US-EU deal sets a 15% tariff on most goods and averts the threat of a trade war with a global shock
The sweeping announcement came after President Donald Trump and European Commission chief Ursula von der Leyen met briefly at Trump's Turnberry golf course in Scotland. Their private sit-down culminated months of bargaining, with the White House deadline Friday nearing for imposing punishing tariffs on the EU's 27 member countries.
"It was a very interesting negotiation. I think it's going to be great for both parties," Trump said. The agreement, he said, was "a good deal for everybody" and "a giant deal with lots of countries."
Von der Leyen said the deal "will bring stability, it will bring predictability, that's very important for our businesses on both sides of the Atlantic."
Many facets will require more work
As with other, recent tariff agreements that Trump announced with countries including Japan and the United Kingdom, some major details remain pending in this one.
Trump said the EU had agreed to buy some $750 billion worth of U.S. energy and invest $600 billion more than it already is in America -- as well as make a major military equipment purchase. He said tariffs "for automobiles and everything else will be a straight across tariff of 15%" and meant that U.S. exporters "have the opening up of all of the European countries."
Von der Leyen said the 15% tariffs were "across the board, all inclusive" and that "indeed, basically the European market is open."
At a later news conference away from Turnberry, she said the $750 billion in additional U.S. energy purchases was actually over the next three years -- and would help ease the dependence on natural gas from Russia among the bloc's countries.
"When the European Union and the United States work together as partners, the benefits are tangible," Von der Leyen said, noting that the agreement "stabilized on a single, 15% tariff rate for the vast majority of EU exports" including cars, semiconductors and pharmaceuticals.
"15% is a clear ceiling," she said.
But von der Leyen also clarified that such a rate wouldn't apply to everything, saying that both sides agreed on "zero for zero tariffs on a number of strategic products," like all aircraft and component parts, certain chemicals, certain generic drugs, semiconductor equipment, some agricultural products, natural resources and critical raw materials.
It is unclear if alcohol will be included in that list.
"And we will keep working to add more products to this list," she said, while also stressing that the "framework means the figures we have just explained to the public, but, of course, details have to be sorted out. And that will happen over the next weeks."
Further EU approval needed
In the meantime, there will be work to do on other fronts. Von der Leyen had a mandate to negotiate because the European Commission handles trade for member countries. But the Commission must now present the deal to member states and EU lawmakers, who will ultimately decide whether or not to approve it.
Before their meeting began, Trump pledged to change what he characterized as "a very one-sided transaction, very unfair to the United States."
"I think both sides want to see fairness," the Republican president told reporters.
Von der Leyen said the U.S. and EU combined have the world's largest trade volume, encompassing hundreds of millions of people and trillions of dollars and added that Trump was "known as a tough negotiator and dealmaker."
"But fair," Trump said.
Trump has spent months threatening most of the world with large tariffs in hopes of shrinking major U.S. trade deficits with many key trading partners. More recently, he had hinted that any deal with the EU would have to "buy down" a tariff rate of 30% that had been set to take effect.
But during his comments before the agreement was announced, the president was asked if he'd be willing to accept tariff rates lower than 15%, and he said "no."
First golf, then trade talk
Their meeting came after Trump played golf for the second straight day at Turnberry, this time with a group that included sons Eric and Donald Jr. In addition to negotiating deals, Trump's five-day visit to Scotland is built around golf and promoting properties bearing his name.
A small group of demonstrators at the course waved American flags and raised a sign criticizing British Prime Minister Keir Starmer, who plans his own Turnberry meeting with Trump on Monday.
Other voices could be heard cheering and chanting "Trump! Trump!" as he played nearby.
On Tuesday, Trump will be in Aberdeen, in northeastern Scotland, 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 course.
The U.S. and EU seemed close to a deal earlier this month, but Trump instead threatened the 30% tariff rate. The deadline for the Trump administration to begin imposing tariffs has shifted in recent weeks but is now firm and coming Friday, the administration insists.
"No extensions, no more grace periods. Aug. 1, the tariffs are set, they'll go into place, Customs will start collecting the money and off we go," U.S. Commerce Secretary Howard Lutnick told "Fox News Sunday" before the EU deal was announced. He added, however, that even after that "people can still talk to President Trump. I mean, he's always willing to listen."
