AJOT: US and EU clinch deal with broad 15% tariffs on EU goods to avert trade war

Reuters – By Andrew Gray and Andrea Shalal | Jul 27 2025 at 07:45 PM | International Trade  

President Donald Trump on Sunday said the United States and the European Union had reached agreement on a trade deal that includes a 15% tariff on EU goods entering the U.S. and significant EU purchases of U.S. energy and military equipment.

The announcement came after European Commission President Ursula von der Leyen travelled for talks with U.S. President Donald Trump at his golf course in western Scotland to push a hard-fought deal over the line.

“I think this is the biggest deal ever made,” Trump told reporters after an hour-long meeting with von der Leyen, who said the 15% tariff applied “across the board”.

“We have a trade deal between the two largest economies in the world, and it’s a big deal. It’s a huge deal. It will bring stability. It will bring predictability,” she said.

The deal, that also includes $600 billion of EU investments in the United States and significant EU purchases of U.S. energy and military equipment, will indeed bring clarity for EU companies.

However, the baseline tariff of 15% will be seen by many in Europe as a poor outcome compared to the initial European ambition of a zero-for-zero tariff deal, although it is better than the threatened 30% rate.

The deal mirrors parts of the framework agreement the United States clinched with Japan last week.

“We are agreeing that the tariff… for automobiles and everything else will be a straight across tariff of 15%,” Trump said. However, the 15% baseline rate would not apply to steel and aluminium, for which a 50% tariff would remain in place.

Trump, who is seeking to reorder the global economy and reduce decades-old U.S. trade deficits, has so far reeled in agreements with Britain, Japan, Indonesia and Vietnam, although his administration has failed to deliver on a promise of “90 deals in 90 days.”

He has periodically railed against the European Union saying it was “formed to screw the United States” on trade. 

Arriving in Scotland, Trump said that the EU wanted “to make a deal very badly” and said, as he met von der Leyen, that Europe had been “very unfair to the United States”. 

His main bugbear is the U.S. merchandise trade deficit with the EU, which in 2024 reached $235 billion, according to U.S. Census Bureau data. The EU points to the U.S. surplus in services, which it says partially redresses the balance. Trump also talked on Sunday about the “hundreds of billions of dollars” that tariffs were bringing in.

On July 12, Trump threatened to apply a 30% tariff on imports from the EU starting on August 1, after weeks of negotiations with the major U.S. trading partners failed to reach a comprehensive trade deal.

The EU had prepared countertariffs on 93 billion euros ($109 billion) of U.S. goods in the event there was no deal and Trump had pressed ahead with 30% tariffs. 

Some member states had also pushed for the bloc to use its most powerful trade weapon, the anti-coercion instrument, to target U.S. services in the event of a no-deal.