US–EU trade pact avoids 30% tariffs and outlines US$600 billion in investment and new zero-tariff goods
The European Union has committed to purchase US$750bn in US energy and invest an additional US$600bn in the country.
The commitments are part of a new trade deal that sets a flat 15 percent tariff on most goods, according to announcements made by US President Donald Trump and European Commission President Ursula von der Leyen at Trump’s golf course in Scotland.
As reported by Reuters, the agreement averts the imposition of a 30 percent tariff on EU imports that Trump had threatened to enforce starting August 1.
The 15 percent baseline—now applicable across most categories including automobiles, semiconductors and consumer goods—was described by von der Leyen as “across the board, all inclusive.”
Trump called the result “a giant deal with lots of countries” and “a good deal for everybody.”
Von der Leyen stated the deal would provide “stability and predictability” to companies on both sides of the Atlantic, while acknowledging that the final terms were “the best we could do.”
According to AP News, she said both sides agreed to zero tariffs on selected “strategic” goods, including aircraft and aircraft parts, some chemicals, semiconductor equipment, select agricultural products, and certain raw materials.
The deal comes after months of negotiations and rising trade tensions.
As per The Canadian Press, von der Leyen was joined by senior EU officials including Maros Sefcovic and Sabine Weyand during the private meeting at Turnberry that ultimately pushed the agreement forward.
The announcement followed Trump’s warning earlier in July that, without a deal, the US would proceed with 30 percent tariffs on EU goods.
Although the 15 percent tariff rate avoids that escalation, AP News noted that it raises average US tariffs on EU goods from 1.2 percent to 17 percent, with economists at Capital Economics projecting a 0.5 percent hit to EU GDP.
EU officials, according to Reuters, have flagged concerns over the lack of legal detail.
A joint statement is expected soon, though it will not yet be legally binding.
The steel and aluminium sectors remain excluded from the deal.
Trump confirmed that the 50 percent tariff on those imports will stay in place, while von der Leyen said the two sides agreed to continue discussions on quotas and future tariff adjustments.
Pharmaceuticals are also excluded and, according to von der Leyen, are being addressed separately.
In the automotive sector, AP News reported that the EU will reduce its tariff on US car imports from 10 percent to 2.5 percent.
For European manufacturers, the new 15 percent US rate is notably lower than the 27.5 percent previously in place, which included Trump’s 25 percent tariff plus an existing 2.5 percent base rate.
Mercedes-Benz dealers in the US have held prices steady for now, but the company expects “significant increases” over time. Volkswagen reported a €1.3bn hit in the first half of the year due to tariffs.
As per CBC, the EU’s earlier negotiating position had pushed for a zero-for-zero tariff arrangement. The compromise reached on Sunday mirrors some elements of the recent US–Japan deal, including the uniform 15 percent rate, but also shares a similar lack of detailed terms.
Tariff decisions on alcohol and spirits remain unresolved.
The framework agreement is politically significant, but officials from both sides—cited AP News—stated that key parts of the deal still require further negotiation.
The US administration retains the option to raise tariffs if European investment commitments fall short.
The EU had prepared countermeasures, as reported by Reuters, with tariffs on US$150bn in American goods. Some EU member states also pushed for use of the bloc’s anti-coercion instrument to target US services had talks broken down.
Trump has cited the US$235bn US merchandise trade deficit with the EU in 2024 as justification for the tariffs. EU officials have responded by pointing to the US surplus in services, including cloud computing, travel, legal, and financial services.
The total trans-Atlantic trade volume stands at about €1.7tn annually.
Together, the US and EU account for 44 percent of global GDP, making the outcome of this negotiation significant for firms with exposure to international trade flows, market access, and cross-border investment strategies.