Without an agreement, the EU said it was prepared to retaliate with tariffs on hundreds of American products, ranging from beef and auto parts to beer and Boeing airplanes.
If Trump eventually followed through on his threat of tariffs against Europe, meanwhile, it could have made everything from French cheese and Italian leather goods to German electronics and Spanish pharmaceuticals more expensive in the United States.
"I think it's great that we made a deal today, instead of playing games and maybe not making a deal at all," Trump said. "I think it's the biggest deal ever made."
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Japan Times
2 hours ago
- Japan Times
Early 2026 U.S. midterm ads focus on Medicaid access and Trump tax cuts
Residents of Columbus, Indiana awoke last week to a yellow billboard purchased by the Democratic National Committee blaring: "Under Trump's Watch, Columbus Regional Health is Cutting Medical Services." Meanwhile, the National Republican Congressional Committee, which oversees races for the U.S. House of Representatives, this month launched a digital ad campaign touting U.S. President Donald Trump's tax cuts and blaming Democrats for spiking inflation. As members of Congress return to their home districts for the August recess, the Democratic and Republican parties are launching ad blitzes centered around the tax-cut and spending bill Trump signed into law on July 4, in an unofficial start to the 2026 midterm election campaign. Democrats are focusing their message around access to health care, three party operatives and three officials from allied groups said. Republicans are countering that the tax provisions will put more money in voters' pockets — particularly wage workers and seniors, four party operatives said. The bill makes permanent Trump's 2017 tax cuts and funds his immigration enforcement crackdown, while reducing health care and food aid. It devotes $170 billion to immigration enforcement while cutting $1.1 trillion from Medicaid and other public health programs and $186 billion in food assistance. The nonpartisan Congressional Budget Office estimated that 10 million people would lose their health insurance by 2034 as a result of the bill, and that the tax provisions and increased immigration and military spending would increase the federal deficit by $3.4 trillion over the next decade. "How voters feel about Trump and the economy may be the most important factor next fall — but so is how voters feel about the Republican response to their concern," said Jacob Rubashkin, a nonpartisan analyst with Inside Elections. Republican strategists concede that Democrats, who campaigned against the bill while it was working its way through the Republican-controlled House and Senate, are starting with an upper hand in messaging around the legislation. But they say they have plenty of time to sell the bill's benefits. "We will use every tool to show voters that the provisions in this bill are widely popular,' said Mike Marinella, a spokesman for the NRCC. And the party has a cash advantage. The RNC had $81 million in cash at the end of June, according to Federal Election Commission data, compared to the DNC's $15 million during the same period. The DNC has trailed the RNC in fundraising in the first half of the year at the same time as it has deepened its financial commitments, spending in every state, FEC disclosures show. The RNC also enjoys a huge asset in a sitting president who is still holding fundraisers for big-ticket donors. "At the end of the day, Democrats got a jump start on messaging,' said a Republican Senate operative who asked to remain anonymous to discuss party strategy. "They have won the battle. Now we have to focus on winning the war.' Republicans can only afford a net loss of two of the 220 seats they hold in the House to maintain control. In the Senate, they have a 53-47 advantage. 'Critical opportunity' The messaging battle, largely focused on battleground states and districts, is key to defining the bill in the minds of voters. "The bill is currently unpopular, and there's been a lot of conversation among Republicans about how to refocus on the more popular aspects and use the upcoming recess to sell the bill to skeptical voters,' Rubashkin said. According to a Reuters/Ipsos poll, conducted last month as the bill was moving through Congress, some 64% of registered voters oppose cuts to Medicaid and food stamps in return for lower taxes for everyone. Democrats are seizing on that sentiment, pushing the idea that Republicans have taken away health care to pay for tax giveaways for billionaires. The DNC has purchased billboards in a handful of Republican districts facing reduced services and shutdown of rural hospitals and health facilities. "Republicans threw working families under the bus to fund tax cuts for the wealthy, and we'll never let them — or voters — forget that,' said DNC Deputy Communications Director Abhi Rahman in a statement to Reuters. "This will define the midterms.' Republicans say the bill's provisions on tips, overtime and Social Security show the party is focused on issues affecting working families. They also point to a $50 billion fund the bill establishes to help rural hospitals. In a memo earlier this month, the National Republican Senatorial Committee encouraged candidates to talk about the bill in personalized terms, highlighting "service industry workers who will keep more of their hard-earned