our clear understanding that the US will implement the exemptions to the 15 percent ceiling.' 'The US has made these commitments. Now it's up to the US to implement them. The ball is in their court,' Gill said. European wine and spirits won't escape the 15 percent levy on Friday, but may do later as negotiations on additional exemptions to the new tariff regime continue, he said. Before Sunday's meeting, Trump had threatened the bloc with 30 percent tariffs, which the EU's top trade official said would effectively mean the end of trade between them. Over the last three months, the commission drew up retaliatory measures worth tens of billions of euros to enact should the talks fail. Those countermeasures are due to take effect on Aug. 7, but Gill said that if everything goes as expected, they would be frozen. 'If we have reached a deal, we don't need the retaliatory tariffs,' he said.
