US and EU
strike trade deal setting 15 percent tariff
Washington
and Brussels clinch agreement days before President Donald Trump’s deadline to
do a deal or face higher tariffs.
July 27,
2025 7:37 pm CET
By Koen
Verhelst and Myah Ward
https://www.politico.eu/article/us-and-eu-strike-trade-deal/
TURNBERRY,
Scotland — The United States and European Union struck a trade agreement on
Sunday locking in a 15 percent tariff, days before Donald Trump’s deadline to
do a deal or face tariffs double that level.
Trump,
speaking after meeting European Commission President Ursula von der Leyen at
his Turnberry golf club in Scotland, announced the deal to U.S. reporters.
“This is the
biggest one of them all,” Trump said after a meeting that lasted around an
hour.
Von der
Leyen, who flew in at short notice to meet Trump, said: “It was heavy lifting
we had to do. But many thanks also for the talks we had many times on the way
to our goal — but now we made it.”
Trump,
reading from a paper, said the EU will agree to purchase $750 billion of
energy. It will also agree to invest $600 billion more than planned in the U.S.
The tariff
rate applying to imports from the EU would be 15 percent. Von der Leyen,
speaking at a later news conference, said this would be a ceiling, with the
same rate applying to cars, pharmaceuticals and semiconductors. The tariff
treatment for alcoholic beverages has still to be worked out.
Europe would
replace Russian gas with purchases of energy from the U.S. with purchases of
$250 billion per year for the rest of Trump’s term, she added.
Trump also
said that steel and aluminum would continue to be subject to 50 percent
tariffs. Von der Leyen said Washington and Brussels would work together to
create a ring fence to address global overcapacity.
The talks
followed a two-week standoff triggered by Trump, who in a letter to von der
Leyen threatened to jack up tariffs on most EU goods to 30 percent if no deal
were done by Aug. 1.
In a first
sign that a breakthrough had been in the offing, von der Leyen announced Friday
she would fly to meet Trump in Scotland, where the U.S. president was on a
private visit.
Escalate to
de-escalate
Trump’s
escalation had stunned EU trade negotiators, who had been led to believe by
their U.S. interlocutors that a preliminary deal was within reach.
A battle of
nerves ensued, as Trump announced a string of other deals — including one with
Japan that set a baseline tariff of 15 percent while offering relief to its
auto industry. Some observers saw that setting a benchmark.
At the same
time, the 27-nation bloc activated its trade countermeasures, drawing up a list
targeting €93 billion in U.S. goods — ranging from aircraft to autos, and from
soybeans to Kentucky bourbon — that would face retaliatory tariffs of up to 30
percent. Those were due to enter force from Aug. 7 onward, absent a deal.
Von der
Leyen had earlier stressed the significance of the $1.7 trillion transatlantic
trade relationship — the world’s largest — and appealed to Trump to do the
biggest deal that either of them have ever done.
Speaking
afterward, she said: “The two biggest economies should have a good trade flow
between us. I think we hit exactly the point we wanted to find. Rebalance but
enable trade on both sides. Which means good jobs on both sides of the
Atlantic, means prosperity on both sides of the Atlantic and that was important
for us.”
Unity and
friendship
Trump, who
said earlier he was in a bad mood, declared himself satisfied with the outcome.
“It’s going
to bring a lot of unity and friendship. It's going to work out really well,”
Trump said. “This was the biggest of them all.”
Von der
Leyen was joined in Turnberry on Sunday by Trade Commissioner Maroš Šefčovič
while, on the U.S. side, Commerce Secretary Howard Lutnick flew in for the
first top-level bilateral trade talks since Trump imposed sweeping tariffs on
the rest of the world in April.
Lutnick told
reporters that the result of an investigation into the semiconductor industry,
which could lead to new sectoral tariffs being imposed, was expected in around
two weeks.
Agreement
with the EU proved harder for Trump’s team to reach than with Japan and a
handful of other nations — reflecting the bloc’s economic power as a market of
450 million consumers.
The way the
EU handles trade policy — with its executive Commission negotiating on behalf
of, and having to consult with, the bloc’s 27 members — also hampered Trump’s
swashbuckling style of dealmaking that has taken a wrecking ball to the
multilateral trading system of the post-World War II era.
While the EU
never got as far as implementing its retaliatory tariffs, or activating its
“trade bazooka” — the Anti-Coercion Instrument — these exerted a deterrent
effect through their potential economic impact on voters in Republican
heartland states and on U.S. industries with lobbying clout in Washington.
No joint
statement or deal text was immediately published. One person close to the
European negotiating team said it would be vital to stabilize a written
agreement as soon as possible.
The
Commission was expected to brief EU ambassadors on the trade deal in Brussels
on Monday, said a spokesperson for the Danish presidency of the Council of the
EU, the bloc’s intergovernmental branch.
This story
is being updated. Additional reporting by Daniel Desrochers, Doug Palmer,
Jordyn Dahl and Gabriel Gavin.
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