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The US and EU have reached a trade deal ahead of President Trump’s 1 August cutoff date, when the US is scheduled to raise tariffs on countries that have failed to negotiate new terms.
“We have good news. We have a deal,” President Trump announced on Sunday, sitting next to European Commission President Ursula von der Leyen in Scotland.
As part of the deal, the EU will buy $750 billion worth of energy from the US, and tariffs of 15% will be imposed on a wide range of European goods entering the US, including cars.
The EU will also make fresh investments in the US of $600 billion and make additional purchases of US military equipment.
President Trump had threatened to impose across-the-board tariffs of 50% on European goods, later reduced to 30%, if the EU did not agree new terms with the US before 1 August.
Trump said both sides “wanted to make a deal.”
“This started months ago, this negotiation, so we knew what we were getting into,” Trump said. He added that the agreement was “satisfactory” for both sides.
“All of the countries will be opened up to trade with the United States at zero tariff,” Trump continued.
“And they’re agreeing to purchase a vast amount of military equipment. We don’t know what that number is, but the good news is we make the best military equipment in the world, so [you’ve] sort of got to do that, until somebody tops us, which is not going to happen.”
Commerce Secretary Howard Lutnick said the US will give an update on its plans for microchip tariffs within two weeks, and suggested the tariffs were a key reason the EU wanted to negotiate with the US.
“I’ll let you wait for the two weeks until you get to announce your plan,” Lutnick said to Trump.
“But we are going to be bringing chip manufacturing back to the United States.”
In recent weeks, the US has agreed preliminary trade deals with Japan, China, Indonesia, the Philippines and the UK.
