On Sunday, the US and EU reached a trade agreement that imposes a 15% tax on the majority of goods. This prevents, for the time being at least, much increased imports from both sides, which might have caused economic shockwaves worldwide.
Following a short meeting at Trump’s Scottish golf resort Turnberry, President Trump and Chief of the European Commission Ursula von der Leyen made the far-reaching declaration. Their one-on-one meeting was the last straw in months of negotiations, as the White House was about to impose harsh tariffs on the 27 member states of the European Union (EU) on Friday.
The negotiating process was fascinating. It will be beneficial for all sides, in my opinion,” Trump stated. He characterized the accord as “a good deal with lots of countries” and “a good deal for everybody.”
“Will bring stability, it will bring predictability, that’s very important for our businesses on both sides of the Atlantic,” von der Leyen said of the arrangement.
More effort is needed in several areas.
Some important elements are still missing from this tariff agreement, as they are from Trump’s previous announcements with nations like Japan and the UK.
In addition to a large purchase of military equipment, Trump said that the European Union had committed to purchase energy from the United States for over $750 billion and spend an additional $600 billion in the country. He said that the United States will impose a 15% tax on all goods, including vehicles, and that American exporters would “have the opening up of all of the European countries.”
“Indeed, basically, the European market is open,” von der Leyen added, adding that the 15% tariffs were “across the board, all inclusive.”
She clarified at a separate press conference away from Turnberry that the additional $750 billion in U.S. energy purchases would really be spread out over the next three years, and that this would help reduce the bloc’s reliance on Russian natural gas.
This deal “stabilized on a single, 15% tariff rate for the vast majority of EU exports”—including automobiles, semiconductors, and pharmaceuticals—and “when the European union and the United States work together as partners, the benefits are tangible,” as Von der Leyen put it.
She firmly stated that 15% is the limit.
While this rate would apply to most goods, von der Leyen made it clear that it wouldn’t be uniform and that the two sides had agreed on “zero for zero tariffs on a number of strategic products,” including all aircraft and component parts, specific chemicals, generic drugs, semiconductor equipment, agricultural products, critical raw materials, and some agricultural products.
Whether or not alcoholic beverages will be on that list is uncertain.
She also emphasized that the “framework” refers to the statistics that were just revealed to the public, but that specifics still needed to be ironed out. “And we will keep working to add more products to this list,” she added. And that’s going to take place in the next weeks.
Need further EU permission
While that is happening, other fronts will also require attention. Since the European Commission is responsible for member states’ commerce, von der Leyen was authorized to negotiate on their behalf. The deal’s fate rests in the hands of EU legislators and member states, who the Commission must now apprise of it.
“A very one-sided transaction, very unfair to the United States.” Trump had already promised to alter what he had called before their meeting had started.
According to the Republican president, “I think both sides want to see fairness.” She was speaking to reporters.
Trump is “known as a tough negotiator and dealmaker,” according to von der Leyen, and the United States and the European Union together have the greatest trade volume in the world, including hundreds of millions of people and trillions of euros.
“Albeit fair,” Trump concluded.
Trump has spent months threatening countries across the globe with steep tariffs in an effort to reduce the massive trade deficits that the United States has with many important trading partners. His most recent comments implied that any agreement with the EU would need to “buy down” a tariff rate of 30% that was about to be implemented.
However, the president was asked during his remarks before to the announcement if he would be open to tariff rates below 15%, and he responded with a resounding “no.”
Getting down to business
The president met with the group after playing golf at Turnberry for the second day in a row, this time accompanied by his sons Eric and Donald Jr. Golf and the promotion of properties carrying his name are the mainstays of Trump’s five-day trip to Scotland, which also includes deal-making.
On Monday, British Prime Minister Keir Starmer will meet with Trump at Turnberry, but a tiny group of protesters at the course waved American flags and held a placard condemning Starmer.
Around him, people were yelling “Trump! Trump!” and celebrating.
The president will visit his family’s other golf property in Aberdeen, northern Scotland, on Tuesday. Next month, they will establish a third course in the area. The president’s sons and himself will be present for the new course’s ribbon-cutting ceremony.
Prior to Trump’s threat of the 30% tariff rate, the United States and the European Union appeared to be nearing an agreement earlier this month. After a few back-and-forths, the Trump administration has settled on Friday as the new, definitive date to begin applying tariffs.
“There will be no further extensions or grace periods. United States Commerce Secretary Howard Lutnick stated on “Fox News Sunday” prior to the announcement of the EU accord that the tariffs will be imposed and implemented on August 1. Customs will then begin collecting the associated fees, and then the process will begin. But he did say that “people can still talk to President Trump” after that. You can always count on him to listen.
The European Union has threatened to impose tariffs on a wide variety of American goods in the absence of a deal, including beer, car parts, meat, and Boeing airplanes, among hundreds of other items.
Meanwhile, tariffs threatened by Trump on Europe may have increased the prices of several European commodities in the US, including cheese from France, leather from Italy, electronics from Germany, and medicines from Spain.
Trump stated, “I think it’s great that we made a deal today, instead of playing games and maybe not making a deal at all.” In my opinion, it’s the largest transaction in history.