US-EU Trade Deal: Is It A Benchmark Ahead Of US-China Negotiations?

US and EU has recently announced $1.35 trillion trade framework. This trade negotiation may shift the global trade prospective, just days before the August deadline for US-China trade talks.

The US-EU trade agreement include, Europe will purchase a $750 billion of American energy along with $600 billion of investment in the United States by 2028. This deal also removes EU tariffs on US industrial goods and addresses non-tariff barriers. It leads to a support America’s small- and medium-sized exporters.

However, in return, the European Union will pay a standard 15% tariff on imports to the US, including pharmaceuticals, autos, and semiconductors.

This inclusive market access with the European Union challenges Beijing, which remains below a 50% US tariff on many segments. Though China had previously protected its partial treaty with the US. The US now enters talks with a tougher negotiating pointer.

The reciprocal trade deal with Europe, integrated with restrictive third country benefit, also highlights Washington’s committed to avoid indirect trade benefits to non-aligned partners of EU, this includes China.

This agreement initiates strict rules of origin, eliminates trade barriers, and stresses on economic security through resilient supply chains. These attributes may serve as a prototype in upcoming negotiations with China, where there is a similar concern over investment barriers, trade imbalances, and intellectual property remain unresolved.

With both sides, United States and European Union, publicly stating they are “close to a deal,” the US-EU agreement could impact China’s next step. It will set new standards for trade agreements involving the US moving forward.

Why the US-EU Deal Was in Focus: What’s In It?

The US-EU Trade Negotiations, declared on July 28, 2025, is a historic arrangement between the United States and the European Union. The objective of this trade talks is to recalibrate the economic relationship between the two largest economies of the world.

This trade deal is intended to increase investment to America and enhance American manufacturing and exports, providing extraordinary access to the European market. Here’s a breakdown:

•    Investment and Energy: The European Union will invest $600 billion in the United States and purchase the US energy cost around $750 billion by 2028.
•    Tariffs and Trade: The EU will eliminate all tariffs on US industrial goods and lower trade barriers for agriculture and digital goods.
•    Economic Security: Both EU and US will collaborate on supply chain resilience, addressing non-market policies, and encouraging innovation.
•    Strategic Commitments: This deal will strengthen the position of US as a leader in energy and advanced manufacturing while fostering fair trade practices.

Also Read: European Union Steps Up Global Coordination Amid Threat Of 30% US Tariffs, Eyes Strategic Trade Alliances