tips,' "first responders and critical workers who will keep more of their overtime pay' and "working parents and caretakers who benefit from increased tax credits for child and dependent care.' Another Republican strategy memo prepared by Tony Fabrizio and David Lee, Trump's pollsters, urges candidates to "lead on kitchen-table issues." The memo was commissioned by One Nation, a super PAC that last week launched a $10-million-plus TV and digital ad blitz playing up the tax features of the bill. The ads will air in states like Georgia and Texas where Republicans are defending seats. Another Republican PAC, Americans for Prosperity, the conservative advocacy group founded by Charles Koch and the late David Koch, will launch a TV and digital ad campaign in key districts next month, said Bill Riggs, a spokesperson for AFP. And the American Action Network is running TV and digital ads in 29 battleground congressional districts in Arizona, California, New York and Pennsylvania, emphasizing tax cuts and border security. "It's a new America, full of hope, thanks to President Trump and House Republicans," the ad intones. 'Trump tax' Democrats, meanwhile, are trying to tie Medicaid cuts to reduced health care access and higher costs. The DNC's website claims that the bill will "cost the poorest 10% of households $1,600 a year while raising the income of the richest 10% of Americans by $12,000 a year." Unrig Our Economy, a left-leaning outside group focused on populist economic messaging, is running ads in Iowa, Arizona and Pennsylvania depicting voters voicing frustration at their Republican lawmakers for voting for Trump's bill. "I'm so angry that Congresswoman Mariannette Miller-Meeks just voted for the largest cut to Medicaid in history to give tax breaks to billionaires,' said one ad running in Iowa, featuring a Davenport resident identified as Maria. The group plans to spend $7 million by the end of the year, according to spokesperson Kobie Christian. On Monday the group launched a "multi-million dollar' ad campaign focused on the Medicaid cuts in four Texas congressional districts. Protect Our Care, a left-leaning health care advocacy organization, said it plans to spend up to $10 million on ads in the first half of next year, largely focused on urging Republican lawmakers to restore funding to Medicaid. "Republicans won't be able to spin their way out of their parents being kicked out of a nursing home,' said Brad Woodhouse, the group's executive director. Environmental groups are also targeting the bill's rollback of clean energy incentives. Climate Power and the League of Conservation Voters spent $500,000 on an ad pressuring lawmakers in six congressional districts to vote against the bill, claiming that it will increase electricity rates, according to League of Conservation Voters President Pete Maysmith. "The bill just happened, so let's start communicating with people when it's fresh and happening,' said Maysmith. "We don't want to show up later and try to pick up that conversation.'
The Mainichi
4 hours ago
- The Mainichi
Japan warns of US tariffs after trade deal reached: monthly report
TOKYO (Kyodo) -- The government on Tuesday warned of downside risks to the Japanese economy stemming from U.S. tariffs in its first monthly report after Japan struck a trade deal with the United States that set a tariff rate lower than initially threatened. The government still maintained its overall view that the domestic economy is recovering moderately in its economic report for July, citing a pickup in consumer spending and improvement in employment and income conditions. The report said it was positive that the deal removed "uncertainty" for the economic outlook but added that the impact of U.S. tariffs, which are still higher than those before U.S. President Donald Trump took office, has been observed "in some areas." Export volumes of autos for the United States have remained nearly flat in recent months compared with a year earlier but Japanese automakers have cut prices of vehicles for the U.S. market or boosted shipments of low-price products. Such efforts to mitigate the impact of an increased tariff of 27.5 percent imposed on U.S-bound cars in April are squeezing their profitability. Japan and the United States agreed on 15 percent tariffs on cars and other products last week in Washington. Trump said earlier in the month that the world's biggest economy would impose 25 percent tariffs on imports from Japan starting Aug. 1 under "reciprocal" tariffs. The assessment of overall exports was revised down to "almost flat" from "showing movements of picking up," citing a pause in machinery shipments to other Asian countries, the Cabinet Office said. The government said separately the same day in its annual white paper that Japan is at a "critical juncture" over whether it can shift to growth driven by wage increases. Japanese companies offered the highest pay increases in decades last year and agreed on similar wage growth this year but risks from the U.S. tariffs and inflation could hinder the economy from getting on a steady growth path. The paper said the U.S trade policy could affect the broader Japanese economy, possibly undermining corporate hiring and capital spending and private consumption. "It is important to continue careful analysis of the effects of tariff measures and to take every possible step to minimize their impact on domestic industries and the economy," the paper said.
