US and EU Strike Last-Minute Trade Deal, Averting Major Tariff Showdown

 The US and European Union finalised a last-minute trade deal Sunday, heading off a potential transatlantic trade war, Reuters reported. The announcement followed face-to-face talks between President Donald Trump and European Commission President Ursula von der Leyen at Trump’s Turnberry golf resort in Scotland.

“It was a very interesting negotiation. I think it’s going to be great for both parties,” Trump said after the meeting, which capped days of rising tensions and threats of steep US tariffs.

What’s in the new US-EU Trade Agreement?

The framework deal reportedly includes a 15% tariff on European goods entering the US – lower than the threatened 30% tariff rate – and a commitment from the bloc to significantly increase purchases of American energy and military equipment.

While the outcome of the talks is being viewed by some in Europe as less than ideal, the latest deal avoids an immediate escalation of trade war. The EU had hoped for a “zero-for-zero” tariff structure but officials nonetheless welcomed clarity over the deal’s terms.

Pressure, Deadlines and Threats

Trump has long rallied against the US trade deficit with the EU, which reportedly reached $235 billion in 2024. While the European bloc argues that an American surplus in services offsets the imbalance, Trump asserted that he would not go below a 15% import tax.

“This is bigger than any other deal,” Trump said, according to The Associated Press. “I think both sides want to see fairness.”

The Sunday talks were shaped by a looming August 1 deadline, the date when new US tariffs were set to kick in. “No extensions, no more grace periods,” Commerce Secretary Howard Lutnick had said on Fox News Sunday. “August 1, the tariffs are set.”

ALSO READ: Over 3,200 Boeing Workers in St. Louis Reject Contract, Strike Likely by 4 August

EU’s Urgent Push and High Stakes

Von der Leyen flew to Scotland along with EU chief negotiator Maros Sefcovic and others, determined to strike a deal before the deadline. She had called the meeting with Trump “an honour,” adding that if successful, “it would be the biggest deal each of us has ever struck.”

Noting the scale of the US-EU trade, she described it as the “largest in the world” in terms of volume.

Trump, while playing golf earlier in the day with sons Eric and Don Jr., had stressed that the main issue was fairness. “We have had a hard time with trade with Europe, a very hard time,” he said, per AP.

US & EU Avoiding a Trade War, for Now

Without a deal, the EU had threatened to retaliate with tariffs on hundreds of American goods, from beef and beer to Boeing aircraft. Trump had insisted any agreement would have to “buy down” from the 30% tariffs rate.

“People can still talk to President Trump. He is always willing to listen,” The Associated Press quoted Lutnick as saying.

For now, French cheese, Italian handbags, and German cars won’t see a dramatic price hike in US markets.

ALSO READ: Qatar’s Boeing Jet to US Is ‘Unconditional’ Gift, May Become New Air Force One