Ursula von der Leyen, the head of the European Union, and US President Donald Trump announced on Sunday that they had reached an agreement to resolve a transatlantic tariff dispute and prevent a full-scale trade war.
The accord was made as the European Union faced a deadline of August 1 to reach an agreement with Washington or risk a 30 percent US charge. “We have reached a deal. After a high-stakes meeting with von der Leyen at his golf property in Turnberry, Scotland, Trump told reporters, “It’s a good deal for everybody.”
Trump informed reporters that the agreement included a baseline tax of 15 percent on EU exports to the US, which is the same amount that Japan was able to achieve. This tax would also apply to the bloc’s vital car industry, which is already subject to a 25 percent tariff. “We are agreeing that the tariff straight across, for automobiles and everything else, will be a straight-across tariff of 15 percent,” Trump stated.
He added that the bloc has decided to invest an additional $600 billion in the United States and buy “$750 billion worth of energy” from the US. Von der Leyen’s European Commission has been working hard to preserve a trade partnership worth $1.9 trillion in goods and services annually while negotiating on behalf of the EU’s 27 member states.
After their hour-long conversation, the EU head sat next to Trump and told reporters, “It’s a good deal.” “It will bring stability. It will bring predictability. That’s very important for our businesses on both sides of the Atlantic,” she stated.
Since Trump took over the White House, the EU has been subject to many rounds of tariffs. Currently, it faces a 25 percent vehicle tax, a 50 percent steel and aluminum tax, and a 10 percent general tariff, which Washington has threatened to raise to 30 percent in the event of a no-deal.
EU states had approved counter tariffs on $109 billion (93 billion euros) worth of US goods, including cars and airplanes, to go into effect gradually starting on August 7 if the negotiations had failed.
Additionally, Brussels was compiling a list of US services that it may attack. Furthermore, nations like France assert that Brussels should not be scared to use a so-called trade “bazooka”; EU laws intended to combat coercion, which may include limiting access to its public contracts and market.
Trump has started a campaign to change how the United States trades with other nations, and he has threatened to impose punishing tariffs on dozens of them if they do not come to an agreement with Washington by August 1.
On Sunday, US Commerce Secretary Howard Lutnick declared that there would be “no extensions, no more grace periods” and that the August 1 deadline was set in stone.
