The U.S. has struck a framework trade agreement with the European Union, imposing a 15% import tariff on most EU goods, half the threatened rate. This move aims to avoid a bigger trade war between the two allies, which account for almost a third of global trade. 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. The deal mirrors key parts of the framework accord reached by the U.S. with Japan, but leaves many questions open, including tariff rates on spirits.
The deal calls for $750 billion of EU purchases of U.S. energy in coming years and “hundreds of billions of dollars” of arms purchases. It likely spells good news for a host of EU companies, including Airbus, Mercedes-Benz, and Novo Nordisk, if all the details hold. 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.
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. Trump retains the ability to increase the tariffs in the future if European countries do not live up to their investment commitments.
