President Donald Trump and European Commission President Ursula von der Leyen|@vonderleyen|X
President Donald Trump announced on Sunday that the US and European Union reached a landmark trade deal, averting a major trade war.
The US will now impose a 15% baseline tariff on European imports, including cars, semiconductors, and pharmaceuticals. In exchange, the EU will purchase $750 billion in American energy products and invest $600 billion in the US economy.
President Trump called it his biggest trade achievement yet, following face-to-face talks with European Commission President Ursula von der Leyen in Scotland.
Key terms of agreement:
- Both sides agreed to eliminate tariffs on strategic goods like aircraft parts, certain chemicals, and semiconductor equipment.
- The deal also includes a framework to cut more tariffs and improve access for US firms in the EU market.
- Trump’s 50% tariff on global steel and aluminum imports remains unchanged, but Von der Leyen says some EU metals will get lower levies.
Global trade impact
Economists expect the tariff to raise consumer prices slightly but view it as manageable.
The US has recently signed similar deals with Japan, Vietnam, and Indonesia, using the 15% baseline as a new standard.
Business and market reaction
With over $5 billion in daily trade between the US and EU, financial markets welcomed the deal.
Analysts said it reduces uncertainty for companies worried about sudden tariff hikes. Talks with China, Mexico, and Canada are still ongoing.