Agreement includes 15% baseline tariff for most EU exports to US after deal reached at Scotland crunch talks<\/p>\n\n\n\n
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 \u2013 half the threatened rate.<\/p>\n\n\n\n
The European Commission chief, Ursula von der Leyen<\/a>, said \u201cwe have a deal\u201d after a 40-minute meeting with Trump at his Turnberry golf resort in Scotland where the US president is on holiday for the weekend.<\/p>\n\n\n\n She described it as \u201ca big deal, a huge deal\u201d that would bring \u201cstability\u201d and \u201cpredictability\u201d to both sides.. \u201cThe two biggest economies should have a good trade flow,\u201d she said.<\/p>\n\n\n\n \u201cIt solves a lot of stuff and was a great decision,\u201d said Trump, describing the agreement, which also involved the EU agreeing to spend tens of billions of dollars more on US energy products, as \u201ca powerful deal\u201d and an \u201cimportant\u201d partnership.<\/p>\n\n\n\n \u201cThis is this is really the biggest trading partnership in the world, so we should give it a shot,\u201d he had said before the private meeting started.<\/p>\n\n\n\n Keeping the EU delegation, who had flown in on Sunday for the meeting, on tenterhooks to the end, the US president had repeated less than an hour earlier that the chances of a deal were only a \u201c50-50\u201d, and that \u201cthree or four sticking points\u201d remained.<\/p>\n\n\n\n Von der Leyen said the meeting was \u201ctough\u201d and \u201cvery difficult\u201d. Referring to a pre-meeting with Trump in front of the cameras, she later told reporters at Glasgow airport: \u201cYou saw the tension at the beginning. So we had to work hard to come to a common position.\u201d<\/p>\n\n\n\n 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 \u2013 a setback for that industry.<\/p>\n\n\n\n There was initial confusion over pharmaceuticals after Trump said the sector would not be included.<\/p>\n\n\n\n Speaking to reporters at Prestwick airport in Glasgow a short time later, von der Leyen said they were included but there were no guarantees of later increases in import duties.<\/p>\n\n\n\n \u201cIt is agreed that we have 15% for pharmaceuticals. Whatever the decisions later on is of the president of the United States: how to deal with pharmaceuticals in general? Globally, that\u2019s on a different sheet of paper,\u201d she said.<\/p>\n\n\n\n She also revealed zero tariffs will apply to a range of other sectors including \u201call aircraft and component parts, certain chemicals, certain generics, semiconductor equipment, certain agricultural products, natural resources and critical raw materials\u201d.<\/p>\n\n\n\n German Chancellor Friedrich Merz welcomed the deal, saying it averted a trade conflict that would have hit Germany\u2019s 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.<\/p>\n\n\n\n Italy\u2019s prime minister, Giorgia Meloni, said it was \u201cpositive\u201d 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 \u20ac40bn.<\/p>\n\n\n\n In a statement, Meloni said the agreement \u201censures stability\u201d.<\/p>\n\n\n\n Under the terms of the deal, Brussels will agree to buy, over three years, $750bn (\u00a3560bn) worth of oil, gas, nuclear fuel and semi-conductors, including liquified gas, while at the same time agreeing to invest $600bn (\u00a3446bn) in the US, a deal that includes purchases of military equipment.<\/p>\n\n\n\n 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.<\/p>\n\n\n\n The deal stabilises the \u20ac1.4tn trade between the EU and the US and avoids a 30% tariff rate Trump threatened to impose on 1 August if talks had collapsed.<\/p>\n\n\n\n Speaking on a plane back to Brussels, the EU trade commissioner, Maro\u0161 \u0160ef\u010dovi\u010d, said Trump was \u201ca very tough negotiator\u201d and the \u201catmosphere was very intense\u201d.<\/p>\n\n\n\n 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\u2019s tariff threat tactics.<\/p>\n\n\n\n \u201cI 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,\u201d said \u0160ef\u010dovi\u010d.<\/p>\n\n\n\n The deal also creates a division on the island of Ireland as traders in Northern Ireland can sell into the US on a 10% tariff rate, setting the scene for difficult diplomatic conversations over guarantees to maintain stability on the entire island in the Good Friday agreement.<\/p>\n\n\n\n Ireland\u2019s deputy prime minister, Simon Harris, said he \u201cregretted\u201d the 15% tariff rate but said \u201ccertainty\u201d was important.<\/p>\n\n\n\n \u201cThere 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,\u201d he said.<\/p>\n\n\n\n There was also confusion over the tariff rate applying to steel. While Trump indicated his punitive 50% rate would continue to apply as part of \u201ca worldwide thing that stays the way it is, von der Leyen told reporters there would be a quota system in place.<\/p>\n\n\n\n The UK steel industry is still faced with 25% tariffs despite Trump\u2019s initial promise they would be brought to zero, with hopes that there could be further concessions when Trump meets Keir Starmer, the British prime minister, in Scotland<\/a> on Monday.<\/p>\n\n\n\n The agreement struck in Scotland is likely to be greeted with relief by financial markets when they open on Monday, after a turbulent few months with jittery investors spooked by the prospect that Trump\u2019s tariff wars could pummel the world economy.<\/p>\n\n\n\n Trump also signalled progress could be made in trade talks with China, with the US president saying \u201cwe\u2019re very close\u201d. Reports by the South China Morning Post on Sunday suggested Washington and Beijing were preparing to announce a 90-day extension to a pause in tariffs to allow for continuing negotiations, before a 12 August deadline.<\/p>\n\n\n\n Markets rallied sharply last week after Trump reached a trade deal<\/a> with Japan<\/a>, the world\u2019s fourth-largest economy, amid investor hopes that the measures announced by Washington in the president\u2019s 2 April \u201cliberation day\u201d plan could be avoided.<\/p>\n\n\n\n Facing von der Leyen in the eponymously named DJT ballroom at his Turnberry golf resort, Trump said he was \u201cvery honoured\u201d to have done the deal, telling the European Commission president her staff had been \u201cfantastic\u201d.<\/p>\n\n\n\n The two sides shook hands and congratulated each other in front of a bilateral delegation that included the US commerce secretary, Howard Lutnick, and the trade representative, Jamieson Greer.<\/p>\n\n\n\n Looking relieved and flanking von der Leyen were \u0160ef\u010dovi\u010d; Bj\u00f6rn Seibert, her head of cabinet; Sabine Weyand, a key player in the Brexit negotiations and now the director general of the EU\u2019s trade commission; and Tomas Baert, a member of von der Leyen\u2019s cabinet who has taken a lead role in talks.<\/p>\n\n\n\n