Washington/Brussels: The United States and European Union have reached a trade agreement, setting a 15% unified tariff on most EU exports and averting the threat of a transatlantic trade war.
Finalized over the weekend at Turnberry, Scotland, after weeks of tense negotiations, the deal was publicly confirmed Monday by both President Donald Trump and European Commission President Ursula von der Leyen.
The deal sets a uniform 15% tariff ceiling on most EU exports to the US, covering key sectors including automobiles, semiconductors, and pharmaceuticals. "This 15% is a clear ceiling. No stacking. All-inclusive," von der Leyen said in a statement. She hoped that the move would give clarity to investors and manufacturers navigating global instability. Both sides also agreed to eliminate tariffs altogether on several categories of goods. The zero-for-zero list includes aircraft and parts, specific chemicals, generic medicines, semiconductor equipment, selected agricultural items, and critical raw materials.
Addressing the long-standing dispute over steel and aluminium, the two sides reached consensus on reducing tariffs and introducing a quota system. Energy cooperation was also expanded. Europe will increase its purchases of American LNG, oil, and nuclear fuels, aiming to reduce its reliance on Russian energy. The agreement also lays the groundwork for stronger collaboration in AI, with US-made chips expected to power EU’s AI gigafactories. The deal is also part of a broader EU push to strengthen its global trade position. Recent trade negotiations with Mercosur, Mexico, and Indonesia have wrapped up, expanding the EU’s portfolio of 76 trade partnerships. With global economic volatility on the rise, the EU sees this agreement as a building block toward a more resilient foreign economic policy. The transatlantic agreement, reached just weeks after the NATO summit, is being seen as a reaffirmation of the strategic partnership between the two economic giants, which together account for 44% of global GDP. The deal has been termed by analysts as a strategic win for the U.S., offering market clarity and reducing the risk of a trade war, though inflationary pressures for Europe remain a concern. Markets responded positively, stocks rallyied and the euro strengthened. President von der Leyen averted a full-scale trade war and brought 30–50% steep tariffs to 15%. EU secured zero-tariff exemptions for key sectors like pharmaceuticals, aircraft parts, chemicals, and semiconductors, restoring predictability for exporters. In return, the EU committed to $750 billion in U.S. energy imports and $600 billion in investments, including military equipment.
Hours after the US and EU tariff truce, the US and China are set to begin fresh talks in Sweden on Monday, to extend their trade ceasefire by another 90 days. The meeting will be led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng. The current truce, which temporarily paused tariff increases, is scheduled to expire on August 12.
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