The Diplomat
4 hours ago
- The Diplomat
Thailand, Cambodia Dispute Status of Border Ceasefire
Uncertainty surrounds the status of a ceasefire agreed by Thailand and Cambodia yesterday, with the two nations seemingly at odds as to whether their agreement was still in effect. Yesterday, Cambodian Prime Minister Hun Manet and Thailand's acting Prime Minister Phumtham Wechayachai agreed to an 'immediate and unconditional' ceasefire after more than two hours of talks hosted by Prime Minister Anwar Ibrahim in Malaysia. The agreement came into effect at midnight last night. However, just as world leaders were expressing their relief at the cessation of hostilities, the Thai army alleged this morning that Cambodia had launched attacks in multiple areas after the ceasefire was supposed to take effect, and that Thai soldiers had responded with defensive actions. 'Such actions represent a deliberate violation of the ceasefire and a serious breach of trust,' Maj. Gen. Vithai Laithomya said in a statement quoted by the Associated Press. Cambodia's government said there had been 'no armed conflict on all front lines' and that the ceasefire continued to hold. A Thai government spokesperson later said that it was gathering evidence of the Cambodian violations and would submit them in due course to Malaysia, the United States, and China, the nations that attended yesterday's meeting in Putrajaya. As the AP reported from the Thai side of the border, 'it was unclear if fighting was continuing but signs of calm returned in places. Some families displaced by the fighting began returning to their homes.' The ceasefire agreement was intended to end five days of intense fighting, which began on the morning of July 24, when fighting broke out between Cambodian and Thai soldiers close to Ta Moan Thom, an Angkorian temple close to the border between Thailand's Surin province and Cambodia's Oddar Meanchey province. Clashes then erupted along other parts of the border, involving heavy weaponry, including rockets, artillery, and in the case of the Royal Thai Air Force, F-16 fighter jets. As of yesterday, the fighting had killed at least 34 people and displaced more than 270,000, as per Nikkei Asia. In a press conference yesterday announcing the agreement, Anwar said that in order to stabilize the situation, military commanders from both sides had agreed to meet at 7 a.m. today and that there will be a meeting of the bilateral General Border Committee Cambodia on August 4. Anwar said that Malaysia, as the current chair of the Association of Southeast Asian Nations (ASEAN), 'stands ready to coordinate an observer team to verify and ensure its implementation.' The two governments also appeared to diverge on the question of whether the scheduled meeting of military commanders would take place as scheduled today. Cambodia's Defense Ministry spokesperson said that military leaders held meetings at 7 a.m. and 10 a.m. this morning, while Thai media reports suggested that the meetings were pushed back to 10 a.m. and then 'postponed indefinitely,' which one report put down to the unavailability of two Cambodian generals. Both things obviously can't be true, and by the time this article is published, the situation will likely have become clear, for better or worse. But even if the ceasefire holds, the uncertainty points to the dearth of trust and poor lines of communications between the two sides – something that poses serious challenges to the stabilization of the border region. It also suggests that a conclusive resolution of the long-running border dispute, which has its origins in disagreements over Franco-Siamese border treaties signed in 1904 and 1907, remains an extremely remote prospect. As I noted in a lengthy article yesterday, the dispute touches on deep questions of national identity that have infused contested tracts of border territory with an almost sacred status. In this context, the loss of territory, however insignificant in strategic or economic terms, is something that neither government can countenance if it wants to retain a shred of domestic legitimacy. Any final resolution of the dispute would require both Thai and Cambodian leaders to restore the mutual trust that has been all but destroyed by the conflict. It would then require them to muster the political will to initiate border demarcation efforts and the political capital to make compromises on core nationalist demands. In the absence of any of these conditions, the two governments may well find that there is more political utility in an unsettled border than in a conclusively demarcated one.
