US and EU agree on 15% tariff deal to avert a bigger trade war
US President Donald Trump and European Commission President Ursula von der Leyen announced the deal at Trump's luxury golf course in western Scotland after an hour-long meeting that pushed the hard-fought deal over the line.
"I think this is the biggest deal ever made," Trump told reporters, lauding EU plans to invest some $600 billion in the United States and dramatically increase its purchases of US energy and military equipment.
Trump said the deal, which tops a $550 billion deal signed with Japan last week, would expand ties between the trans-Atlantic powers after years of what he called unfair treatment of US exporters.
Von der Leyen, describing Trump as a tough negotiator, said the 15% tariff applied "across the board", later telling reporters it was "the best we could get."
"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, which Trump said calls for $750 billion of EU purchases of US energy in coming years and "hundreds of billions of dollars" of arms purchases, likely spells good news for a host of EU companies, including Airbus, Mercedes-Benz and Novo Nordisk, if all the details hold.
The baseline 15% tariff will still be seen by many in Europe as too high, compared with Europe's initial hopes to secure a zero-for-zero tariff deal, though it is better than the threatened 30% rate.
German Chancellor Friedrich Merz welcomed the deal, saying it averted a trade conflict that would have hit Germany's export-driven economy and its large auto sector hard. German carmakers, VW, Mercedes and BMW were some of the hardest hit by the 27.5% US tariff on car and parts imports now in place.
The euro rose around 0.2% against the dollar, sterling and yen within an hour of the deal's being announced.
Mirror of Japan deal
The deal mirrors key parts of the framework accord reached by the US with Japan last week, but like that deal, it leaves many questions open, including tariff rates on spirits, a highly charged topic for many on both sides of the Atlantic.
Carsten Nickel, deputy director of research at Teneo, said it was "merely a high-level, political agreement" that could not replace a carefully hammered out trade deal: "This, in turn, creates the risk of different interpretations along the way, as seen immediately after the conclusion of the U.S.-Japan deal."
"We are agreeing that the tariff ... for automobiles and everything else will be a straight-across tariff of 15%," Trump said, but he quickly added that a 50% US tariff on steel and aluminium will remain in place. Von der Leyen said that tariffs would be cut and replaced with a quota system.
Von der Leyen said the rate also applied to semiconductors and pharmaceuticals, and there would be no tariffs from either side on aircraft and aircraft parts, certain chemicals, certain generic drugs, semiconductor equipment, some agricultural products, natural resources and critical raw materials.
Trump appeared to suggest pharmaceuticals would not be covered, leaving some question about that aspect of the deal. No fact sheet was immediately issued by the White House.
"We will keep working to add more products to this list," von der Leyen said, adding that spirits were still under discussion.
The deal will be sold as a triumph for Trump, who is seeking to reorder the global economy and reduce decades-old US trade deficits, and has already reached similar framework accords with Britain, Japan, Indonesia and Vietnam, although his administration has not hit its goal of "90 deals in 90 days."
Arriving in Scotland, Trump said 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".
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