US-Europe trade deal: Trump, Von der Leyen ink deal moments before tariff deadline – What we know so far
The deal was struck just days before the 1 August deadline.
The agreement helps avert a steep hike in tariffs on European goods and provides relief to many industries across the region.
At the center of the deal is a decision to impose a 15 per cent tariff on most EU products, down from the threatened 30 per cent.
Both sides also agreed to make some exceptions for certain goods. The new rate is higher than the previous average of 4.8 percent. However, it matches what businesses are already paying after Trump introduced a 10 per cent flat tariff in April.
Why the EU trade deal matters: Experts weigh in
Last week's trade deal is very important for Europe, especially its car industry, as the automobile sector provides jobs for 13 million people.
Before, the industry had to pay a 25 percent tax on top of the old 2.5 percent, so the new lower rate of 15 percent is a big plus point.
Jacob Funk Kirkegaard of the Peterson Institute For International Economics hailed the deal.
'Obviously, it is good news for the car industry. So Germany will be happy.
And all the EU members with auto supply chains, they go from 27.5 to 15 percent,' Kirkegaard was quoted as saying to news agency AFP.
However, Elvire Fabry from the Jacques Delors Institute said the new rate would still be 'costly' for German carmakers.
$750 billion energy deal
Sunay's agreement also includes a major energy deal. The EU is set to buy $750 billion worth of US liquefied natural gas, oil and nuclear fuels over three years, replacing Russian energy supplies.
In return, EU investments in the US are set to increase by another $600 billion.
Trump added that European countries would be buying 'hundreds of billions of dollars' worth of military equipment' from the US.
Which goods dodge the 15% tariff?
Most sectors fall under the 15 per cent rule, but some key European industries will get special treatment.
Von der Leyen said exemptions were agreed for aircraft, some chemicals, semiconductor equipment, certain agricultural products and critical raw materials.
These bilateral exemptions are meant to protect vulnerable industries, such as pharmaceuticals, a vital export for Ireland. Trump had earlier hinted at much steeper tariffs, threatening 200 per cent levies on drugs.
A separate compromise was also reached on steel, which currently faces a 50 per cent tariff.
Von der Leyen explained, 'Between us, tariffs will be cut and a quota system will be put in place." The new rule means EU steel will only face 50 per cent tariffs once a certain limit is crossed.
The deal is not yet final. EU ambassadors are set to meet Monday morning to review it, and more talks are needed to solidify the remaining issues. 'Details have to be sorted out, and that will happen over the next weeks,' von der Leyen said.
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