World

US-EU framework tariff deal reached just ahead of deadline

Jul 28, 2025 United States

The US will impose a 15% tariff on most EU imports, half the rate initially threatened. The deal includes 600 billion USD of EU investment in the US and 750 billion USD of EU purchases of American energy and defence products

After months of negotiations, US President Donald Trump and European Commission President Ursula von der Leyen announced a framework trade agreement on Sunday at Trump’s luxury golf course in western Scotland, ahead of the 1^stof August deadline.

“I think this is the biggest deal ever made”, Trump told reporters, praising the EU’s plans to invest around 600 billion US dollars in the United States and dramatically increase its purchases of US energy and military equipment.

Von der Leyen later told reporters that this deal it was “the best we could get”, suggesting that reducing the originally intended tariff from 30% to 15% was the only real concession made by the US. The deal does not cover European pharmaceutical products, and tariffs on steel and aluminium will remain at 50%. Goods imported from the US into the European bloc will also be exempt from tariffs.

“We have a trade deal between the two largest economies in the world, and it’s a big deal. It's a huge deal. It will bring stability. It will bring predictability”, she said.

Nevertheless, many in Europe will still see the baseline 15% tariff as too high compared with the initial hope of securing a zero-for-zero tariff deal.

Taken together, the EU is America’s biggest trading partner, with total trade reaching 1.97 trillion US dollars last year. However, the US recorded a goods trade deficit of 235 billion US dollars.

Image Credits: nytimes.com

European Union United States Economy Tariffs Trade Trump tariffs