President Donald Trump shakes hands with European Commission President Ursula von der Leyen in Turnberry, Scotland, on July 27.
Photo: Getty Images
Facing von der Leyen in the eponymously named DJT ballroom at his Turnberry golf resort, Trump said he was “very honoured” to have done the deal, telling the European Commission president her staff had been “fantastic”.
President Donald Trump claimed another win for his campaign to transform the global economy and American life, CNN writes. The United States clinched a framework deal with the European Union on Sunday that averted a damaging trade war. Trump believes such moves will revive US manufacturing. But the resulting 15% tariff on EU goods entering the US likely means American consumers will face higher prices in the long term.
Before Trump returned to office, the U.S. and the EU maintained generally low tariff levels in what is the largest bilateral trading relationship in the world, with around 1.7 trillion euros ($2 trillion) in annual trade, ‘The Washington Post’ notes.
Together the U.S. and the EU have 44% of the global economy. The U.S. rate averaged 1.47% for European goods, while the EU has averaged 1.35% for American products, according to the Bruegel think tank in Brussels.
The headline figure is a 15% tariff rate on about 70% of European goods brought into the U.S., including cars, computer chips and pharmaceuticals. It’s lower than the 20% that Trump initially proposed, and lower than his threats of 50% and then 30%.
Under the terms of the deal, Brussels will agree to buy, over three years, $750bn (£560bn) worth of oil, gas, nuclear fuel and semi-conductors, including liquified gas, while at the same time agreeing to invest $600bn (£446bn) in the US, a deal that includes purchases of military equipment.
This came on a typically frenetic weekend that Trump spent in Scotland and that served as a metaphor for his turbulent influence on America and the globe.
He juggled the highest-level diplomacy — talks with the EU’s top official, Ursula von der Leyen — with a trip promoting his business empire, in this case his portfolio of exclusive Scottish golf clubs.
Much is unknown about the scope of the trade deal with the EU, which will see a 15% tariff imposed on most of the bloc’s exports and billions of dollars in purchases of US energy.
But it extends a winning streak and a record of implementing campaign promises for a president who is imposing personal power and often idiosyncratic beliefs — for instance in the effectiveness of trade tariffs — on the US and the world.
“This was the big one. This is the biggest of them all,” Trump said Sunday after meeting von der Leyen, the president of the European Commission.
There’s also an important geopolitical aspect to the EU trade deal. The Europeans committed to buying $880 billion of energy from the US. This could make America’s NATO allies less vulnerable to pressure from Russia at a time when the Western alliance is opposing Moscow’s invasion of Ukraine.
“We still have too much Russian LNG (liquid natural gas) that is coming through the back door again to our European Union, and some Russian gas and oil still in the European Union, which we do not want anymore,” von der Leyen said.
Donald Trump has announced a deal with the EU to end four months of difficult negotiations between Washington and Brussels and avert a damaging transatlantic trade war, imposing a 15% import tariff on most EU goods – half the threatened rate, ‘The Guardian’ adds.
Under the agreement, the US will levy a 15% baseline tariff for most EU exports to the US, limiting a higher tariff. However, the rate is higher than before Trump came to power, and a 50% tariff remains on steel exports – a setback for that industry.
However, Trump retains the ability to increase the tariffs in the future if European countries do not live up to their investment commitments, a senior US administration official told reporters on Sunday evening.
The deal stabilises the €1.4tn trade between the EU and the US and avoids a 30% tariff rate Trump threatened to impose on 1 August if talks had collapsed.
Speaking on a plane back to Brussels, the EU trade commissioner, Maroš Šefčovič, said Trump was “a very tough negotiator” and the “atmosphere was very intense”.
He conceded that 15% was a worse position for the EU than before Trump, when tariff rates were at an average of 4.8% marking a significant victory for Trump’s tariff threat tactics.
“I think that what was most important for us was to make sure we would have this predictability and we would have stability for our businesses,” said Šefčovič.
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.
Italy’s prime minister, Giorgia Meloni, said it was “positive” that a trade deal had been reached but added that she needed to see the details. Italy is one of the biggest European exporters to the US, with a trade surplus of more than €40bn.
In a statement, Meloni said the agreement “ensures stability”.
Ireland’s deputy prime minister, Simon Harris, said he “regretted” the 15% tariff rate but said “certainty” was important.
“There is still a lot of detail on the agreement which will need to be brought forward including in relation to pharma, aviation and other sectors. Over the coming days, we will be examining what has been agreed and the full implications for Irish business and the economy, including any implications for the All-Island economy,” he said.
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