EU and US

the United States and European Union have reached a trade deal, ending a months-long standoff between two of the world’s key economic partners.

After make-or-break negotiations between President Donald Trump and European Commission President Ursula Von der Leyen in Scotland, the pair agreed on a blanket US tariff on all EU goods of 15%. That is half the 30% import tax rate Trump had threatened to implement starting on Friday.

Trump said the 27-member bloc would open its markets to US exporters with zero per cent tariffs on certain products.

Von der Leyen also hailed the deal, saying it would bring stability for both allies, who together account for almost a third of global trade.

Trump has threatened tariffs against major US trade partners in a bid to reorder the global economy and trim the American trade deficit.

As well as the EU, he has also struck tariff agreements with the UK, Japan, Indonesia and Vietnam, although he has not achieved his goal of “90 deals in 90 days”.

Sunday’s deal was announced after private talks between Trump and Von der Leyen at his Turnberry golf course in South Ayrshire.

Trump – who is on a five-day visit to Scotland – said following a brief meeting with the European Commission president: “We have reached a deal. It’s a good deal for everybody.”

“It’s going to bring us closer together,” he added.

Von der Leyen also hailed it as a “huge deal”, after “tough negotiations”.

Under the agreement, Trump said the EU would boost its investment in the US by $600bn (£446bn), purchase hundreds of billions of dollars of American military equipment and spend $750bn on energy.

That investment in American liquified natural gas, oil and nuclear fuels would, Von der Leyen said, help reduce European reliance on Russian power sources.

“I want to thank President Trump personally for his personal commitment and his leadership to achieve this breakthrough,” she said.

“He is a tough negotiator, but he is also a dealmaker.”

The US president also said a 50% tariff he has implemented on steel and aluminium globally would stay in place.

Both sides can paint this agreement as something of a victory.

For the EU, the tariffs could have been worse: it is not as good as the UK’s 10% tariff rate, but is the same as the 15% rate that Japan negotiated.

For the US it equates to the expectation of roughly $90bn of tariff revenue into government coffers – based on last year’s trade figures, plus there’s hundreds of billions of dollars of investment now due to come into the US.

Trade in goods between the EU and US totalled about $975.9bn last year. Last year the US imported about $606bn in goods from the EU and exported around $370bn.

That imbalance, or trade deficit, is a sticking point for Trump. He says trade relationships like this mean the US is “losing”.

If he had followed through on tariffs against Europe, import taxes would have been levied on products from Spanish pharmaceuticals to Italian leather, German electronics and French cheese.

The EU had said it was prepared to retaliate with tariffs on US goods including car parts, Boeing planes and beef.

British Prime Minister Keir Starmer plans his own meeting with Trump at Turnberry on Monday.

Trump will be in Aberdeen on Tuesday, where his family has another golf course and is opening a third next month.

The president and his sons plan to help cut the ribbon on the new fairway.

In late July 2025, a high-stakes diplomatic moment unfolded: U.S. President Donald Trump and European Commission President Ursula von der Leyen announced a landmark trade deal that establishes a 15% all-inclusive tariff ceiling on most EU exports to the U.S., seeking to stabilize an increasingly tense transatlantic economic relationship European CommissionAl JazeeraBusiness StandardCNBCWorld Economic Forum.

Key Deal Highlights

• Tariff Ceiling of 15%: The agreement caps tariffs on EU exports—including critical sectors such as automobiles, semiconductors, pharmaceuticals, and lumber—at 15%, offering relief compared to the previously threatened 30% hike European CommissionAl JazeeraWorld Economic ForumBusiness StandardCNBC.

• Selective Exemptions: Certain strategic goods—such as aircraft and parts, generic pharmaceuticals, semiconductors, some agricultural goods, and raw materials—are exempt or eligible for zero or near-zero tariffs European CommissionBusiness Standardeuronews.

• EU Commitments: As part of the deal, the EU pledged to:

  • Purchase $750 billion worth of U.S. energy (natural gas, oil, nuclear fuel) over the next several years The White HouseAl Jazeeraeuronews.

  • Invest $600 billion in the U.S. economy across various sectors The White HouseWorld Economic Forumeuronews.

  • Increase American military and AI chip procurement, with some reports noting $40 billion in AI chip purchases euronewsNewsweek.

• Metals Tariff Standoff: U.S. tariffs on EU steel and aluminum remain at 50%, with discussions underway for quota mechanisms rather than immediate reduction The White HouseAl Jazeeraeuronews.

What’s at Stake: Stability with Strings Attached

The deal brings much-needed predictability after months of tariff threats poised to reach 30%; many European leaders saw this as a preferable alternative to a full-blown trade war World Economic ForumCNBCBusiness StandardThe TimesThe Sun. von der Leyen described it as “the best we could do” under pressure Business Standard.

However, critics have voiced concerns:

• Competitiveness under strain: European exporters now face much higher costs entering the U.S. market—rising from a historic average of just over 1% to a flat 15%, particularly affecting auto, pharmaceutical, and machinery sectors Business StandardWorld Economic ForumCofaceKiplinger.

• Political pushback: French Prime Minister François Bayrou called it a “dark day” for Europe, accusing the bloc of capitulating; Germany’s industrial leaders warned of a “huge negative impact” Al JazeeraWorld Economic Forum.

• Investor uncertainty: The elevated tariffs could slow economic growth and fuel inflation across the Eurozone The Wall Street Journal.

Sectoral Spotlight: Winners, Losers, & Transitional Trade-offs

• Automakers: While a 15% tariff is a significant reduction from the existing 27.5% charge, the pressure on margins remains intense. Volkswagen reported a loss of $1.5 billion in the first half of the year already; Mercedes-Benz anticipates higher prices for buyers Business Standard+1.

• Pharmaceuticals & Spirits: Firms like Rémy Cointreau have revised down their estimated U.S. tariff burdens—from €35 million to around €20 million—indicating some relief Reuters. Meanwhile, Irish exporters worry, with grants activated to help businesses adapt The Sun+1.

• Consumers: A ripple effect is expected: from pricier luxury cars and furniture to possible rises in generic medicine costs Kiplinger.

Final Thoughts

The EU–US trade deal is a pragmatic truce rather than a triumph. It staves off tariff escalation and provides short-term certainty. Yet, by locking in 15% tariffs—well above pre-Trump levels—it imposes a heavier toll on European exporters. The real test lies in whether this uneasy compromise becomes a springboard for greener, more balanced cooperation—or a heavier anchor dragging transatlantic trade into prolonged stagnation.