After months of escalating tensions, the European Union (EU) and the US have reached a landmark trade deal that would help prevent a worrying tanal transatlantic tariff war. Accordingly, the basic tax rate of 15% will apply to most of the EU's exports to the US.
The deal was finalized on July 27 during a 40-minute closed-door meeting between US President Donald Trump and European Commission President Ursula von der Leyen at Trump's turnberry Golf Resort in Scotland. Both leaders hailed it as a stable turning point and the biggest deal ever.
We have an agreement. It brings stability and predicts the future, von der Leyen told reporters.
Meanwhile, Mr. Trump did not hide his confidence: "This is the biggest deal of all. It solves a lot of problems. A great decision.
Under the deal, all EU goods exported to the US - including cars, pharmaceuticals and semiconductors - will be subject to a unified tax rate of 15%. Previously, these items faced the risk of being taxed up to 30%, even 50% if negotiations broke down. In particular, cars manufactured in Europe have been threatened with a 25% tax.
Ms. von der Leyen confirmed that the 15% tax rate is "comprehensive", applied to all items. However, Mr. Trump left open the possibility of "separate consideration" for pharmaceuticals. We have to produce medicine in the US. We cannot rely on foreign supplies, Trump said.
In addition to accepting the new tax rate, the EU is also committed to purchasing up to 750 billion USD of energy goods from the US and investing an additional 600 billion USD in the US economy. Mr. Trump said that Europe will also buy "hundreds of billions of dollars in military equipment" from the US, although he has not revealed a specific schedule.
The deal was signed in the context that both sides were preparing to retaliate if negotiations failed. The EU has previously said it is ready to impose a 30% tariff on $100 billion worth of US goods. In Ireland, Deputy Prime Minister Simon Harris admitted that Dublin regrets the 15% rate, but stressed that certainty is necessary.
Right before the meeting, Mr. Trump told the press: "This is the world's largest trade relationship. We should try it once.
The deal is assessed by Western financial media outlets to help reassure the market sentiment that is tense like a whole. stocks of European heavy industry and exporters are expected to fluctuate strongly next week.
